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Cedar Rapids, IA – Today, Hillary Clinton laid out a plan to restore America’s middle class. After six and a half years of Bush administration policies, the middle class is struggling to succeed in an economy that is leaving more and more Americans behind.
Income inequality has risen to the highest levels since 1929, and wages have stagnated. In the meantime, health care premiums and college tuitions have skyrocketed, squeezing middle class families who have largely relied on their home equity to make ends meet. The burgeoning problems in the housing market further threaten many middle class families.
Understanding that a vibrant middle class is essential to America’s prosperity, Hillary vowed to implement a broad set of policies to once again restore opportunity for all Americans.
“I believe that middle class is the backbone of our economy, the key to real growth, and the guarantor of the American Dream. America is only as strong as our middle class. And so I judge the health of our economy by asking whether our middle class is expanding and getting ahead. This Administration has failed that test. Mine will not,” Clinton said.
“Today, I propose a new economic blueprint for the twenty-first century economy, a plan to create the new, good jobs essential to broad-based prosperity; to restore fairness to our economy; to renew the basic bargain that if you work hard, you can get ahead; and to put our fiscal house in order again.
“The secret to America’s past economic success is clear: Whenever the economy changed, we changed with it – and mastered it. We innovated. We invested in our people. We managed downturns – and overcame them. We generated wealth – and made sure it was shared.
“We have to change our economic course just as we have to change course in Iraq, and change course when it comes to health care. When it comes to the economy, I believe I have the strength and experience to make that change -- and make our economy work again for our middle class and for all our people.”
Hillary’s economic blueprint to restore the American middle class includes:
* Harnessing innovation to create the high-wage jobs of the 21st Century
* Creating a $50 billion Strategic Energy Fund to jumpstart research and development of alternative energies
* Strengthening unions and ensuring our trade laws work for all Americans
* Providing quality, affordable health care to every American
* Making college accessible and affordable
* Confronting the growing problems in the housing market
* Bolstering retirement security by promoting savings and investment
* Returning to fiscal responsibility and moving towards balanced budgets
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HILLARY’S PLAN TO REBUILD
THE ROAD TO THE MIDDLE CLASS
The Challenges:
Income inequality is rising. In 2005, all income gains went to the top 10% of households, while the bottom 90% saw their incomes decline. The wealthiest 1% held 22% of America’s income – as compared to only 9% in 1970 – the highest level since 1929.
It is increasingly hard for middle class families to make ends meet. While the typical household’s income is $1,000 lower today than it was in 2000, college costs have risen 40%, health care premiums have nearly doubled, and gas prices have doubled as well.
The impact of globalization. Since 2001, the trade deficit has doubled, and the Economic Policy Institute estimates that we have lost 1.8 million manufacturing jobs to China. Anxiety about foreign competition is no longer limited to the manufacturing sector. American workers in service industries are increasingly competing against low-wage counterparts around the world.
The Bush administration’s lack of fiscal discipline is burdening today’s middle class and future generations. Reckless tax cuts for the rich, and a war costing upwards of $300 million a day, have contributed to the national debt rising to over $9 trillion. Every baby born today starts life with $30,000 of our national debt on her shoulders—the largest birth tax in our history.
Weakness in the housing market is hurting families. Rising house prices had allowed families to draw on the equity in their homes to pay bills and put their children through college. But with home prices weakening, that is increasingly difficult to do. Some experts now estimate that house price weakness could erase $3 trillion in household wealth. Additionally, too many families are losing their homes as their mortgage rates reset upwards. There have been more than 1.3 million foreclosure filings so far this year. Also, economists are now concerned that the problems in housing could spillover and hurt the broader economy.
Rebuilding the Road to the Middle Class:
As President, Hillary will:
<1> Harness the power of innovation to create high wage jobs of the 21st Century. Investments in alternative energy can create new jobs for the 21st century; expanded access to broadband will bring opportunities to underserved and disadvantaged communities; the manufacturing base can be re-energized through creative partnerships; and increased government support for research will stimulate the development of new technologies and life-saving medicines. Hillary will restore integrity to science policy, reversing Bush administration policies that are holding our nation back.
Hillary will create a $50 billion Strategic Energy Fund to finance an energy research agency that gathers the best minds from academia, the private sector, and government to devise ways to make the United States energy independent and reduce the threat of global warming. Oil companies would have the choice of either investing in alternative energy or contributing a portion of their earnings into the Fund. The Fund would also provide tax incentives for homeowners and businesses to make their houses and offices more energy efficient; provide gas station owners a tax credit for installing E85 (ethanol) pumps; provide loan guarantees for the commercialization of cellulosic biofuels; and provide incentives for the development of new technologies that contribute to a cleaner environment. By investing in alternative energy, we can create hundreds of thousands of well-paying new jobs in the United States.
<2> Empower our workers and ensure that all Americans contribute their fair share. Hillary will ensure that unions, which have played an important role in forming and sustaining the middle class, are strong. She will also ensure that trade policies work for average Americans. Trade policy must raise our standard of living, and they must have strong protections for workers and the environment. Hillary will:
* Pass the Employee Free Choice Act so that unions can organize for fair wages and safe working conditions.
* Appoint a trade enforcement officer within the office of the United States Trade Representative (USTR) and double the size of USTR’s enforcement unit. The Bush administration has been extremely lax about enforcing our trade agreements, and workers are suffering as a consequence. Hillary will appoint a trade enforcement officer within USTR who will be responsible for ensuring that our trade agreements are vigorously enforced. She will also double the size of the enforcement unit. The current staff is too small to monitor and enforce the increasingly complex agreements.
* Overhaul the Trade Adjustment Assistance (TAA) program to ensure that workers who have lost jobs because of global competition get the support they need. TAA provides job training, income support, a health care tax credit, and job placement assistance. Hillary will modernize the program to ensure that it is truly helping workers hurt by global trade. First, she will extend TAA benefits to service workers. Today, workers who produce a service rather than a product are ineligible for TAA, leaving everyone from call-center operators to radiologists, without assistance. Second, Hillary will broaden TAA to cover all workers whose plants have moved abroad. Workers are currently ineligible for TAA if their plants relocated to countries with which we have not signed free trade or trade preferences agreements. This outdated rule means that when plants shift from America to low-wage countries like India and China, laid-off workers are ineligible for TAA. Third, Hillary will double funding for TAA’s job training program to $440 million. And fourth, she will overhaul the Health Coverage Tax Credit (HCTC) to ensure that it is actually making health care affordable for laid-off workers. She will increase tax credit to 90% of premiums from the current 65%. And for laid-off workers without access to COBRA or a qualified state plan, she will make other options, she will allow them to use the HCTC to buy into the Federal Employees Health Benefit Plan (FEHBP).
* Restore fairness to the tax system. Hillary will return to the income tax rates for upper-income Americans that we had in the 1990s – rates that were consistent with a balanced budget and economic growth. She will level the playing field when it comes to taxing the income earned in investment partnerships. Right now, some Wall Street investment managers making $50 million a year could pay just 15% on their earned income – while someone making $50,000 a year pays 25%. That is simply wrong, and Hillary will change it. In addition, Hillary will extend middle class tax relief, the child tax credit and marriage penalty relief, and reform the AMT to ensure people don’t face stealth tax increases.
<3> Restore the basic bargain. Hillary will restore the basic bargain that if Americans work hard and take responsibility, government will do its part to make sure they have the tools to get ahead. Hillary will:
* Make college affordable. On Thursday, Hillary will detail a plan for making college affordable for all Americans. Her plan will include modernizing the HOPE Scholarship Program that provides tax credits to help young people attend college. As President, Hillary will also provide more support for community colleges and institutions that prepare people for good jobs.
* Ensure that every American has quality, affordable health care. Hillary has a plan to ensure that every American has quality, affordable health care. If you have a plan you like, you keep it. If you don’t have insurance – or don’t like the insurance you have – you can choose from the same menu of private plans available to members of Congress, or you can opt into a public plan option like Medicare. Tax credits will be available to make health care affordable. Your coverage will be guaranteed – even if you lose your job. Even if you decide to start your own business or stay home with the kids for a few years. And you’ll never be denied coverage because of pre-existing conditions or risk factors because Hillary will ban insurance company discrimination. Hillary’s plan also provides tax credits to help small businesses. Hillary will help them create new jobs with good health care benefits as well.
* Confront the growing problems in the housing market. Hillary has laid out plans to address the problems in subprime mortgages; crack down on unscrupulous brokers; curb mortgage lending abuses; assist families facing foreclosure; and expand affordable housing options. Homeownership is a fundamental part of the American dream, and Hillary is committed to helping families preserve and realize it. Home price declines, and mortgage rates resetting, makes it critical that additional steps be taken to help families replace unworkable mortgages. Today, Hillary announced new proposals:
o Implement the “Save Our Homes” program. The Save Our Homes program would temporarily use Fannie Mae, Freddie Mac, and the state housing finance agencies to help reduce foreclosures. The program would be in effect for 2 years. First, Hillary will temporarily increase Fannie Mae and Freddie Mac’s portfolio caps by 5% to give the companies approximately $70 billion in incremental mortgage purchasing capacity. With the caps lifted, the two companies will be directed to work with state housing agencies and private lenders to help at-risk homeowners replace their unworkable mortgages (mostly adjustable rate mortgages) with stable, fixed-rate loans. For example, the companies would help lenders and state agencies set responsible underwriting standards for the new loans; and the companies would also purchase some of these loans for their portfolios.
Second, Hillary will temporarily modify the Mortgage Revenue Bond (MRB) program to help families refinance unworkable mortgages. Under the MRB, state housing finance agencies use the proceeds of tax-exempt bond issuances to provide low-cost mortgages to low- and moderate-income families. Hillary will modify the MRB program in two ways to address the foreclosure crisis: First, state agencies will be permitted to use MRBs to refinance mortgages (under current law, MRB funds can only be used for original mortgages). And second, Hillary will increase the federal cap on the MRB program by roughly 25% to provide an additional $2.5 billion in refinancing capacity. Empowering the state housing agencies to refinance unworkable mortgages would enable them to help low- and moderate income people replace resetting ARMs with stable, fixed-rate loans.
o Implement the “Realizing the Dream” Program. The goal of this program is to ensure that responsible borrowers have access to mortgage credit. At present, banks are reluctant to write new mortgages, and they are especially reluctant to write mortgages that exceed the loan size ($417,000) that Fannie and Freddie purchase. To increase mortgage credit availability, Hillary will temporarily introduce a separate GSE loan limit for high cost areas. The loan limit will be indexed to median area home prices and capped at $650,000. Hillary will also direct Fannie and Freddie to make immediate use of their increased purchasing capacity to add liquidity to the mortgage markets. These actions would be immediately beneficial to credit-worthy middle class families who live in high cost areas and now have difficulty obtaining reasonably priced mortgages.
o The Foreclosure Rescue Fraud Act. An increasing number of people are seeking the aid of “foreclosure consultants” to help them avoid losing their homes. While some of these consultants are legitimate professionals, others are con-artists taking advantage of distressed homeowners. The fraudulent consultants take money from homeowners without providing any actual service, manipulate homeowners into transferring their property deeds to them, or strip the equity from people’s houses. Hillary will pass legislation that sets national, minimal standards of conduct for foreclosure consultants. The legislation would impose criminal penalties on violators, and allows victims to sue for damages. The law would also make $100 million available to states for prosecuting foreclosure rescue fraud and assisting homeowners who have been conned by foreclosure consultants.
* Improve retirement security. Right now, too many American families simply aren’t prepared for retirement. Fewer than half have retirement savings accounts. Nearly a third of households entering retirement do not have enough savings to replace even half of their income when they retire – and that’s including Social Security. Half have just $15,000 or less in a 401(k) or IRA type plan. On Tuesday, Hillary will announce a plan to help families save, invest, and build wealth for retirement.
<4> Return to fiscal responsibility. After six and a half year of President Bush’s fiscal irresponsibility, Hillary wants America to regain control of its destiny. She will move back toward a balanced budget and surpluses. Hillary believes that we should develop a set of budget rules similar to those we had in the 90s which required us to fund new expenditures with new revenues or cuts in other areas.
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* Statement by Hillary Clinton on the Anniversary of the late Supreme Court Justice Thurgood Marshall's Appointment to the U.S. Supreme Court 10/2/2007
* Leadership Committee of SC Women for Hillary Announced As Organization Begins Grassroots Drive 10/2/2007
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