A New Direction?

This week the Democratic Radio Address was delivered by House Democratic Leader Nancy Pelosi of California.

In it, Pelosi outlines in broad strokes the Democrats' platform for the 2006 mid-term elections.

Personally, I do feel that it's time for a new direction.  We've had over a decade now of a Republican-controlled congress.  Unfortunately, those who are leading that party are of the social conservative bent rather than the fiscal conservative persuasion.  Thus, we've gotten too much attention paid to social issues that really ought not be legislated, while (especially since 2001) we've had irresponsible stewardship of the country's financial resources.  I'm no fan of tax-and-spendism, but I'm even less a fan of borrow-and-spendism.

So I'm certainly open to hearing how Democrats would like to do things differently.

Unfortunately, based on this address, it looks like more of the same -- Republicans and Democrats are showing off their "Dumb and Dumber" plans for the country.

So what's good and what's bad about the Democrats' "New Direction"?

Leading off with the good, we have this vague reference to fiscal responsibility:

Our New Direction for America means turning away from the irresponsible deficit spending by President Bush and the Republican Congress that has added $3 trillion in new debt. We will restore the proven budget discipline that eliminated deficits and generated record economic growth.

Sounds great to me!  So, how will the Democrats accomplish this tremendous feat?

• Increased security  [Presumably through increased spending]

• Increased access to "affordable" health care  [Presumably through increased spending]

• Lowering prescription drug costs for seniors  [Presumably through increased spending]

• Making tuition tax deductable  [Definitely reducing federal income]

• Cutting student loan interest rates in half  [Definitely increasing spending on student loan subsidies]

• "Energizing" American with biofuels from the Midwest  [Presumably through increased subsidies, though perhaps paid for by eliminating petroleum subsidies]

• Commitment to research and innovation  [Presumably through increased spending]

So, I see a whole lot of new government spending, and a tax cut... which is pretty much the Republican formula for disaster that we've been following for the past several years.  Oh, the beneficiaries of the extra spending and the cut taxes are different, to be sure.  I guess that's the "New Direction" they're talking about.

But no mention of how that's going to do anything but increase the deficit, especially in the short term.  Of course the answer to that is higher taxes, but they're not going to run on that particular platform plank.  Not even any mention of sticking it to the rich for all the new taxes, because they have to know that they can't possibly balance the budget while dramatically increasing spending without taxing the middle class too.

A few other notable items from the address:

• No privatization of Social Security.  Doubtless a selling point to the boomers who are on the cusp of retirement now.  But studies consistently show that younger people have little to no confidence that the Social Security system with be there for them when they retire.  I don't think privatization is necessarily the answer, but neither do I think that Social Security in its current form can realistically be preserved indefinitely.

• Pulling out of Iraq.  Great idea, but the devil is in the details.  Do we pull everybody out all at once?  Disaster for the Iraqis.  Do we pull troops out a little at a time, as the Iraqis are able to defend themselves?  Much better, but when can we expect to be able to do that?  If we put an actual timetable on our "redeployment", what happens if the Iraqis aren't ready for us to pull out at that time?  If we're going to stay until they are ready, what's the point of the timeline?  If we're going to stick to the timeline no matter what, we may in fact end up abandoning the Iraqis at a critical time.  I'm not saying I've got the answers, I'm just saying that whatever the answer is, it ain't simple.

• Raising the minimum wage.  This is a pet peeve of mine, coming from a state that idiotically built in minimum wage increases tied to inflation.  This is another situation that's just not as simple as some would believe.  Granted, $5.15/hour is pitiably low, no question.  If you were making $5.15/hr and got a raise to $7.25/hr (as the most recent plan would do over 2 years), you'd be pretty happy.  Hell, I'd be ecstatic with a 40% raise, too. 

  But if you were making $5.15/hr and got laid off because your employer couldn't afford to keep as many people on staff at $7.25/hr, how happy would you be?  Or if you were a teenager unable to find a summer job because there just weren't any openings?

  So you give some people a raise, put some people out of work, and raise the cost of living for everybody, which hurts the middle class folks who were making more than minimum wage to begin with and get no increase, but who now have to pay higher taxes to support the extra government spending on social services that the freshly-unemployed (or now-unemployable) will now require.

  I'm not saying that raising the minimum wage is a bad thing, in and of itself.  The current rate of $5.15 set in 1996 has been in place for 9 years, and is now only worth $4.04 in 1996 dollars.  But I'm saying that it's not all up-side, and the negatives are very real and need to be considered.  Plus, the more abrupt the change (40% in 2 years is pretty abrupt!) the more traumatic the impact, and the more painful the down-side.

Comments

[David B. Wright]

Another item to consider on the minimum wage (this topic probably deserves its own post) -- states already have the ability to set their own minimum wage at a level higher than the feds.

So do we really need a new federal minimum wage? If a given state feels the need to raise the bar, they can (and many have).