ECONOMY
A Pro-Growth, Progressive Economic Agenda

Editor's Note: This is the third in our three-part series on "Change for America: A Progressive Blueprint for the 44th President." See part 1 here and part 2 here.

On election day, 60 percent of voters said that the state of the economy is "the most important issue facing the nation." With a resounding progressive victory, the new administration has the opportunity to implement pro-growth, progressive economic policies to get the economy back on track. This week, the Center for American Progress Action Fund, along with the New Democracy Project, released a book called Change for America: A Progressive Blueprint for the 44th President. The book outlines new ideas for governing in the 21st century, and offers suggestions on how to make the economy work for everyone, rather than catering to the richest Americans and largest corporations as has been the policy for the last eight years. In the book, Center for American Progress Action Fund Senior Fellow Gene Sperling explains that "the 44th president must work with both sides of the political spectrum to design policies that boost shared prosperity by strengthening and growing the middle class, not policies that just focus on growth or on equity alone." "Strong and dynamic growth," Sperling writes, "is critical to ensuring the United States always makes room for anyone from anywhere who is willing to work hard and play by the rules without having to force existing groups to settle for less."

MOBILITY AND EQUITY: In their chapter on equality and mobility, Peter Edelman of Georgetown University and Angela Glover Blackwell of PolicyLink ask if America is headed towards a "new gilded age," pointing out that "the American Dream -- that we can all move up the economic ladder -- is far from reality for many people today." Currently, income inequality in the United States is at its highest level since 1928, and only "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," while "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." And U.S. tax policy exacerbates this disparity. "Out of the more than $200 billion in tax incentives offered each year for savings, only about 5 percent goes to the bottom 50 percent of Americans." Edelman and Blackwell write, "The first step is to restore a progressive U.S. tax system in the wake of the Bush administration's tax cuts, which poured hundreds of billions of dollars into the hands of the wealthiest Americans and corporations."  The next step is to ensure that all Americans have both living-wage incomes -- through a minimum wage indexed to inflation -- and adequate savings to fall back on. Finally, the next administration must expand educational opportunities through a national commitment to pre-kindergarten, as well as expansion of after-school and out-of-school programs as well as programs that reach at-risk and disconnected youth.

A GREEN RECOVERY: As CAP Vice President for Economic Policy Michael Ettlinger notes, "No source of jobs is poised to be generated by the unaided private market to replace the jobs lost in home construction, the financial sector, and the other areas dramatically affected by the current recession." Therefore, a set of policies aimed at creating jobs is essential to jumpstarting the economy. In her chapter on global competitiveness and trade, CAP Senior Fellow Laura Tyson argues the next administration should invest in a green recovery, creating jobs while simultaneously moving American towards a low-carbon economy. She writes, "Policies to accelerate the development of clean energy alternatives will help create green-collar jobs and build U.S. competitiveness in what promises to be one of the fastest-growing areas of the world economy over the next half-century." CAP reports that a $100 billion investment over two years in a green recovery program would create 2 million new jobs. "We identified $50 billion in programs that are ready to go immediately," says Bracken Hendricks of CAP. "The package would create 2 million jobs across the skill spectrum, from blue collar to high tech, and in almost every area of the country. There was huge congressional appetite for this even before the economic crisis hit."

LONG-TERM PROGRESSIVE GROWTH: True long-term economic success requires both "a growing middle class and rising living standards." As Ettlinger points out, "The economic weakness of recent years was papered over by personal debt underpinned by artificially high valuation of homes and other assets. ... A lesson to be learned from this period is that economic growth that is not buttressed by growing middle-class incomes is illusory -- a house of cards bound to collapse." Thus, CAP has released a Progressive Growth plan aimed at creating long-term opportunity through green recovery, implementing health care reform and labor law reform, as well as enabling all Americans access to a quality education. Sperling writes that the new economic agenda "must focus on policies that both raise the economic tide and lift all boats -- boosting productivity and our gross national product while fostering the shared prosperity that defines our nation's values." But these efforts must also be "paired with a serious commitment to long-term fiscal discipline" through a willingness to confront ineffective domestic and military spending. Implementing the policies outlined here -- as well as many others -- can lead to an economy that excludes no one, to the benefit of everyone.

Under the Radar

JUSTICE -- NEW DOCUMENTS SHOW IMPROPER CONDUCT, POSSIBLE JURY TAMPERING IN SIEGELMAN CASE:  New documents obtained by Time magazine and provided by Justice Department whistleblower Tamarah Grimes show "extensive and unusual contact between the prosecution and the jury" in the prosecution of former Democratic Alabama governor Don Siegelman. "A key prosecution e-mail describes how jurors repeatedly contacted the government’s legal team," according to Time. Furthermore, Grimes said "a member of the team prosecuting Siegelman had spoken with a juror suspected of improper conduct -- apparently at the time the judge was due to question the juror about that conduct. Grimes quotes the lead prosecutor in the case as saying someone had 'talked to her. She is just scared and afraid she is going to get in trouble.'" The documents also show that a U.S. Attorney who recused herself from the prosecution of  Siegelman continued to be actively involved in the case, e-mailing advice to subordinates who were still involved in the prosecution. The U.S. Attorney, Leura G. Canary, had recused herself from the case because her husband was a "top GOP operative and close associate of Bush adviser Karl Rove," who has been accused of orchestrating a political prosecution of Siegelman.

ECONOMY -- NEW DATA SHOW U.S. CORPORATIONS PAY LOWER TAXES THAN MOST INDUSTRIALIZED NATIONS: Conservatives spent the last year railing against the United States' 35 percent corporate tax rate. What they never mentioned is that this 35 percent corporate rate is so riddled with loopholes and shelters that the United States collects less in corporate taxes as a percentage of GDP than most other industrialized countries. New IRS data show that typical American companies paid only 25.3 percent of their U.S. book income in federal corporate taxes in 2005, despite a statutory corporate tax rate of 35 percent, by using loopholes and shelters. U.S. companies "reported about $1.35 trillion in pretax U.S. book income to their investors in 2005, but about $1.03 trillion to the IRS -- a difference of about 23%." A quick calculation shows that the difference between paying 35 percent on $1.03 trillion in income and $1.35 trillion in income is approximately $112 billion -- enough to finance more than half of the Center for American Progress's ambitious "Green Recovery" plan to jumpstart a clean energy economy. Some differences between book -- and reported -- income are legal and legitimate, but they can also be a sign of sheltering and abuse. Effective tax reform would first broaden the tax base by closing loopholes and eliminating shelters, before considering a lower statutory corporate rate.

ETHICS -- CHAMBLISS CLAIMS HIS 2002 ATTACK AD ON CLELAND WAS 'TRUTHFUL IN EVERY WAY': Earlier this week, Sen. Saxby Chambliss (R-GA) defended an ad he ran against Max Cleland in 2002 that linked Cleland -- a triple amputee Vietnam veteran -- to Saddam Hussein and Osama bin Laden. Chambliss called it "a lightweight ad" and "very fair." Yesterday on MSNBC, host Andrea Mitchell wondered if Chambliss had any regrets about the ad. "You know, Andrea, that ad is truthful in every way," Chambliss said, adding that Cleland "voted against George Bush eleven times on the issue of homeland security." The ad is not truthful. While it claims that Cleland voted against homeland security efforts, in fact, Cleland was voting against a provision in a homeland security measure that would have stripped away the collective bargaining rights of federal employees -- many of whom would form the new Department of Homeland Security (DHS). And Cleland actually co-sponsored legislation that called for the creation of a cabinet-level DHS. Despite having called the Cleland ad "disgraceful" and "reprehensible," Sen. John McCain (R-AZ) campaigned yesterday in Georgia for Chambliss, who is locked in a tight runoff election against Democrat Jim Martin.

Think Fast

CIA Director Michael Hayden said yesterday that al Qaeda remains the greatest threat to the United States. "but Iraq is no longer the central front" in the broader struggle against terrorism. He added that "its leaders are building closer ties to regional militant groups in order to launch attacks in Africa and Europe and on the Arabian Peninsula."

Some Republican governors were not happy about yesterday's Palin-centric press conference, at the Republican Governors Association. "One called it awkward," CNN reports, while another described the event as "odd" and "weird," and said it "unfortunately sent a message that she was the de facto leader of the party."

Yesterday, Rahm Emanuel -- the incoming White House chief of staff -- apologized for his father's remarks against Arabs. Emanuel called Mary Rose Oakar, President of the American-Arab Anti-Discrimination Committee, to apologize on behalf of his family and offered to meet with representatives of the Arab-American community at an appropriate time in the future.

"The number of U.S. workers drawing jobless benefits hit a 25-year high this month." The Labor Department said jobless claims rose "by an unexpectedly steep 32,000 last week to 516,000, the highest since the weeks following the September 11, 2001 attacks." More »

Foreclosures in October rose 25 percent from last year, according to RealtyTrac, meaning "one in every 452 U.S. housing units received a foreclosure filing" last month. Meanwhile, the Federal Deposit Insurance Corp. released a plan to prevent 1.5 million foreclosures by offering financial incentives to companies that agree to sharply reduce monthly payments on mortgage loans.

Democratic congressional leaders appeared to concede yesterday that "they would face potentially insurmountable Republican opposition" to a proposed $25 billion auto industry bailout when they meet for a lame-duck session next week.

PhRMA, the nation's largest pharmaceutical lobbying group, "is preparing a multimillion-dollar public relations campaign to tout the importance of free-market health care and undercut an expected push by the Obama administration for price controls of prescription drugs."

Judge Barbara L. Neilson of Minnesota threw out a lawsuit Thursday against Al Franken by Sen. Norm Coleman (R-MN). Coleman claimed Franken defamed him by calling him the "fourth most corrupt" senator, according to CREW. Franken's reference of CREW was "substantially accurate, if not literally true," according to Nielson.

And finally: The New York Times reports on how life for the Obama family has "changed forever." For example, for the past 14 years, Barack Obama has been going to the same barber at the Hyde Park Hair Salon. "But when he wanted a trim this week, the Secret Service took one look at the shop's large plate-glass windows and the gawking tourists eager for a glimpse of the president-elect and the plan quickly changed. If Mr. Obama could no longer come to the barber, the barber would come to him and cut his hair at a friend's apartment."

Good News

"Ann E. Dunwoody is ascending to a peak never before reached by a woman in the U.S. military: four-star general."

State Watch

PENNSYLVANIA: Former senator Rick Santorums' absentee vote in Penn Hills has been challenged.

FLORIDA: "South Florida governments are gearing up to spend more than $161 million in federal grant money to stimulate the housing market."

MISSOURI: Sworn testimony from three former aides to Gov. Matt Blunt (R) says that nobody enforced state rules for preserving public records.

Blog Watch

THINK PROGRESS: Former D.C. appeals court judge suggests Bush detention policies amount to war crimes.

WONK ROOM: Why no one cares about Rep. Rahm Emanuel's (D-IL) "extremist associations."

TPM MUCKRAKER: Blackwater to be fined amid allegations over shrink-wrapped weapons.

BALKINIZATION: How will President-elect Obama wield presidential power?

Daily Grill

"You try to compare this to interracial marriage. It is not the same thing."
-- Family Research Council's Tony Perkins, 11/12/08, on same-sex marriage

VERSUS

"It's the same as...when blacks and whites were not allowed to marry. This falls into the same category."
-- Gov. Arnold Schwarzenegger (R-CA), 11/9/08, on same-sex marriage