Whose Side Are Progressives on: The Poor or the Upper Middle Class?

So here's a question: When push comes to shove, which side of the barbell will elected Democrats stick up for?  

 

That's an easy question because we already know the answer, at least at the national level: The upper middle class, of course. This part of the progressive coalition may be smaller than the poor, but it has more political clout by far because of much higher voting rates, campaign contributions, and overall social and civic influence. As Demos argued in our report, Stacked Deck, political power ineluctably tracks with economic resources in today's America -- and that's also true within the progressive coalition. 

 

Just consider the budget priorities of the Obama administration. The President has embraced a fiscal future which envisions a steady decline in real terms of domestic spending on various programs that benefit low-income Americans. Under the administration's proposed budget, non-defense defense discretionary spending will fall to 2.5 percent of GDP in 2023, down from 3.7 percent today -- a draconian shrinking of resources for struggling individuals and communities. 

 

Now think for a moment about the sacrifices that national Democrats have demanded of upper-middle class Americans during these tough fiscal times -- that is, households making between $100k and $250k. Think of the proposed cuts and tax hikes targeting this group. 

 

Okay, give up? Don't feel bad. There's not much that Democrats have asked of these Americans. Obama has explicitly pledged for years that he wouldn't raise taxes on anyone making under $200,000 years. And he hasn't. That pledge has created big fiscal challenges, because there's only so much revenue that can be extracted from wealthier households. For instance, three quarters of the cost of the Bush tax cuts came from cuts to Americans under the $200k threshold, and by agreeing to preserve 80 percent of the Bush tax cuts as part of the fiscal cliff deal, Obama limited future revenues and created intense long-term pressures for budget cuts -- many of which hurt the poor.

 

I'll say that again: choosing to preserve Bush tax cuts for the upper middle class is now translating into Obama spending cuts that hurt the lower class. 

 

This isn't just a revenue issue. It's a fairness issue. The upper middle class benefits handsomely from what Christopher Howard has called the "hidden welfare state." Central to that welfare state are hundreds of billions of dollars in annual tax subsidies for home ownership, employer-provided healthcare, and retirement -- all of which greatly help households in that $100k to $250k range. 

 

But how many Democrats have you heard come out swinging against these fat subsidies? Not many. Certainly the White House never has in any significant way. 

 

The president, along with any number of mainstream Democrats, has accepted a downsizing of the welfare state for poor people. And yet have barely mentioned ideas for shrinking the welfare state for affluent people. For that matter, you don't see many progressive think tanks or pundits going after handouts to the upper middle class either. Progressives are fixated on the rich even as budgetary math shows that huge revenues and savings could come from going after the near-rich -- resources that could be used to defend the poor. 

 

Yes, the deck is stacked against low-income Americans. And not just nationally: also within the progressive coalition.