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The Democratic Party’s new pitch to voters takes aim at sky-high economic and political inequality — arguing it should be eradicated by ramping up government oversight of big businesses, breaking up corporate trusts, and implementing major new federal spending programs to boost infrastructure and wages.
Betting it’s the message voters will want to hear ahead of the 2018 midterm elections, Democrats is releasing a suite of these proposals, collectively called “A Better Deal,” on Monday. They say the Better Deal — an obvious allusion to Teddy Roosevelt’s Square Deal and Franklin Roosevelt’s New Deal — is necessary to “crack down on monopolies and the concentration of economic power” against a government that “benefits the special interests and very wealthy.”
The plan is a populist turn for the party, less than a year after it ran — and lost to Donald Trump — on a platform that largely defended the economic status quo under President Barack Obama.
The Better Deal’s first step is a plan to create 10 million jobs through a mixture of tax credits for employers who hire at high wages, and a national infrastructure program similar to the one Hillary Clinton proposed in the presidential campaign.
Democrats are prepared to argue that despite relatively low unemployment numbers, the plan is needed to address the millions of Americans who are still looking for work unsuccessfully, or who are working part time when they want to work full time.
The second main plank released on Monday is a sweeping suite of plans aimed at curtailing the skyrocketing costs of American prescription drugs, including a new regulatory agency and broad new oversight powers. Over the past few years, press reports have increasingly highlighted a handful of pharmaceutical companies that exponentially jack up the prices of drugs that consumers have no choice but to buy.
The third plank is a list of antitrust proposals in line with what Sen. Elizabeth Warren (D-MA) has called for the party to adopt. Facing rising corporate inequality and markets increasingly dominated by a tiny handful of firms, Democrats will propose a new federal office and federal guidelines that would aim to make it more difficult for companies to merge and easier for federal regulators to call attention to their “anticompetitive” behavior.
It’s a populist turn, but not a full Sanders-style one
Not everyone will be thrilled with this strategy. Centrists in the party may worry that this tactic risks making Democrats look like far-left ideologues, and argue that the party lost last fall because its leader was already seen as too far to the left for most voters.
And those closer to the Bernie Sanders (I-VT) wing of the party will charge that Democrats have still done little to shake their ties to elite donors and should much more firmly embrace universal programs, like a single-payer health care model and free college tuition for all.
Still, the outlines of “A Better Deal” at least suggest that the progressive left’s political thinking may be making inroads in Democratic circles.
The plans figure to be dead on arrival with the Republican Congress. The proposals haven’t been turned into legislative text yet, so nobody knows exactly how many Democratic senators will wind up supporting these agenda items.
But a senior aide said that “literally every single” member of the Democratic caucus gave their input in the planning process, and that the caucus will support “the vast majority of what will be in it when all is said and done.”
Aides promised similar policy initiatives would be unveiled as part of the push in the following weeks and months. In addition to the drug pricing proposal, the jobs plan, and the antitrust blueprint, Democrats say they’ll release policies to crack down on “unfair foreign trade,” reduce the cost of college tuition, and drive down families’ child care and credit card expenses.
Here are the three first planks in Democrats’ Better Deal, explained:
1) Break up consolidated corporate power
In 1998, while Bill Clinton was still president, federal regulators allowed two of the biggest oil companies to merge and create one giant conglomerate called Exxon Mobil.
Almost 20 years later, the new leader of the Democratic Party believes that Clinton made a huge mistake. "How the heck did we let Exxon and Mobil merge?" Chuck Schumer said on ABC’s This Week on Sunday. “That was Democrats."
In blasting his own party, Schumer was teasing one key part of Democrats’ Better Deal agenda — a promise to reverse the decades-long rise of market consolidation in the hands of a few giant companies. The Better Deal agenda laments corporate consolidation across the beer industry, the airline industry, eyeglasses firms, and the telecom giants. “It’s almost like global warming: You can just look out and say, ‘The economy is way more concentrated,’ for almost any given thing,” Columbia professor Tim Wu, a former senior adviser to the Federal Trade Commission, told Vox’s Ezra Klein in December 2016.
The Better Deal agenda takes several swings at reversing this trend. The first is through new federal merger standards that would put the onus on corporations to prove that their merger wouldn’t make the economy less competitive, rather than on the government to show why it would.
“Under our new standards, companies proposing the largest mergers would be presumed to be anticompetitive and would be blocked unless the merging firms could establish the benefits of the deal,” the statement says.
Another is a new federal “Trust Buster” agency. Similar in scope to the Consumer Financial Protection Bureau created by the Dodd-Frank law, this new post would give a federal "advocate” the power to recommend criminal investigations of anticompetitive conduct to the Department of Justice. (Though unlike the CFPB, the proposal doesn’t say this new trust-busting advocate would have the power to levy fines against bad actors.)
Finally, the plan proposes to force regulators to review corporate mergers, rather than just have the option of conducting the review, as well as powers for regulators “to take corrective measures if they find abusive monopolistic conditions.”
2) Crack down on prescription drug pricing
The second big plank in A Better Deal is a suite of policy proposals intended to stop the skyrocketing costs of America’s prescription drugs. As Vox’s Sarah Kliff has documented, the US is virtually alone in not regulating or negotiating drug prices when they come onto the market.
“We have seen hedge funds and other speculative Wall Street financial firms take stakes in drug companies and then force major price increases on life-saving drugs,” the Better Deal plan says. “We will crack down on the companies that excessively raise prices on American customers without justification."
Democrats say they’d rectify this first by allowing Medicare Part D to negotiate prices with drug manufacturers — a proposal Trump supported on the campaign trail but that has gone nowhere in Congress amid Republicans’ attempted Obamacare repeal push. (Though in 2007, the Congressional Budget Office found that the savings from allowing Medicare Part D to negotiate prices would be negligible.)
Democrats would also create a “‘price gouging’ enforcer” to oversee a new federal agency devoted to driving down drug prices. This “enforcer” would be able to fine drug manufacturers that have “unconscionable” price hikes, though the exact mechanism for leveling the fines isn’t made clear in the early proposal.
Finally, Democrats are calling for new legislation to force drug manufacturers to explain why they’re hiking drug prices. Under the proposal, for instance, a manufacturer would have to justify a price hike to the Department of Health and Human Services in order to raise the price of a drug by at least 300 percent over five years or 100 percent over one year.
Not included in the initial text of the Better Deal is a proposal to legalize drug importation from Canada — an idea that Trump supported on the campaign trail. (Several Senate Democrats voted against a proposal to legalize drug importation from Canada this February.)
3) 10 million new jobs through infrastructure spending, tax credits
The plan outlines several key ways to create those jobs — a massive infrastructure program, expanded apprenticeship programs, new tax credits, and expanded training and technical programs at community colleges.
In some ways, the plan is broadly similar to Hillary Clinton’s blueprint from the presidential campaign, which similarly vowed to invest $275 billion in infrastructure and expanding training programs.
The biggest change is that this new proposal includes new tax credits meant to boost training and wages. “We propose a new tax credit for employers that train and hire workers and employ them at a good wage,” the proposal notes, without identifying a specific amount that would be invested. “The credit could only be used to defray the costs of new investments, above what the business already spends on training.”
Clinton’s campaign also said her 100-day jobs plan would create 10 million jobs, a number she frequently contrasted with estimates that Trump’s plan would cost the American economy 3.4 million jobs. But Democrats are hoping their new jobs promise doesn’t end up in the garbage can like Clinton’s did.
“When you lose an election with someone who has, say, 40 percent popularity, you look in the mirror and say: ‘What did we do wrong?’” Schumer told ABC on Sunday. “And the No. 1 thing that we did wrong is we didn’t tell people what we stood for.”
