Tuesday, June 27, 2006


Republicans: Selling America Out To the Mega-Rich.

Survival of the Richest
The real "Two Americas" are not the poor and everyone else, but the mega-rich and everyone else.

By Robert Kuttner

Former senator John Edwards gave a terrific speech to the National Press Club Thursday, one that felt like eloquence from another age. His theme: America should end poverty in three decades, mainly by rewarding work and promoting opportunity.

"Poverty is the great moral issue of our time," Edwards declared. This speech was his de facto kickoff for a run at the 2008 Democratic presidential nomination.

Unlike most of the undeclared Democratic field, Edwards is not putting his finger to the prevailing wind. He's trying to change it. After his 2004 vice-presidential run, Edwards admirably went home to the University of North Carolina to head its Center on Poverty, Work, and Opportunity.

Though the speech was long-scheduled, Edwards' timing was unerring. On Wednesday, Senator Edward Kennedy's bill to raise the federal minimum wage from its paltry $5.15 an hour to $7.25 won the votes of 52 senators, a majority, including eight Republicans. But the Republican leadership blocked it with a filibuster.

Meanwhile, as if to underscore just whose interests they serve, the Republican majority in the House pushed through a bill to repeal the estate tax, except for the mega-rich. Only estates of over $5 million ($10 million for couples) would pay any tax; most of them would pay just 15 percent.

The Senate takes up repeal next week. Last week, Senate sponsors fell three votes short. So the Republican leadership has added a billion-dollar bribe in tax cuts to the timber industry, hoping to lure two wavering Democrats from Washington State, Maria Cantwell and Patty Murray.

The minimum wage increase would raise incomes for some 7.3 million Americans directly; as wages at the bottom rose, another 8.2 million would likely get modest raises, too. Counting workers' families, at least 30 million Americans would gain improved living standards.

By contrast, estate tax repeal would reward a few thousand mega-rich. However, wealth has become so highly concentrated that the cost would be $760 billion over a decade. Keeping the estate tax as it was before the Bush cuts would affect only the top 2 percent, and the revenue could pay for much of Edwards' program to reward work.

But if the right's legislation passes, $760 billion more of deficits will intensify pressure to repeal what's left of federal outlays on health insurance, aid to education, child care, home-ownership -- all the supports that help working people get out of poverty and help anchor the middle class.

This brings me back to Edwards' bravely unfashionable speech. Today there are 37 million poor people in America -- out of just under 300 million. Back when Franklin Roosevelt delivered his famous second inaugural address in 1937, declaring "I see one-third of a nation ill-housed, ill-clad, ill-nourished," a third of Americans were indeed poor, and another third had good reason to fear poverty. The vulnerability of the non-poor was a major issue that FDR brilliantly energized.

Today, with only 12 percent of Americans officially poor, the challenge of leadership is more complex. Yet four Americans in five have had basically stagnant living standards since the mid-1970s. That's because three decades of economic growth have gone almost entirely to the top, not merely the top 20 percent but mainly the top 1 percent.

Estate tax repeal is just part of the story. Executive pay, relative to typical worker pay, has risen tenfold in two decades.

The right has managed to savage the institutions that produced increasing opportunity and a broader middle class in the decades after World War II -- minimum wages, trade unionism, job-security, decent health and retirement plans, affordable college and housing, Social Security that rose with inflation, and economic regulation to keep Wall Street from grabbing most of the winnings.

The middle class hasn't been so insecure since the depression. But today, unlike 1937, this epic reversal is off the political radar screen. The insecurity is experienced privately rather than as a national issue.

It's courageous of Edwards to tackle poverty. But if he wants to become a presidential contender by re-introducing unspoken realities of class to American political discourse, there is a far larger class of people taking an economic bath. It's four Americans out of five. The real "Two Americas" are not the poor and everyone else, but the mega-rich and everyone else.

If we want to help the poor, prevent giveaways to the elite, and anchor a secure middle -- let's get the working middle class and the working poor back in the same broad coalition. I look forward to Edwards' next speech on that.

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