Hillary Clinton to outline economic plan to shift more wealth to middle class
After months of running on broad themes backed by little in the way of actual policy proposals, Hillary Rodham Clinton will announce Monday what aides call a far-reaching plan to restructure the economy to move more of the nation’s wealth to middle- and low-wage earners.
In what the campaign bills as a landmark speech at the New School in New York City, Clinton will offer a vision for growth that is notably different than the one her husband, Bill Clinton, pursued when he was in the White House, and that pivots away from some of the policies of President Obama.
The agenda, written with input from some of the country’s most liberal economists, reflects not just Clinton’s effort to appeal to a Democratic Party that has drifted leftward, but her disenchantment with the centrist economic policies she once favored.
It seeks to address what has become one of the key concerns of voters this election season, which is the failure of the economy to raise middle-class incomes. The problem has consumed policy advisors for both Republicans and Democrats, and strategies for solving it are emerging from many campaigns.
“The moment we are in today is unique,” said Neera Tanden, an advisor on the Clinton plan who runs the Center for American Progress, a think tank influential in the campaign. “The old rule of economic growth that when workers are more productive, companies reward them with wage increases no longer applies.”
After decades in which virtually all working Americans saw their paychecks rise, growth became uneven in the 1980s, and over the last 15 years it stopped altogether for most families.
Clinton is seeking to distinguish herself from Republican candidates, and Jeb Bush in particular, who are focusing their message on more general economic growth. Bush set as his central economic goal boosting the rate at which the gross domestic product increases to a sustained 4%. Many liberal economists are skeptical that’s possible and argue it’s the wrong benchmark for success even if it were.
Clinton will frame the election as taking place in the dawn of a new and troubling economic era, which bears little resemblance to the era Bill Clinton ushered in before the Internet revolution and globalization took hold. She will note how her challenge differs from that of Obama, whose actions were largely aimed at fixing the immediate financial crisis he inherited.
At the center of Clinton’s agenda will be tax proposals that push the financial burden of government away from the middle class and small businesses toward higher earners, as well as new rules for the financial sector. Campaign aides say Clinton will begin previewing some of those proposals Monday, followed by a rollout of the details in weeks to come.
“Income inequality has become a bigger part of the national discussion,” said Alan Blinder, an economist at Princeton advising the campaign. “People have the correct feeling that the system is not fair.... Hillary will dispute the notion that the only thing we need to care about is getting the economy growing faster. It’s not just that the pie gets bigger, but how that pie is shared.”
Amid concerns by progressives that Clinton, who represented New York in the U.S. Senate and has deep political ties to the financial industry, would be reluctant to interfere with the business of investment firms, the candidate will promise to do exactly that.
In the more narrowly crafted proposals that follow the speech, Clinton will target what the campaign calls a mind-set of “quarterly capitalism” on Wall Street and elsewhere — emphasizing making a quick return with little regard for how it is being generated — that she says has pushed the economy too far away from creating things of real value.
Specific taxes and shareholder engagement rules Clinton will later propose would redeploy capital toward more durable sources of economic growth, such as research and development and infrastructure, her advisors say.
Clinton will argue as the campaign heats up that Wall Street in particular is failing the middle class by not keeping its focus on those investments that help generate jobs and upward mobility within companies. Economists who worked on the plan say she will target “excessive risk taking” and churning of investments, as well as what Democrats argue are loopholes in the tax code that reward such behavior.
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