Political repurposing

The White House Middle Class Task Force was set up to shape policy, but now its work is part of election-year politics

two weeks after his inauguration, President Obama invited supporters of his 2008 campaign to the White House to lay out his plan for a Middle Class Task Force. The idea behind the task force was that research and public outreach could break through the partisan gridlock on Capitol Hill and help create good-paying jobs in growing fields and make sure that workplaces are safe and fair.

For the first year and a half of Obama’s administration, under the direction of Vice President Joe Biden, the task force developed policy ideas and promoted major initiatives, such as the stimulus legislation of February 2009 and the health care law that was enacted a year later.

But the partisan gridlock not only didn’t end, it intensified. The Middle Class Task Force failed to make headway with moderates on Capitol Hill, in part because they were a vanishing breed. Repub­lican moderates were wiped out in the 2006 and 2008 elections, in which Democrats took control of the House and Senate. In the 2010 election, Democratic moderates were clobbered. The ranks of the House Blue Dogs—moderate Demo­crats—were cut in half, from 54 to 26.

The result is a Washington where political arguments rule and where compromise is virtually non-existent.

Not surprisingly, the Middle Class Task Force stopped issuing reports in 2010 and went out of business. (White House officials declined to provide information on staffing and spending at the task force.) The task force’s executive director, Jared Bernstein, Biden’s former chief economic advisor, left the White House to become a senior fellow at the Center on Budget and Policy Priorities, a left-leaning think tank. Obama himself seemed to forget the task force’s work as he spent most of a year pursuing a debt deal with the Republicans.

But now the task force’s work is being repurposed. The president is incorporating the task force’s policy reports, research, and data into a political message designed to convince voters that he and other Democrats are more likely than Repub­licans to pursue policies that benefit the middle class. The goal now is a Democratic victory in November that will either force Republican moderates to work with the president on his middle-class agenda or elect enough congressional Demo­crats to enact legislation without them.

“I think what he hopes now is that electoral politics can put an end to the vicious partisanship,” Bern­stein says of the president.

Obama’s speeches on the middle class are now laced with populist appeals, pitting the virtuous middle class against the wealthy and their advocates on the right. The 2012 State of the Union address was filled with ideas to help the middle class, ideas that have no chance of passage in the current Congress. The proposals are meant only to frame the debate during the election campaign this year. It’s a shift that Obama’s liberal supporters have heartily embraced, and a final transition, perhaps, from idealist and accommodation-oriented compromiser to hardened politician desperate to win another term.

“His heart of hearts doesn’t want to talk in populist ways. He’s someone who likes to feel like he’s a conciliator who can bring people together and find common ground,” says Michael Kazin, a history professor at Georgetown University. “But when you are attacked, you have to find ways to counterattack.”

When Biden released the administration’s first, and ultimately last, annual report for the task force in February 2010, it was full of ideas that the administration hoped to turn into reality, and quickly.

The report laid out a case to pass health care reform, for example, on the grounds that private health insurance was eating up an increasing share of middle-class family budgets. It called for investments in green jobs since they tended to pay better and offer better benefits.

The report also suggested increasing aid to families putting their children through college to cope with ballooning tuition rates and to increase government research and development spending to bolster domestic manufacturing.

To help Americans save for retirement, the task force proposed a tax credit for workers who put money into an IRA. To help Americans balance their lives at work and home, it suggested a requirement that employers offer paid leave for new parents.

Everything in the report was backed up by statistics. College tuition, the report said, was up 60 percent since 1990 while middle-class incomes had only increased by 20 percent. Child care costs were out of control: an average of $15,895 a year for infants in Massachusetts, for example, the highest rate in the country. Nearly one in four middle-class families were spending at least 10 percent of their incomes on health care.

“Our job was to try to elevate issues of the middle class, to go to every meeting, and when we were talking about anything, from health care to financial regulation, make sure the middle class was in the room,” says Bernstein. But while the task force was having success at generating ideas, its political advice was not as sound.

Bernstein says he “always viewed health care reform as pretty central to loosening the middle-class squeeze,” and he says the data backed that up. But the political choice to tackle the issue in 2010 played a big role in the huge Democratic losses in the mid-term congressional elections that year.

“Health care didn’t directly enough target the middle class,” says Barry Bluestone, who directs the Dukakis Center for Urban and Regional Policy at Northeastern Univer­sity. “Obama’s advisors felt he had to make good on it, and he used a tremendous amount of political energy and diverted attention from the real key issue, which was economic security.”

Other task force ideas proved just as politically dangerous. Loans to green energy firms like the California solar panel maker Solyndra were painted by the GOP as wasteful after Solyndra declared bankruptcy. Republicans argued that the financial regulatory reform that Obama signed in 2010, another key piece of Biden’s middle-class strategy, actually hurt the middle class by making it more difficult for people to get loans.

And what did get done was the result more of brute political force than compromise built on the task force’s research. All of Obama’s achievements in 2009 and 2010 —the stimulus legislation, the health care law, and the financial regulatory overhaul—were passed with little or no Republican support.

When the politics of the situation turned in the 2010 elections and Republicans took back control of the House, Obama again took a stab at compromise, this time flatly contradicting the Middle Class Task Force’s advice by signing legislation cutting Pell grants to lower-middle-class families sending their children to college.

Obama also offered a “grand bargain” to reduce the deficit by $4 trillion, in part, by cutting future Social Security payments. The task force had promised that Social Security would remain a dependable source of income for middle-class retirees. The deal was ultimately scuttled because Repub­licans rejected new tax increases.

Other task force ideas, such as expanded tax credits for retirement saving and for child care, as well as legislation to make it easier for employees to unionize, went nowhere in the GOP-controlled House.

The administration’s discordant policy making was troubling even to many of the president’s most loyal supporters. “We were playing by their rules, the Republican rules,” says Rep. Jim McGovern, a Worcester Democrat who says Obama shouldn’t have been so willing to deal. “The notion that in order to balance our budget and reduce debt we need to go after programs like Social Security and Medicare or programs that help middle-class families send kids to college, those aren’t the problems.”

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Now the economy is slowly improving, but the administration isn’t getting much of the credit. Eco­nomic insecurity remains pervasive. “People are more at risk of falling out of the middle class now than even before the recession started,” says Tatjana Meschede, a lecturer at Brandeis University’s Heller School for Social Policy and Management. “There needs to be much more done to see significant change.”

But with the election year here, Obama has concluded that the best course for pursuing his middle-class agenda now lies not with the task force’s reports as much as a big political victory in November.