REICH: Washington needs a bold solution for middle-class
TEXT OF COMMENTARY
Kai Ryssdal: The Senate said yes to the the tax cut deal today, the one that extends the Bush tax cuts and unemployment benefits. President Obama wants the House to pass the thing and get it to his desk pronto.
Not so fast, says commentator Robert Reich.
: Rarely in American history has the disconnect been bigger between what Washington is doing and what average Americans are worried about. Washington is on the verge of extending the Bush tax cuts and reducing the estate tax -- both big windfalls for the wealthy.
But most Americans are worried sick about their jobs and wages, and these measures won't help. The rich spend a smaller proportion of their incomes than everyone else. That's what it means to be rich -- you already have most of what you want.
The White House points to some middle-class tax benefits also in its pending deal with Republicans. But they're peanuts relative to the scale of the worst economic crisis since the Great Depression.
Yes, corporate profits are up, and Wall Street is back to big bonuses. But nothing is trickling down.
If job growth continues at October's snail's pace, employment won't be back to pre-recession levels for another 20 years. Meanwhile, the value of most American's major asset -- their homes -- continues to drop. This economy won't rebound until average Americans are doing better.
We need a new WPA to put the unemployed back to work. And an infrastructure bank to create jobs repairing the nation's crumbling roads, bridges, and water and sewer systems. Exempt the first $20,000 of income from payroll taxes, and apply payroll taxes to incomes more than $250,000. Extend the Earned Income Tax Credit wage subsidy all the way up through the middle class.
Pay for this by raising marginal income taxes on millionaires. Under President Dwight Eisenhower, the top marginal rate was 91 percent. I'm not advocating this, but a millionaire marginal tax of even 70 percent would also go a long way toward reducing the nation's future budget deficit.
But we're heading in the opposite direction. At a time when the nation's job emergency cries out for bold solutions, Washington is giving us a variation on the same failed trickle-down economics we've had for three decades.
Ryssdal: Robert Reich was secretary of labor for President Clinton. His most recent book is called "Aftershock: The Next Economy and America's Future." Next week it's David Frum's turn. Your turn to talk back is, any time you want to.