Time to rebuild the middle class

No greater challenge faces Congress in the year ahead than to restore the middle class, which is being crushed by widespread unemployment, rising income inequality and a sense that the political system is indifferent to its plight. As a young Iowan told my committee last spring: “We hear that corporate welfare continues, and we look across the kitchen table at our families eating ramen noodles for the third time this week. We read that the wealthy get bigger tax breaks in hopes that their money will trickle down to us, then turn the page and read about how our school districts are forced to cut staff — again.”

To his credit, President Obama has put the fight to create jobs and restore the middle class at the forefront of his agenda, and tonight he will demand urgent action. I couldn’t agree more strongly. As chairman of the Senate Health, Education, Labor and Pensions Committee, I chaired three hearings last year on the plight of the middle class, and my state staff visited all 99 counties in Iowa to gather insights into the challenges facing working Americans. We found that more and more people are struggling just to make ends meet. Their jobs are insecure, their savings and pensions have shrunk, and they are profoundly worried about the future.

Economists have identified globalization and technology change as factors that have contributed to the decline of the middle class. But the fault also lies with misguided policy choices here in Washington, for example, tax breaks that have exacerbated inequality or encouraged corporations to move jobs overseas. It is time to tackle these policy failures head-on, and to do so with the boldness that earlier generations of Americans summoned in times of national challenge. 

The mantra in some quarters is that “government can’t create jobs.” Nonsense. Smart government can create jobs — and short-sighted government can destroy jobs. Since World War II, the federal government has funded and spearheaded the building of the interstate highway system, the invention of the Internet, the exploration of the cosmos. More than 80 Nobel Prizes have been awarded for research sponsored by the National Institutes of Health. These federal initiatives have spawned countless inventions and new industries, creating tens of millions of middle-class jobs. 

Today, the obvious way forward is to ramp up investments in initiatives that make the middle class strong. There is bipartisan support for investments in infrastructure, including 21st century transportation and energy systems. We need smart investments to ensure that our workers have the education, skills and resources they need to win in the global marketplace. We need policies to reverse the long-term decline in manufacturing jobs. And we need to help family budgets go further by helping to make necessities such as child care and college more affordable, improving the retirement system and taking full advantage of reforms in the Affordable Care Act, such as its provision permitting adult children to stay on a parent’s healthcare plan up to the age of 26 and its ban on denial of coverage due to preexisting conditions (which already applies to children and in 2014 will apply to adults). 

Instead of slash-and-burn approaches to deficit reduction, which are being sold through fear and fatalism, we need an approach that reflects the hopes and aspirations of the American people. Smart countries, in difficult times, do not turn a chain saw on themselves through policies of mindless austerity. We need to continue to invest in approaches that will spur economic growth, create quality, family-supporting jobs and strengthen the middle class. The best way to bring deficits under control is to help the 27 million unemployed and underemployed Americans get good jobs and become taxpayers again. 

Instead of failed trickle-down economics for the rich, it’s time for percolate-up economics for the middle class. As we say in the Midwest, you don’t fertilize a tree from the top down, you fertilize the roots. It’s time to invest directly in our nation’s future by modernizing our crumbling infrastructure, encouraging manufacturing and innovation and giving our people the education and skills they need to succeed in the workplace.

There can be no sustainable economic recovery and no return to fiscal balance without the recovery of the middle class. The middle class is the backbone of this country, and it’s time for Congress to have the backbone to not only defend it, but rebuild it.

Harkin is the chairman of the Senate Health, Education, Labor and Pensions Committee.