Re: OT--Crisis Gives Obama a Chance to Make Long-Term Electoral Gains

On Feb 28, 3:34 am, Leonard Ziegler <leonard.zieg...@xxxxxxxxx> wrote:
The $2 trillion of federal spending President Barack Obama proposed to
stimulate the economy, stabilize housing markets, curb financial
excesses and remake the health care system packs a political punch
too.

By shifting the focus of government policy away from upper- income
Americans and targeting the vast numbers who consider themselves
middle-class, Obama’s proposals may yield dividends for the Democratic
Party.

Just as Franklin Roosevelt used the New Deal to create a loyal voter
base that endured for four decades, Obama’s approach to fixing the
economy offers the president an opportunity to recast political
allegiances among swing voters. It also unwinds the policies of Ronald
Reagan by dramatically increasing the role that government plays in
the lives of voters and companies.

“It’s clear that Obama benefits politically by targeting programs
precisely at these voters,” said Bruce Buchanan, a presidential
scholar at the University of Texas in Austin. “It all ties up into a
little ball, and I can understand why Republicans are worried.”

The president’s strategy for boosting growth is a clear departure from
his predecessor, George W. Bush, whose policies gave the greatest
increases in after-tax income to people at the top end of the
distribution.

“Bush’s argument was that they’re the engines of prosperity, they’ll
invest and create jobs, and prosperity will trickle down,” said
Roberton Williams, an analyst at the Tax Policy Center in Washington.
Median income for U.S. households fell to $50,233 in 2007 from $50,557
seven years earlier, adjusted for inflation, according to the U.S.
Census Bureau.

Delivering Tax Breaks

Obama has made shifting the tax burden from the middle class to the
wealthy central to his economic plan. His campaign proposals would
provide the largest immediate breaks to Americans in the third and
fourth income quintiles, or those with incomes between $38,000 and
$112,000, while pushing average taxes up for those earning more than
$225,000, according to an analysis by the Tax Policy Center. Those
making more than $600,000 would see substantially higher taxes.

Obama’s first budget outline, put forth yesterday, proposed almost $1
trillion in higher taxes on the 2.6 million highest- earning
Americans, Wall Street financiers, U.S.-based multinational
corporations, and oil companies to pay for permanent tax breaks for
lower earners.

New Democratic Voters

Obama lost voters making between $50,000 and $75,000 by one percentage
point to Republican candidate John McCain, and he won those making
$75,000 to $100,000 by just three percentage points, according to CNN
exit polls. The two groups account for roughly a third of the
electorate.

In addition, the $787 billion stimulus plan enacted earlier this month
provides new funding for Medicaid, food stamps and similar programs
for low-income Americans, a traditional Democratic constituency, along
with $140 billion to help states avoid layoffs. Since the recession
began in December 2007, 38 states have announced workforce cuts,
according to the Center on Budget and Policy Priorities in
Washington.

Money to states is a lifeline to middle-class employees on state and
municipal payrolls, analysts say. A police officer married to a senior
teacher in a school system is a typical household that will see
tangible benefits, said Robert Reischauer, president of the Urban
Institute in Washington.

Households earning between $66,000 and $112,000 would see their taxes
drop, on average, by almost $1,300 if all of Obama’s tax plans are
enacted, according to the Tax Policy Center.

Housing Relief

At least seven million homeowners will be eligible for assistance from
Obama’s housing stability plan, estimates Susan Wachter, a professor
of real estate at the University of Pennsylvania’s Wharton School in
Philadelphia.

“These borrowers look like middle-income America,” said Wachter. In
addition, they’re geographically concentrated in what she calls the
“sand states” of Nevada, Arizona, Florida and California.

Other states with soaring mortgage delinquency rates include Indiana,
with 9.31 percent of loans delinquent in the third quarter of 2008,
the most recent with available data, and Ohio, with 8.31 percent
delinquent. Together with Florida, where the rate is 9.11 percent,
those states were crucial to swinging the election to Obama.

“They want these voters to be very cognizant of the fact that the
Obama administration in Washington is looking out for them,” said Ruy
Teixeira, an expert on political demography at the Brookings
Institution in Washington.

‘Big Headway’

“Look within any of those states and you see typically that Democrats
are making big headway in bigger and more dynamic metropolitan areas
and their suburbs, and Republican areas are shrinking,” he said.

Extending health care to the 46 million Americans who lack it may be
the ultimate political weapon, analysts say.

“Universal health care is a concrete benefit that would be seen as a
Democratic program and could have effects well beyond Obama’s
presidency,” said Julian Zelizer, a presidential historian at
Princeton University in New Jersey.

Obama’s budget proposes spending $634 billion to expand U.S. health
care, financed by increased taxes on wealthy Americans and less
government money for some drugmakers and health insurers like
UnitedHealth Group Inc. and Humana Inc.

Accomplishing universal coverage, which would help primarily middle-
and low-income workers who struggle with the rising costs of
insurance, could accelerate the return of white working class voters
to the Democratic Party. Once a reliable constituency, those voters
began siding with Republicans in the 1970s and 1980s due to cultural
issues like crime, race, abortion and religion.

Job Losses

They’ve begun to drift back to the Democrats in recent elections as
stagnant wages and disappearing manufacturing jobs began to trump
other concerns. Nearly one in five U.S. manufacturing jobs has
disappeared since 2001, according to the Department of Labor.

Republicans won the group by only 10 points in the 2006 congressional
elections, down from a 20-point margin in 2004. Obama lost the group
by 18 points in 2008, a five-point improvement over John Kerry, the
Democratic presidential nominee in 2004.

The Republican Party would like to reverse that trend, but at the
moment it’s divided over how to do so, and Republican thinkers are
expressing surprise at the ambitiousness of Obama’s agenda.

“There’s a rekindled boldness in the recent proposals,” said John
Fortier, a scholar at the conservative American Enterprise Institute
in Washington. He said his party may have to wait “until the downsides
of these programs become more evident for a chance to make a better
case against them.”

2010 Deadline

A lasting voter realignment is no sure thing. There have been only two
since 1932, according to Curtis Gans, director of the Center for Study
of the American Electorate. He estimates that Obama has until mid-2010
to show some tangible results before voters sour on him.

Obama’s programs have a potential similar to Roosevelt’s New Deal to
deliver for Democrats, said William Leuchtenburg, a history professor
at the University of North Carolina in Chapel Hill and author of
“Franklin D. Roosevelt and the New Deal.”

“Over time the benefits of the 1935 Social Security Act became part of
a program very much associated with the Democratic Party, and in
elections to come was a very important mainstay for the Democrats,”
said Leuchtenburg.

Obama’s plans won’t appeal to hard-working, middle-class voters, said
Representative Mike Pence of Indiana, who is chairman of the House
Republican Conference. Republicans will advocate “the kinds of
policies that are going to create jobs and opportunities in a fiscally
responsible way,” including middle-class tax relief and fiscal
discipline, he said.

“The question is whether those principles have relevance to the
majority of Americans being hurt by this crisis,” said Gans. “Right
now the Republican cupboard is pretty bare.”

by Matthew Benjamin


I suspect this Matt cat has his statistics straight, but his slant is
all wrong. He's obsessed with electoral advantage, and never
discusses whether the changes would be good for the country long term.

:-)

Jenny

.

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