The Doable Dozen: Whether or Not the Democrats Have a Big Idea, They-And Some Republicans, Too!-Have a Slew of Very Good Small Ones. Here's an Unscientific List of 12 That Don't Ask for the Moon but Deserve to See the Light of Day
NATIONAL HEALTH CARE? DEMOLITION AND RECONSTRUCTION of the tax code? A comprehensive war on poverty? Well, maybe not--yet. But if the pollsters are right and Election 2006 proves to be a dark day for the right and a bright dawn for the left, there's plenty that a renewed progressive majority could enact immediately. Herewith are a dozen doable ideas, most of them languishing in Congress right now, many of them poised to tip onto the floor and into the lawbooks if a more liberal leadership began scheduling votes.
(1) Watch Your Assets The Problem: Income inequality The Solution(s): Savings accounts at birth, mandated 401(k)s
SOCIAL SECURITY PRIVATIZATION IS DEAD, AND rightly so, but the general idea of using public policy to broaden the ownership of assets is still a good idea and, if done right, could help keep a lid on America's burgeoning income inequality and comically low savings rate. The ASPIRE Act, a modification of Tony Blair's "baby bonds" idea developed at the New America Foundation, focuses on the former issue. Somewhat different versions of the legislation have been introduced in the House and Senate, but both involve creating savings accounts in which every child will receive a $500 starter deposit from the government, with children from below-median-income households eligible for additional government contributions of up to $500. After turning 18, the account holder would be able to use the money to pay for college, buy a home, or invest in retirement funds. The Senate version of the bill, sponsored by Democrat Chuck Schumer of New York and Republican Jim DeMint of South Carolina, allows for additional contributions of up to $1,000 per year and up to a $500 match from the government, with the match phasing out at between 100 percent and 105 percent of median income. The House version, sponsored by Harold Ford, Patrick Kennedy, and Phil English is more generous, allowing $2,000 in additional contributions with matches up to $1,000 and a phaseout at between 100 and 200 percent of median income.
Both versions of the proposal are quite modest compared with the scale of asset inequality in America, which is much larger than our very large level of income inequality. Nonetheless, if the framework can be put in place, future Congresses might expand upon the baseline.
An even simpler idea, now being pushed by economists William Gale, Jonathan Gruber, and Peter Orszag under the auspices of the Brookings Institution's Hamilton Project, takes aim at the national savings rate. Under current law, enrolling in an IRA or 401(k) plan requires positive action on an individual's part, action that people frequently don't take either out of inertia or because they find the choices confusing. Research indicates that forcing all firms to automatically enroll their employees in either a defined benefit plan, a 401(k), or an IRA and then letting individuals opt out if they don't want to save could dramatically increase participation rates. Gale, Gruber, and Orszag also propose tackling the inequality issue by changing the tax treatment of IRAs and 401(k)s that currently offer much larger benefits to high earners than to working- and middle-class people. They propose replacing the tax preferences enjoyed by those accounts with a 30-percent match from the government for all qualified contributions to level the playing field. More ambitious variants of this idea have also been floated, featuring more generous matches for middle- and working-class people to create genuinely universal, mandatory portable 401(k)-type plans for all Americans.
(2) Witness Protection The Problem: Indefinite detentions The Solution: Amend an old law, newly applied
CHANCES ARE YOU'VE NEVER HEARD OF A 1984 MATERIAL-WITNESS LAW that allows the government to lock up individuals who may know things concerning criminal proceedings but--for whatever reason--have refused to testify. …