Third Way’s Struggle for the Soul of the Democratic Party – a Response

by

Haters of the center-left think tank Third Way will no doubt pounce on a piece recently published by the Boston Globe’s Noah Bierman purporting to show how the organization’s policy positions are masterminded by various scions of Wall Street.

As “evidence” of this influence, the piece cites a Third Way report published in 2007, “New Rules for the Economy: A framework for the 21st Century.” that lists several of Third Way’s trustees among the co-authors and commentators.

As the lead author of this report (I was Third Way’s Economic Program Director at the time), I feel compelled to clarify how Bierman characterized this report in his piece – and sorry to say, it will take some wind out of the sails of his thesis.

First, this report was published in 2007.

While Bierman does point this out in passing, the political and economic context in which this report was released was very different from what it is today. This was before the financial crisis but also just after the 2006 elections, when Democrats had captured both chambers of Congress.

First and foremost, the goal of this report was to offer up a positive and broadly appealing policy agenda for Democrats to consider as they thought about how to exercise – and maintain – their new majorities.

Bierman chooses to focus on the first section – which lays out the political advantages of a message focused on aspiration and opportunity over a message focused on pessimism and decline (what we called “populism” at the time) – but he neglects to mention that the report also goes after the myths of conservatism, including and especially their sustained attack on government.

The Globe piece also neglects to mention the actual substance of the report itself, which includes an agenda that almost every mainstream progressive organization would agree with today. Here are the policy goals included in the report, which are quoted below verbatim from its various subsections (and I’ll point out again that we proposed these in 2007, before many of these priorities became part and parcel of Democratic orthodoxy):

• Address college affordability through tax deductions and credits aimed at middle class families.
• Determine causes of and propose solutions for lowering college drop-out rates.
• Continue to reform public K-12 education, and make college preparation the goal of every high school.
• Address the barriers to college, such as teen pregnancy, that lead teens to make short-term choices.
• Make college graduation a universal aspiration for all families, and encourage parents of school age children to make the home a learning environment.
• Eliminate the term “non-traditional students,” and encourage adults to go back to school to gain a degree and learn new skills by offering generous grant or loan programs for adults who want to—or are forced to—pursue a second career.
• Improve workforce development for service-sector workers, such as by broadening opportunities for continuing education.
• Provide more robust transitional assistance to people who lose jobs in manufacturing so they are able to renew their careers in other fields.
• Create pre-emptive training and education policies to help workers in manufacturing and low-skilled service jobs gain new skills in better-paid growth.
• Establish estate builder, or “worth at birth,” accounts for all newborns (to be used for wealth-building activities such as college tuition, affording a home, starting a business, or cashing in at retirement).
• Mandate minimum employer/employee pension contributions and make maximum 401(k) contributions the default option.
• Encourage more companies to provide investment advice to their workers.
• Provide financial education in schools and provide greater access to basic financial education and investment planning for adults.
• Create a universal guaranteed paid family leave benefit for new parents, perhaps as an add-on to the unemployment insurance system.
• Provide new parents with a “new baby tax credit” for the first three years of a child’s life.
• Double the tax break for child care expenses.
• Create a national, voluntary accreditation standard for child care quality.
• Reward businesses that offer their employees flexible work schedules, including flexible schedules for men.
• Permanently eliminate marriage penalties in the tax code, including and especially in the Earned Income Tax Credit.
• Expand the availability of employer-based child care.
• Provide tax breaks for eldercare expenses incurred by adult children caring for aging parents.
• Create incentives for enrollment in long-term care insurance plans and make long-term care insurance more accessible and affordable.
• Reduce and manage the growing costs for long-term care by increasing the availability of home or community-based care over institutional settings.
• Encourage healthier lifestyles to reduce future medical costs and promote better and more cost-effective techniques for managing chronic ailments.
• Invest in building and supporting the infrastructure of the service economy, such as broadband and better and more reliable mobile phone service.
• Reduce regulatory barriers in foreign countries that bar or limit American companies’ ability to sell more services abroad.
• Expand public funding for pure and applied research.
• Protect American intellectual property from international piracy and modernize the patent system.
• Reform the H-1B visa program to keep highly educated foreign graduates of American universities in the U.S.
• Reform and make permanent the R&D tax credit for businesses.
• Increase federal funding to public universities to improve their quality and support research.
• Use health IT, chronic care management, preventive health and end-of-life care management to slow the rate of growth in health care costs to the overall rate of inflation.
• Promote greater reliance on evidence-based medicine so that treatments and new technologies are deployed cost-effectively.
• Shift some of the burden of providing health insurance for middle-class workers from business to government (for example by making coverage of catastrophic or preventive health care costs a government responsibility).

Without doubt, there’s room for serious discussion about the policy and messages that will best appeal to – and be the most effective in helping – American middle-class families. But I dare you to call what was laid out above a “corporatist” or “Wall Street” agenda!

I know this piece won’t persuade those who are determined to hate Third Way and what it represents, nor is this piece intended to defend Third Way more generally.

What I do object to is the mischaracterization of a legitimate piece of policy research as “evidence” in a manufactured dispute that some are all too willing to incite for their own purposes.