This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
Over the past decade, both Democrats and Republicans have pushed major initiatives to restructure our health and entitlement systems, arguing that significant changes were necessary in order to keep them afloat. So far, their proposals have consistently lurched too far either to the left or to the right of the median voter, and they’ve paid for it dearly each time at the polls. But both parties are right about one thing: The status quo is unsustainable. And until they can persuade average voters of this basic fact, the chances that our country will rise to meet this latest challenge look grim.
In 2004, President George W. Bush interpreted his reelection as a mandate to take on Social Security. Middle-of-the-road voters who had given Republicans their majorities in 2002 and 2004 didn’t agree, and they administered a stinging rebuke in the 2006 midterms. When Democrats regained unified control of the executive and legislative branches in November 2008, they took their success as a license to expand the size and scope of the federal government beyond what coping with the financial crisis required. Again, the voters in the middle didn’t agree, and they handed Democrats their worst midterm drubbing in decades.
Now this cycle of over-reaching is recurring yet again. Incoming House Republicans interpreted their victory as a mandate to dramatically shrink the size and scope of the federal government, and they voted for the Ryan budget with near-unanimity. Then came their defeat in New York’s 26th congressional district, a long-time Republican seat once occupied by Jack Kemp.
In January 2010, most Democrats attributed Scott Brown’s senate victory to the flawed personality and tactics of their party’s nominee–even though Brown had placed a single national issue at the center of his campaign. They learned last November that public discontent ran far deeper than that. In the wake of NY 26, some Republicans have been tempted to repeat the Democrats’ mistake, claiming that the phony Tea Party candidate drained support from their candidate. (If anything, the evidence suggests the reverse: The self-styled Tea Party candidate was a three-time former Democratic nominee for the seat, and as his support collapsed in the final weeks of the campaign, most of it went to the Democrat.)
Wiser Republicans know better: The central issue in the campaign was Ryan’s Medicare proposal, and that’s why they lost. But they still haven’t faced the full truth. In the previous cycle, Democrats made two claims: Republicans were misrepresenting their health care plan, and the people would change their minds when they learned more about it. The first was true, but the second wasn’t, and surveys show that it still isn’t. Now Republicans are offering the same two claims, and again, while the first is true, the second isn’t. The unpopularity of the Ryan Medicare proposal reflects a public judgment about its substance that isn’t likely to change very much. If Ryan himself had been running in NY 26 this year, he might have lost. And I don’t see how Republicans can “reframe” the unpopular facts away by next year. Just how, exactly, do you spin a plan that over the next two decades, according to CBO, will shift more than two-thirds of total costs to future Medicare beneficiaries?

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This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
In his State Department speech last week, Barack Obama threw down the gauntlet to Benjamin Netanyahu. In the Oval Office a day later, and more fully in an address to Congress yesterday, Netanyahu picked it up and threw it right back.
The question now is whether this clash can be turned into a new understanding between the United States and Israel that improves the prospects for the two-state solution both parties say they want. To bring this about, Obama will have to make further tweaks to his approach and rethink his declared stance on Palestinian refugees, among other matters. For his part, Netanyahu will have to accept the fact that events have overtaken key aspects of the 2004 agreement between the Bush administration and former Prime Minister Sharon. If peace is possible, it is only along the lines former Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas explored during their 2006-2008 negotiations.
Obstacles to such a meeting of the minds between Obama and Netanyahu begin at the personal level. Whatever they may say in public, these two leaders genuinely dislike each other. Obama regards Netanyahu as an untrustworthy obstructionist; Netanyahu regards Obama as a blundering naïf.
Second, they disagree about the prospects presented by the status quo. Obama believes that changes on the ground have made it more dangerous to stand pat than to move forward, while Netanyahu believes the reverse. Obama, to his credit, has offered a clear and coherent argument for his position: The demography of the West Bank is shifting to Israel’s disadvantage; technological changes are making it harder for Israel to defend itself in the absence of genuine peace; as democratic movements surge throughout the Middle East and North Africa, Arab publics must see that peace is possible; and as the “international community” is becoming increasingly impatient, Israel is becoming more and more isolated. Resuming peace talks, the argument continues, is the only way of heading off a confrontation at the United Nations this summer that will leave Israel and the United States standing alone, not only against the developing world, but most of Europe as well.
For his part, Netanyahu believes that the turmoil in North Africa and the Middle East makes peace harder, not easier, to achieve and renders the status quo, for all its imperfections, the safer option for the time being. Until a new regime is established in Egypt and new leadership takes power, the future of the Israeli-Egyptian peace treaty–a linchpin of Israel’s security–will remain in doubt. The widening gulf between Israel and Turkey’s Islamist government is disconcerting. It may well be that changes in the region catalyzed the rapprochement between Fatah and Hamas, which only made a bad situation worse.
In addition, the two leaders have different views of the forthcoming UN vote on Palestinian statehood. Netanyahu is prepared to tough it out, even if the Europeans break toward the Palestinian side and only the United States is left to stand by Israel. That is the scenario Obama is desperate to avoid. If America is put in the position of being the last obstacle to international recognition of a Palestinian state, Obama’s aspiration to improve relations with the Arab and Muslim world would probably be thwarted for quite some time. Netanyahu doesn’t think that’s a problem; Obama does.
Even if these differences of perspective could be set aside, however, there’s a third problem: Obama and Netanyahu disagree about the conditions on which Israeli-Palestinian negotiations can and should resume, and the terms on which it should be resolved. Netanyahu’s baseline is the letter President Bush gave then-Prime Minister Sharon on April 14, 2004 as part of a sequence of events including Israel’s withdrawal from Gaza and the construction of its security fence. Here, verbatim, are the relevant portions of that letter:

“The United States is strongly committed to Israel’s well-being and security as a Jewish state.”
“As part of a final peace settlement, Israel must have secure and recognized borders, which should emerge from negotiations between the parties in accordance with UNSC Resolutions 242 and 338.”
“In light of new realities on the ground, including already existing major Israeli population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949, and all previous efforts to negotiate a two-state solution have reached the same conclusion. It is realistic to expect that any final status agreement will only be achieved on the basis of mutually agreed changes that reflect these realities.”
“[A]n agreed, just, fair, and realistic framework for a solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state, and the settling of Palestinian refugees there, rather than in Israel.”
“[T]he United States supports the establishment of a Palestinian state that is viable, contiguous, sovereign, and independent …”

It is against this baseline, which Israel’s right-wing coalition and its many American supporters cherish, that Netanyahu judged what Obama said at the State Department on May 19. Here are the corresponding sections from Obama’s speech:

“[A] lasting peace will involve two states for two peoples: Israel as a Jewish state and the homeland for the Jewish people, and the state of Palestine as the homeland for the Palestinian people …”
“[T]he borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps …”
“The Palestinian people must have the right to govern themselves … in a sovereign and contiguous state.”
“I’m aware that these steps alone will not resolve the conflict, because two wrenching and emotional issues will remain: the future of Jerusalem, and the fate of Palestinian refugees.”

This schematic comparison clarifies what is and what is not in dispute between Netanyahu and Obama. They clearly agree on a two-state solution, on the need to recognize Israel as a Jewish state, and (less clearly) on the importance of territorial contiguity for a Palestinian state. And whatever Netanyahu might wish, both Bush’s letter and Obama’s speech leave open the final status of Jerusalem.
The comparison also identifies key points of difference between the Bush and Obama administrations, and between Obama and Netanyahu. First, along with the vast majority of Israelis, the Bush administration believed that the refugee problem could be resolved in only one way: The refugees would have the right to return to the new independent Palestinian state, but not to Israel. By contrast, Obama explicitly left that issue open. Whatever his rationale, any Israeli government is bound to find that stance disconcerting. Obama surely understands that any significant flow of Palestinian refugees to Israel would be a deal-breaker. If he’s in the business of saying out loud what everyone already knows, this would be an appropriate addition to the list.

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This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
Because so much of what passes for political debate in this country takes place in a faux-fact zone, it is a welcome change to read Reihan Salam’s latest essay in the National Review. During the 2008 campaign, Barack Obama famously promised that taxes would either stay the same or go down for households making less than $250,000 a year. But Salam points out that there’s no way of reducing the budget deficit to acceptable levels, let alone financing the kind of federal government Obama favors, while relying solely on income and payroll tax increases for households making more than that figure. Of course, there’s not much that can be squeezed out of the bottom four income quintiles (households making less than $100,000 per year). On the other hand, relying solely on the rich for added revenues would imply tax rates in excess of 75 percent. But what about the well-off but not rich–those in the fifth quintile who earn between $100,000 and $250,000 a year? Can they really be held harmless?
To dramatize the problem we’re facing, let’s consider the analysis the Urban Institute’s Eugene Steuerle and Stephanie Rennane published in January, which looked at taxes and benefits for households in different income brackets. The average couple earning $112,000 and retiring in 2010 will have paid $140,000 in lifetime Medicare taxes, but is expected to receive lifetime Medicare benefits totaling $343,000. Twenty years from now, the same couple would have paid $171,000 in lifetime Medicare taxes and would receive $530,000 in benefits. (Technical note: These amounts are in constant 2010 dollars, adjusted to present value using a 2 percent real interest rate. In calculating net benefits, the authors have taken into account premiums as well as payroll taxes.)
Or consider the analysis USA Today published last week, which found that Americans are paying the smallest share of their income for taxes since 1958–23.6 percent, versus about 27 percent in the 1970s, 1980s, and 1990s. On average, a person making $100,000 this year will pay $23,600 in combined taxes–federal, state, and local, income, payroll, and sales–versus $28,700 in 2000 and $27,300 in 1990. Even when the one-year Social Security tax cut ends, the tax gap between now and a decade ago for individuals making $100,000 will still be more than $3,000.
Of course, you might argue we’re short on revenues because the tax code has let the very wealthy off the hook in recent decades. Maybe so, but it’s hard to see that in the data. According to the Urban-Brookings Tax Policy Center, the effective tax rate for all federal taxes in 2009 was 18.2 percent. The effective rates by quintile were:
Lowest -0.9
Second 6.6
Third 13.4
Fourth 17.2
Top 22.9
But maybe the real action is within the top quintile of income-earners, with the super-rich making out like bandits. Again, the Urban-Brookings numbers don’t support that story:
80-90 19.4
90-95 22.0
95-99 23.5
Top 1 percent 26.1
Top 0.1 percent 27.9
This is just a one-year snapshot, of course. What about trends over time? We know that the distribution of income has become less equal in recent decades, with those at the top commanding a larger share. You might think that the share of taxes paid by high earners has declined during this period, shifting the burden to those below. But according to the CBO, that hasn’t happened either. While the share of national income for the top quintile and the top 1 percent has risen considerably since the mid-1980s, their share of total federal taxes has risen even more.
You might still argue, however, that the right comparison is not across time but across national boundaries. Surely the rich pay more of the total tax burden in other advanced democracies, and we need to become more like them. Wrong again. Using 2005 OECD data, The Wall Street Journal recently reported that the share of taxes paid by the top 10 percent in the United States is 1.35 times larger than their share of income. The comparable number for France was 1.10 times; for Germany, 1.07 times; for the OECD as a whole, 1.11. And this is what we should expect, given that most other democracies rely less on income taxes and more on alternatives such as the VAT, which is less progressive.
Finally, you might be curious about the numbers lurking behind the abstractions of quintiles. I was too, so I checked. According to the Census Bureau, the top 5 percent of household incomes began at $180,001. The Obama campaign pledge has the effect of exempting all but the top 2 percent of households from even the possibility of higher taxes.
How realistic is this? It’s widely agreed (even across party lines) that if increased tax revenues are to be part of a long-term fiscal stabilization plan, they should come via a version of the 1986 reform, which broadened the tax base by reducing tax expenditures–i.e. special tax credits, deductions, exemptions, deferrals, and preferential rates. But as a recent note from Roberton Williams of the Tax Policy Center makes clear, it’s the well-off but not rich (i.e. the top quintile excluding the very rich) that benefits massively and disproportionately from itemized deductions and exclusions from taxable income. In other words, while it may make political sense to shield households that fall between the 80th and the 98th income percentiles (i.e. those making between $100,000 and $250,000 per year) from tax increases, we won’t raise much revenue if we do.
This prospect won’t trouble the conservatives, who don’t want to raise taxes on anyone and are prepared to gut the federal government in the process. But it should alarm moderates and liberals who believe in public investments and the social safety net. Unless Obama is prepared to tolerate huge deficits indefinitely, or to emulate arch-conservatives and curb the budget deficit with spending cuts only, he will have to break his unsustainable tax pledge at some point. The only question is when.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
Every five years, the Pew Research Center publishes a survey-based political typology, which uses attitudinal scales and cluster analysis to locate relatively homogeneous groups within the American electorate. This year’s survey found eight such groups–three at the core of the Democratic coalition (New Coalition Democrats, Hard-Pressed Democrats, and Solid Liberals), two Republican (Staunch Conservatives and Main Street Republicans), and the remaining three independent (Libertarians, Disaffecteds, and Post-Moderns). This form of analysis makes it possible to define areas of tension within each party’s coalition, as well as unexpected convergences across party lines. The results yield a number of surprising discoveries about the upcoming political opportunities–and liabilities–that lie in store for both parties.
The opportunity for compromise is greater than you think. One issue that enjoys a surprising degree of bipartisan support for reform is immigration. 72 percent of respondents favor a path to citizenship for illegal immigrants, with only 24 percent opposed. Conversely, respondents favor tougher enforcement of immigration laws and our border by a margin of 78 to 19. In other words, there’s a super-majority for comprehensive immigration reform waiting to be mobilized. Now look at the breakdown by group. Majorities in seven of the eight–including one of the core Republican groups–favor a path to citizenship. Even the “Staunch Conservatives” are split down the middle, 49/49. And every group–even the “Solid Liberals”–favors stronger enforcement. President Obama and his team will be guilty of political malpractice if they don’t push hard for action, and Republicans will pay a price if they go all-out to block it.
The same kind of consensus exists when it comes to reducing the federal budget deficit. All the Democratic groups say that reducing it will involve a combination of spending cuts and tax increases; no surprise there. But 59 percent of “Main Street Republicans” agree. Even libertarians split evenly on this question. Staunch Conservatives are the only group favoring a spending-cuts only approach, a stance endorsed by only 20 percent of the overall electorate. Paul Ryan and the House Republicans are stunningly out of touch with mainstream public opinion on this issue, and it’s hard to believe that Republicans won’t pay a political price unless they trim their sails.
The Democrats’ coalition is remarkably shaky. Political observers have long noted that the Democratic core is less homogeneous than the Republican one, and the Pew survey adds precision to this impression. For example, while both core Republican groups self-identify as conservative, liberals dominate only one of the three groups that make up the Democratic coalition. In the other two, moderates form a plurality, and conservatives outnumber liberals.
These divisions among Democrats become evident when it comes to questions about the role of government. While the issue unites the Republican core, 68 percent of “Hard-Pressed Democrats,” a predominantly blue-collar group, say that government is almost always wasteful and inefficient; 74 percent of Solid Liberals, a much more educated and upscale group, disagree. Fully 40 percent of Hard-Pressed Dems favor a smaller government, versus less than 20 percent for the other two Democratic groups. Not surprisingly, fully half of Hard-Pressed Democrats say that reducing the budget deficit is a top priority for this year, versus only 32 percent for Solid Liberals. And blue-collar Democrats are much more sensitive to rising prices than is any other group in the electorate, suggesting that the continuation of high gas prices into the 2012 presidential election season could reduce their enthusiasm for the incumbent.
Obama needs to rebuild support among a key group of independents. It’s likely that independents will play an outsize role in determining both parties’ prospects in 2012. Of the three independent groups, the most intriguing is the one the Pew researchers call the “Post-Moderns.” It is the only group in which self-described moderates form an outright majority. Its members tend to be young, white, well-educated, and upscale. They are liberal on cultural issues, immigration, the environment, and foreign policy. At the same time, they are pro-business and pro-Wall Street, and they are skeptical of expansive programs aimed at helping minorities and the poor. 61 percent of Solid Liberals believe that “racial discrimination is the main reason many blacks can’t get ahead”; 79 percent of Post-Moderns disagree. For them, post-racial America is a fact, not an aspiration, and they supported Barack Obama in 2008 in part as symbol and proof of that fact.
Of all the groups, Post-Moderns are the most likely to trust government and the least likely to be angry with it, and half of them believe that government often performs better than people give it credit for. But these affirmative attitudes don’t translate into support for a more expansive public sector. Only 35 percent of Post-Moderns favor a bigger government providing more services, for instance, while 55 percent opt for a smaller government offering fewer services. Not surprisingly, this group responded especially negatively to the government activism of the 111th Congress. It gave Obama an astounding 52-point margin over McCain; two years later, this margin was cut in half, the largest fall-off in Democratic support registered by any group.
Taken as a whole, the Pew survey suggests that each political party faces a challenge next year. If hard-core conservatives dominate the Republican presidential nominating process, the eventual candidate may be forced to endorse positions on important issues that a majority of the electorate rejects. On the other hand, unless Obama can alter some of the impressions that independents and even some Democrats have formed during his first two years, his support may well be less broad-based and enthusiastic than it was in 2008. If both parties meet their respective challenges, 2012 could witness a productive debate on basic issues. If neither does, the election is likely to be shrill, negative, and thoroughly dispiriting.

Charlie Cook’s latest National Journal column takes a comprehensive look at congressional redistricting around the country, and while it’s hard to call it good news for Democrats, it’s certainly a lot better than what we were hearing immediately after last November’s elections:

Just three states–Arkansas, Iowa, and Louisiana–have completed congressional redistricting. Although Republicans were forced to swallow one of their own seats in Louisiana because the state is losing one, the district to be cut in Iowa may come out of either the Democratic or the Republican column. Forty states will need to complete new maps in the next year; so far, anyway, redistricting isn’t looking like the GOP bonanza that some Republicans initially thought it would be.
Republicans haven’t had great early success in channeling big money toward their vulnerable freshmen, in part because one in five House members is a GOP freshman and they are competing for resources. Instead, many GOP strategists are counting on redistricting to help shore up seats in places where Republicans might have been able to win in a 2010 kind of environment but wouldn’t flourish again under the same map.
In Ohio, Pennsylvania, and other states, redistricting may indeed boost some of these freshmen and take Democratic opportunities off the table. In terms of the overall numbers in the House, however, redistricting is increasingly looking like a wash. Even though Republicans will redraw four times as many seats as the Democrats will, the GOP’s chances to win big in the mapmaking game are offset by the number of seats the party already picked up in 2010.

Cook also mentions that Republicans in some states (e.g., Texas) simply can’t overcome the surge in Hispanic population. In other states, everyone must cope with a great deal of procedural uncertainty, notably in California and Florida, who are implementing new “nonpartisan” redistricting systems. It’s too early to make definitive judgments, but it’s certainly not looking that bad for Democrats, who should benefit in 2012 from much more favorable turnout patterns.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
Three recent items–two surveys and a news article–illuminate the current state of our country’s fiscal debate. Taken together, their message is straightforward: The American people want the problem addressed now, they’re dissatisfied with the solutions proposed thus far, and everything depends on the Senate’s “Gang of Six.”
According to a Pew Research poll released April 26, 81 percent of the American people believe that “the federal budget deficit is a major problem that the country must address now.” Not only is this figure up 11 points in the past four months, but also it reflects a rare consensus across lines of ideology and partisanship. 89 percent of Republicans respond in the affirmative; so do 81 percent of Democrats and 79 percent of Independents. This is as close to unanimity on a major issue as our country ever gets.
While the people have issued clear marching orders to their elected representatives, they have little confidence that their voices will be heard or heeded. The same poll notes that only 31 percent believe that we’ll make significant progress toward deficit reduction in the next five years, down from 37 percent in December. The 50-point gap between the supermajority that wants the problem to be addressed seriously and the minority that thinks this will happen is a pretty good measure of the low level of confidence Americans now repose in their governing institution. If we get to the general election with unemployment still much too high and progress toward deficit reduction stalled, the public mood will be sour and explosive.
Why are people so dissatisfied with what the political system is offering up? A Gallup survey out April 27 shows that 43 percent prefer the Republican/Ryan plan for long-term deficit reduction to the Democratic alternative, while 44 percent prefer the Democratic/Obama plan to the Republican alternative. But they don’t much like either one. Asked about the Obama plan, 71 percent say that it doesn’t go far enough to fix the problem, and 62 percent fear that Democrats will use the deficit as an excuse to raise taxes. Asked about the Ryan plan, 66 percent are worried that it cuts Medicare too much, 64 percent that it would “take away needed protections for the poor and disadvantaged” and “protect the rich at the expense of everyone else.”
In the midst of such public dissatisfaction, the Senate’s “Gang of Six” has become the locus of all hopes for a compromise. The same day that the Gallup poll was made public, a Bloomberg article offered some insight into the Gang’s negotiations: Democratic Senator Mark Warner of Virginia said that the group is considering a plan to cut $3 in federal spending for every $1 of revenue it raises. He suggested that it would involve spending cuts in every major budget category along with changes to Medicare, Medicaid, and Social Security. And he expressed a sense of urgency: If the Gang cannot create a bipartisan plan around which responsible members of both parties can coalesce, however reluctantly, over the next two months, we may well be heading for a damaging train wreck over the debt ceiling.
In this murky situation, a few things are clear. First, the American people have grave doubts about what the parties have proposed. Second, neither party can get its way on its own. And third, the Senate plan under negotiation seems closer to center of gravity of public opinion than either House Republicans or the White House, and more responsive to the people’s reservations about the plans made public so far.
Republican Senator Tom Coburn of Oklahoma, another member of the Gang, said last Sunday that “The country can’t afford for us not to have an agreement.” He’s absolutely right. Not only would the collapse of the Gang’s efforts endanger our international fiscal standing this summer; it would virtually guarantee that no significant steps toward fiscal stability would occur until after the presidential election–at the earliest.
Amidst our hyper-polarized politics, it falls to the Senate to display reason and moderation. The senators may not welcome this responsibility, but they dare not shirk it. The Founders would not have been surprised.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
No later than the first year of the next presidential term, we’ll have to find a way of coming together around a plan to restore long-term fiscal sustainability. There are three principal impediments to agreement: the president’s health reform law; Medicare and Medicaid; and taxes. I don’t mean to suggest that other issues–such as defense and Social Security–are trivial, but only that the gaps on these issues seem easier to bridge.
Of the three most difficult issues, one–the health reform law–will have to wait until 2013, because it will be a focal point of the 2012 presidential campaign. Obama will defend it staunchly, while the Republican nominee will demand its repeal. (If Mitt Romney is his party’s candidate, it will be interesting to see how he frames the argument.) If Obama wins, the law will go into effect and become part of the fiscal baseline; if he loses, it probably won’t.
I’ll focus today on one of the remaining issues–Medicare–reserving the others for future columns. I’m leading off with it because I have some skin in the game: This January, I had the sobering experience of signing up for Medicare. (Note to fellow boomers: make sure you’ve set aside a good bottle of wine to get you through the period of mourning that follows.)
As I filled out my form, I began thinking about my situation. My wife and I are both professionals. While neither of us is paid lavishly, our combined income is enough to place us in the upper-middle class. For us, Medicare’s major advantage is guaranteed issue regardless of preexisting conditions. (And you don’t reach my age without accruing some.) If we had to pay the full actuarial cost of our insurance, we could. Yes, we’d probably have to make some adjustments elsewhere in our budget. But we’d still be more comfortable than most working Americans, even after we retire.
There’s an obvious rejoinder: Haven’t my wife and I already paid into the system for the benefits we’ll receive over the next two or three decades? Answer: Yes, but not enough. A few months ago, Eugene Steuerle and Stephanie Renanne of the Urban Institute put out a very useful summary, “Social Security and Medicare Taxes and Benefits Over a Lifetime,” calculated for different retirement cohorts. While I’m no methodologist, their assumptions seem straightforward and plausible. Applying them to our own case suggests that the value of my contributions falls short of the actuarial value of our benefits by at least $100,000. And if my wife and I were younger professionals scheduled to retire in 2030, the gap would be far greater.
So who’s going to make up the difference? Answer: today’s workers, many of whom are already struggling to raise their children, pay the mortgage, and save for college. Worse, workers as a share of the total population are declining. A recent analysis of BLS data showed that share declining in 2010 to only 45.3 percent, the lowest since 1983. Yes, part of that decline represents the effects of the Great Recession. But longer-term trends are also evident: our population is aging, the share of women working outside the home has plateaued, and men have been dropping out of the labor force for more than a quarter of a century. A generation ago, more than 80 percent of working-age men were employed. Today, that figure stands at 66.8 percent.
One of the large demographic developments of the past generation is the emergence of a mass upper-middle class, a new meritocracy of credentialed professionals whose family incomes reflect the compounding effects of assortive mating. While we are not rich, our lives differ quantitatively and qualitatively from those of today’s hard-pressed middle class. Our lives are rich with choices; theirs are driven mostly by necessity. It’s just not right for us to make their lives even harder. Nor is it sustainable. Over the next decade, our country can’t afford the tax cuts the Republicans insist on giving us. Nor can it afford to subsidize our retirement–certainly not to the extent of current law.
My fellow boomer-professionals, fiscal responsibility begins at home. Didn’t the young president who inspired so many of us fifty years ago have something to say about this? Are we still capable of responding?

This item by TDS Contributor and Progressive Policy Institute senior fellow and managing editor Lee Drutman is cross-posted from Progressive Fix.
In today’s Washington Post, David A. Fahrentold marvels at what he calls the “Line Items That Won’t Die” – federal programs that benefit narrow interests, but somehow manage to keep getting funded: “One spends federal money to store cotton bales. Another offers scholars a chance to study Asian-American relations. Two others pay to market U.S. oranges in Asia and clean up abandoned coal mines.”
Fahrenthold attributes their success to having Congressional champions. The study of Asian-American relations, for example, takes place at a Honolulu nonprofit called the East-West Center, and enjoys the support of Sen. Daniel Inouye (D-Hawaii), who also happens to be chairman of the Senate Appropriations Committee.
But there’s also a broader story: the simple fact that when a government program benefits a narrow constituency, it’s very easy for that constituency to organize and make demands on legislators about why this program is worth keeping. The larger public, meanwhile is rarely aware, and even if it were aware, is unlikely to do anything.
Take the Market Access Program discussed in the article, which helps promote U.S. agricultural products abroad. A coalition of agricultural interests benefit greatly from this, and they are organized to advocate fiercely for its continuance and threaten to punish any Senator or Congressman who would vote against the program by withdrawing votes and campaign contributions. Nobody in the general public, however, is likely to care about or vote based solely on this single issue.
This is the difference in what congressional scholar R. Douglas Arnold has called “attentive publics” and “inattentive publics.” Attentive publics are the small groups that care deeply about particular policies, and as a result, are likely to be more influential because they care so intensely about that one issue. Inattentive publics are everyone else. The public might be outraged after reading about the Market Access Program, but the likelihood of most people following up are small. Think of it this way: If 1,000 people want money from you, but only one bothers to keep calling you up telling you why he’s so deserving and threatens to punch you in the face if you don’t give him the money, you’re probably going to give that one person money, especially if it’s likely the other 999 will not even notice or if they do, won’t remember.
Another way to think about it (borrowing from James Q. Wilson) is in terms of distributed costs and concentrated benefits. The benefits of a program that pays peanut and cotton farmers to store their bales and bushels in warehouses are solidly concentrated among peanut and cotton farmers. The costs are distributed to everybody else. But the cost per taxpayer is so small that it’s hard to imagine any group getting organized to fight this particular program. Whereas the farmers – well, they’re damn certain to do fight any cuts to the program. What results is what Wilson calls “client politics” – where small narrow interests work with the relevant congressional committee and executive agency staff to build a usually impenetrable consensus around the importance of a single program.
The challenge for governing is that the federal budget and tax code and regulatory apparatus are filled with thousands upon thousands of these programs, each protected by a small consensus, and without any public coverage. One only need to scroll through the Federal Register to see all the small issues that could potentially benefit small attentive publics at the expense of everyone else. Or better yet, look through the tax code to find all the little credits and deductions for very narrow benefits. It’s enough to make your head spin round and round and round. Jonathan Rauch has pessimistically called this condition “Government’s End.”
I don’t really have a solution. In part, this is the nature of our current system of government and the size and complexity of our economy. But the point is, these programs are very difficult to kill, and Fahrenthold’s story is just the tip of the iceberg.

Every now and then a pundit puts her or his finger on an important phenomenon that’s been hiding in plain site. That’s true of E.J. Dionne’s remarkable Washington Post column over the weekend on the “American Ruling Class” and its unprecedented indifference to the fate of the country:

An enlightened ruling class understands that it can get richer and its riches will be more secure if prosperity is broadly shared, if government is investing in productive projects that lift the whole society and if social mobility allows some circulation of the elites. A ruling class closed to new talent doesn’t remain a ruling class for long.
But a funny thing happened to the American ruling class: It stopped being concerned with the health of society as a whole and became almost entirely obsessed with money.

Dionne goes on to chronicle the declining effective tax rates of the very wealthy, and its connection to one of the most intensive lobbying campaigns in U.S. history, particularly aimed at lowering or eliminating taxation of capital gains and dividends, which is of greatest important to the financial sector:

Listen to David Cay Johnston, the author of “Free Lunch” and a columnist for Tax Notes. “The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush,” he said in a telephone interview. “So their effective rate has gone down more than 40 percent.”
He added: “The overarching drive right now is to push the burden of government, of taxes, down the income ladder.”
And you wonder where the deficit came from.

It’s unlikely that the “ruling class” notices this sort of admonition or cares about it. But it does provide a nice break in the monotonous pandering of conservatives to the very rich as oppressed “job creators” who need to be liberated from taxes and regulations in order to work their magic on behalf of the useless drones who make up the bulk of the U.S. population, who are longing for salvation from John Galt.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
From time to time until November 2012, I’ll be offering a snapshot of the emerging presidential race. This is the first. Here’s the headline: Given current national trends and a credible Republican nominee, the presidential election would be very, very close, and President Obama might even lose. The economic situation looks like it will not be good enough for the president to cruise to victory, yet it will not so bad that voters are in the mood to repudiate him. In such a situation, campaign tactics, branding, and the identity of the Republican nominee would likely determine the outcome of the election–and in that context, Obama’s aggressive pivot to the center, including his forthcoming speech on deficit reduction, could have a decisive effect on whether or not he wins a second term.
Of course, as the issues director of Walter F. Mondale’s presidential campaign from 1982 until the end, I’m better positioned than most to understand the limitations of such snapshots. At this point in 1983, President Reagan’s approval ratings were in the low forties, and several polls showed him and Mondale in a statistical dead heat. Eighteen months later, his ratings were in the high fifties, and he ended up with 59 percent of the vote. In the interim, of course, economic growth had surged, and the unemployment rate had fallen by 3 percentage points.
History doesn’t repeat itself, but it does often rhyme. If economic growth averages 4 percent between now and November 2012, unemployment falls to 7.3 percent, and the real per capita income of average families grows by 3 percent, Obama will be the odds-on favorite for reelection against any Republican. Conversely, if growth languishes, unemployment remains close to its current level, and per capita income doesn’t improve perceptibly, Obama will probably lose to a credible Republican–especially if he also faces stubbornly high gas prices. But if the overall economic picture is between the best and worst case, which is what the consensus of economic forecasters now predicts, the election will be close, campaign themes and tactics will influence the outcome, and the identity of the Republican nominee will matter hugely.
Here’s what the numbers show right now, leading into Obama’s speech on long-term fiscal policy. His approval rating averages about 47 percent–not bad, but not good enough to prevail in the general election. A number of surveys indicate that more people like the president personally than like his policies. In the most recent Pew survey, for example, while 47 percent approved of his overall performance as president, his favorable rating on handling the economy was 39 percent; energy policy 40 percent; the budget deficit a woeful 33 percent. And remarkably, when it comes to the deficit, young voters aged 18 to 29–the cohort most favorably disposed to Obama–are even more critical, with only 29 percent approving.
When people are asked to think about Obama’s reelection in broad terms, additional evidence of potential vulnerability emerges. In recent months, a number of national surveys have posed similar versions of the question: Do you think Barack Obama has done well enough to deserve reelection, or would the country be better off with someone else? The “well enoughs” average about 43 percent; the “someone elses” 49 percent.
When framed in terms of head-to-head competition between the president and a generic Republican, Obama also appears vulnerable. In the 14 national surveys conducted over the past two months, Obama averages about 44 percent, the unnamed Republican about 41 percent. Seven of these surveys show the president in the lead, four give the challenger an edge, and three are tied.
Of all these surveys, the only one that gives Obama a significant advantage–47 percent to 37 percent–is Pew’s March 23 offering. This anomaly intrigued me, so I asked Pew to provide me some internal breakdowns: On ideology, their sample broke down 41 percent conservative, 35 percent moderate, 20 percent liberal–right in line with the national averages. Not surprisingly, the president enjoyed better than 80 percent support among liberals. But he was also favored in the Pew survey by 66 percent of the moderates who chose between Obama and a generic Republican, and by 33 percent of the conservatives. To put it mildly, these last two numbers are implausible leading indicators. Since 1976, no Democrat has received more than 62 percent of the two-party moderate vote, and only Jimmy Carter has gotten anywhere near 30 percent of conservatives. Bill Clinton received 22 percent of the two-party conservative vote in 1996; Obama got 20 percent in 2008. And given what has transpired since, he’d do well to equal that figure next time. Thirty-three percent? No way.
And what about head-to-head competition with specific Republicans? Four of them enjoy high enough name recognition to make comparisons meaningful, and they divide neatly into two groups. All the surveys show essentially the same thing: While Obama would beat Sarah Palin and Newt Gingrich by double-digit margins, he’s in a statistical dead heat with both Mitt Romney and Mike Huckabee.
Additionally, this must all be thought of in the context of the electoral college. For the reasons discussed in previous columns, I persist in my belief that traditionally pivotal swing states such as Florida and Ohio will continue to be decisive in 2012. During the past month, I’m aware of two credible surveys–by Quinnipiac and Public Policy Polling (PPP)–done in each of these states. Let’s take them in turn:
For Florida, Quinnipiac found Obama’s job approval at 47 percent (49 percent disapproval).When asked about Obama’s reelection, 45 percent said he deserved a second term versus 48 percent saying no; and 40 percent said they would vote for Obama compared to 42 percent for an unnamed challenger. While 70 percent of respondents said they like the president, only 41 percent like his policies. PPP showed Obama’s Florida approval rating at 48/47, Romney’s at 39/39, and Huckabee’s at 40/39. In head-to-head contests, he leads Romney 46 percent to 44 percent (well within the margin of error) and Huckabee by 50/43.

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