POLITICS

York: After victory, liberals want income redistribution

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Photo - President Barack Obama (Getty Images)
President Barack Obama (Getty Images)
Politics,Byron York,Campaign 2012,Politics Digest

During the campaign it was commonplace to note that President Obama didn't have much of a second-term agenda. Beyond his desire to raise taxes on higher earners, most of the president's platform amounted to a promise to "not go back" -- that is, to protect the accomplishments of his first term.

But Obama's liberal supporters do have a second-term agenda, and it is a far-reaching one. That agenda, laid out a new article in the liberal magazine the American Prospect, is enough to set off alarm bells among conservatives in Washington and around the country.

In the piece, author Mike Konczal summarizes the work of some influential thinkers on the left who are asking the question: Now that Obama has been re-elected, and Obamacare is safe from Republican repeal, "what's next for the welfare state?"

They divide the answer into three parts. The first is further expansion of the social safety net. The second is an array of programs to act as a "springboard" for the poor. And the third is an "escalator" to address income inequality by giving progressively larger government grants to lower-income Americans.

On the safety net, the liberal plan begins with the premise that Obamacare isn't enough. "The program will still leave millions without health insurance," Konczal writes, "and it may fail, due to its complicated design, to contain costs."

Many Americans might say: Now they tell us. But the fact is, the passage of Obamacare did not mean the president's liberal supporters would give up on their dream of a federal single-payer health care system. Sen. Tom Harkin, D-Iowa, called Obamacare a "starter home," and for liberals it is just a first step toward their goal.

The other goal for the safety net is to radically remake the retirement system. Social Security would remain in place, but progressives are frustrated that 401(k) plans are used mostly by higher-income workers. So they want the government, in Konzcal's words, to "provide a universal IRA with an automatic enrollment to all Americans, as well as shifting 401(k)s over to a public-private, defined-benefit plan." Such a scheme would not only involve massive new federal spending, but would also create a vast new pool of previously private money under the government's control.

That's the safety net. The liberal "springboard" includes programs like universal taxpayer-paid preschool and guaranteed paid leave for all new mothers and fathers, to "make sure each person has the most opportunity possible."

The third goal, the "escalator," is perhaps the most radical. To address continuing income inequality, liberal thinkers propose sweeping redistributions plans. One is to increase the earned income tax credit so that it becomes a government wage subsidy for everyone who makes up to $80,000 a year.

"Another approach," writes Konczal, "would create an unconditional basic income that rises with GDP growth. The proposal gives every legal resident a cash stipend, usually targeted around the poverty level. This income is universal, so everyone gets it regardless of their income or work status, and it is unconditional."

Konczal notes that some liberals worry that giving everyone money for nothing could have adverse effects. For example, with that government-guaranteed income, presumably fewer people would work and pay taxes, which could make guaranteed income "politically unpopular while also affecting the tax revenues necessary to fund it."

Not to worry. Other ideas being kicked around include "boosting wages directly by intervening in the labor markets," which some call "predistribution," and by instituting stronger pro-union policies.

Skeptics will say that some of these proposals are old chestnuts liberals have been pushing unsuccessfully for years. That's true. Of course, national health care was one such chestnut that became a reality after many years of work.

The bottom line is not that Obama will pursue all these policies, nor that Congress will enact them. But there's little doubt the president's liberal supporters, and Obama himself, would like to push the nation in that direction. And in cases where there is no chance Congress would pass a particular measure, Obama might be able to use his executive authority to achieve at least part of his goal.

The Washington Post noted recently that "fighting income inequality [is] Obama's driving force." It has been at least since he chose to become a community organizer in 1985. Fighting income inequality in the traditionally liberal way -- by introducing new redistribution programs and expanding existing ones -- will likely be a continuing theme of the second Obama term.

Byron York, The Examiner's chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears on Tuesday and Friday, and his stories and blogposts appear on washingtonexaminer.com.

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