After ceding the policy debate to the left for months, Democratic centrists have begun to fight back with new proposals and a stark warning: The latest wave of far-left ideas, though popular with many in the Democratic Party, could lead to electoral disaster in 2020.
Environmentalists are drafting alternatives to the Green New Deal. Candidates who have endorsed Medicare-for-all are open to backing more incremental plans. And the economic strategist who helped steer the last two Democratic presidents is warning that liberal tax proposals could backfire.
The moderate pushback has been accelerated by the growing voices of a more centrist class of Democratic presidential contenders that includes former Colorado governor John Hickenlooper, Sen. Amy Klobuchar (Minn.) and former Texas congressman Beto O’Rourke, as well as expected announcements from former vice president Joe Biden and Sen. Michael F. Bennet (Colo.).
All have promised campaigns that will appeal to liberals without dramatically expanding the federal role in the economy.
Instead of the government health care for all proposed by Sen. Bernie Sanders (I-Vt.), they are pushing public options or marginal Medicare expansions. Instead of colossal government spending to solve climate change, they are offering market-based solutions. Instead of heavy taxes on the ultrarich, they are focused on closing loopholes and expanding tax breaks for the middle class.
“With the emergence of far more inequality, there is a quite deep sense of dissatisfaction that leads one to be willing to entertain bigger ideas than one might have a generation ago,” said Larry Summers, who served as treasury secretary under President Bill Clinton and a top economic adviser in the Obama administration. “That said, not all big ideas are good ideas.”
Moderate voices were sidelined in the first months of the 2020 campaign by a group of charismatic liberals who have found traction — as measured by polling, small-dollar fundraising and social media attention — with policy ideas far more disruptive than anything ever embraced by former president Barack Obama, the party’s longtime standard-bearer. (Sanders, a democratic socialist, has emerged as the campaign’s top fundraiser and ranks higher than anyone else in the race in early polls.)
These ideas include several proposals for guaranteed government incomes, an echo of plans embraced by party leaders in the early 1970s; programs for the government to fund higher education, manufacture prescription drugs and take over health-care coverage; and several plans to dramatically increase taxes on the richest Americans, by returning to a 70 percent income-tax rate for the highest earners and imposing a tax on the net worth of wealthy households.
Traditional Democratic donors and activists watched with concern as these plans started to reshape the public face of the Democratic Party just months after the 2018 midterms, in which Democrats successfully won back the House with a relatively centrist message aimed largely at suburban voters by focusing on fighting corruption in Washington and Trump’s efforts to repeal the Affordable Care Act.
“There was a clear story coming out of the midterms, and it is like it never happened,” said Jane Hartley, a former U.S. ambassador to France who helped raise millions from wealthy New York donors to support 31 Democratic House candidates in the midterms. “We have to look at how we won. The Democrats have to put together a coalition, and it’s a coalition that includes suburban voters.”
Trump and his strategists have signaled that they intend to capitalize on what they consider the socialist underpinnings of the Democratic Party’s new policy ideas in the president’s reelection efforts, ideally to sway moderate Midwestern voters .
“If they beat me with the Green New Deal, I deserve to lose,” President Trump said at a recent fundraiser for the National Republican Congressional Committee. “What they want to do to the country would be horrible. We have to win.”
Biden’s probable entrance into the race could offer the strongest counterweight to the liberal energy. He has been meeting with advisers and has started to sketch out some of the proposals that would guide his campaign, policies that would build upon those he has been working on since leaving office.
Biden has raised alarms about the debt and the deficit and said he would support changes to Social Security and Medicare — topics none of the other candidates have raised with any vigor. He has also spoken against some of the language that pillories the wealthiest Americans.
“I love Bernie, but I’m not Bernie Sanders,” Biden said last year during an address at the Brookings Institution, where he made a point to praise the ultrawealthy as “patriotic.” “I don’t think 500 billionaires are the reason we’re in trouble.”
Biden has talked about income inequality and the large gap between the rich and the poor that is “having the effect of pulling us apart.” His advisers cast as unrealistic plans such as those proposed by presidential candidate Sen. Elizabeth Warren (D-Mass.).
Biden is likely to propose eliminating a tax provision often referred to as “stepped-up basis,” which adjusts the value of inherited assets in a way that allows heirs to avoid paying taxes on any appreciation in value that asset accrued during the decedent’s lifetime. The proposal is not as far-reaching as Warren’s and is likely to bring in less additional tax revenue.
Biden, while speaking with reporters last week, said the party has not moved as far left as many may assume and pointed to results from the midterm election.
“Show me the really left-left-left-left-wingers who beat a Republican,” he said. “The fact of the matter is the vast majority of the members of the Democratic Party are still basically liberal-moderate Democrats in the traditional sense.”
Biden called the debate over ideology “not a bad thing.”
“But the idea that all of a sudden the Democratic Party woke up and — and, you know, everybody asks what kind of Democrat? I’m an Obama-Biden Democrat, man. And I’m proud of it.”
O’Rourke, who supported replacing private health insurance with government insurance in 2017, is pushing for a more moderate Medicare for America proposal, which would expand government-run insurance to include those in the Affordable Care Act’s individual market while allowing those who want to keep private insurance to do so.
“I think that’s one of the ways to ensure that we get to guaranteed, high-quality health care for every single American,” O’Rourke said during a campaign stop in Washington, Iowa, when asked about Medicare-for-all. “I’m no longer sure that that’s the fastest way to get there.”
One voter pushed him during a recent town hall meeting in Independence, Iowa, saying he seemed to be defending greedy insurance companies.
“I have to be respectful to people who just shared with me what I shared with you: They like the program they’re in, they like the insurance that they have,” O’Rourke said. “If we become too ideological or too prescribed in the solution, we may allow the perfect to become the enemy of the good.”
Another proposal was reintroduced last week by Bennet and Sen. Tim Kaine (D-Va.), the party’s 2016 vice presidential nominees. Called Medicare X, the plan would allow the government to negotiate Medicare drug prices and introduce a public insurance option for people without employer coverage, with increased subsidies to reduce out-of-pocket costs for many middle- and lower-income households.
Bennet, who was recently diagnosed with prostate cancer and continues to move toward a presidential announcement, has highlighted his concerns with the Medicare-for-all plan drafted by Sanders.
“That would take insurance away from 180 million people who get it through their employer, 80 percent of whom like it. It would take insurance away from every labor union in America that has negotiated a health-care plan, and it would cost $30 trillion,” Bennet said in a recent appearance on MSNBC.
House Speaker Nancy Pelosi (Calif.) has also argued against Medicare-for-all, saying it may be too expensive. She has pushed instead for Congress to make improvements to the Affordable Care Act.
Presidential contenders who have backed Medicare-for-all, including Sen. Kamala D. Harris (Calif.) and Warren, describe the plan as a goal, while saying there are other, more incremental policies they support. Sen. Cory Booker (D-N.J.), another backer of Medicare-for-all, has said he wants to maintain a role for private health insurance.
Centrist moves against the Green New Deal, the Democrats’ sweeping climate-change measure, are meant to compete with its domination of the party’s discussion over global warming. Former New York mayor Michael Bloomberg, who decided against a presidential run, plans to release an alternative to the Green New Deal, the House resolution that calls for upgrading “all existing buildings in the United States” and significant federal spending to guarantee all Americans a good-paying job with paid vacation, health-care coverage and retirement security.
Carl Pope, a former executive director of the Sierra Club who has been working with Bloomberg’s aides on the plan, said it will focus on what states, cities and the private sector can do before the 2020 election.
“They are focusing on the end game, and we are focusing on here is where we need to start out,” Pope said of the Green New Deal proposed by Rep. Alexandria Ocasio-Cortez (D-N.Y.). “We have a bunch of stuff to propose that will not be seen as expensive because it will be profitable.”
Hickenlooper has described a more collaborative and bipartisan path to fighting climate change, based on his experience in Colorado.
“We got the oil and gas industry to sit down with the environmental community,” he said. “We created the first methane regulations in the country that the oil and gas industry paid $60 million per year. It’s the equivalent of taking 320,000 cars a year off the road.”
Summers, Obama’s former economic adviser, has opened another front, writing papers attacking the economic policies of the left. In a March article in The Washington Post, he argued that the idea that central banks can print money to finance extensive federal programs — which has been entertained by Sanders and Ocasio-Cortez — as a “grotesque” effort that “defy the laws of arithmetic.”
More recently, he has argued that increasing the tax burden on the wealthy is a worthy goal but that high marginal rates and a wealth tax are the wrong approach. He argues that for every dollar raised by the Ocasio-Cortez and Warren proposals, the cost to the broader economy is likely to be $2 or more.
“We should collect substantially more taxes from those at the very top of the income distribution, but that can be done much more effectively and fairly by broadening the tax base by closing tax shelters than by 70 percent rates or new wealth taxes,” he said.
Warren points to significant support in public polls for her proposal to impose an annual 2 percent tax on the assets of households worth more than $50 million.
“This isn’t about left vs. right,” Warren told The Washington Post. “The wealthy have rigged the system in their favor for too long and the American people know we need real solutions that match the size of the problems we face.”
To this, Summers has a historical rejoinder. The party, he warns, has been down a similar road in the past, with painful results.
“There is a bit in the air that is worryingly reminiscent of 1972, when Democrats were rightly enraged with a corrupt and malign president, were disillusioned by their previous unsuccessful establishment presidential candidate, gravitated to radical redistribution economic policy, focused on turning out their activists and failed to focus on the middle,” Summers said. “The result was the political catastrophe of Richard Nixon’s reelection.”