Reid Cramer: All Publications, Events and Press

The Assets Agenda

Asset Building — Mon, 30 Jun 2008 01:50:00 -0400

The current economic downturn, triggered in part by excessive household debt and deflating housing prices, underscores the central role asset ownership plays in the economic security of American families and the broader economy. Broad asset ownership, whether through savings or investment, has the potential to connect economic opportunity with economic security and ensure that every member of society is afforded a real stake in the commonwealth. Assets are important not only because they can be deployed productively or tapped to help individuals and families weather unexpected events, but because they have behavioral effects that can change the manner in which people think about and plan for the future.

Past… more

529 College Savings Plans

Asset Building — Thu, 01 May 2008 06:25:00 -0400

Don't Spend Your Tax Rebate!

Ron Tang — Tue, 15 Apr 2008 04:41:00 -0400

The IRS was so confident in the legendary observation of Oliver Wendell Holmes, Jr. that “taxes are the price we pay for a civilized society” they chiseled it above the entrance to their Washington D.C. headquarters. Still each year Tax Day makes incumbent politicians uneasy -- especially at times when recession fears mount and fall elections loom. This year this perilous combination spurred them on to take prompt and bipartisan action. Who wants to be accused of sending families their tax bill as economic growth slows and hardship spreads?

The bipartisan prescription to jumpstart the economy was to deliver over $100… more

The Assets Report 2008

Asset Building — Wed, 12 Mar 2008 03:03:00 -0400

The purpose of this annual report is to summarize and take stock of the current state of federal policy through an asset-building lens, especially as it affects the asset base of families with lower incomes and fewer resources, which is the focus of our work. The report is divided into three sections. The first is a review of policy developments from the past year related to asset building, highlighting administration action and significant legislation, including assets-related bills introduced in the first year of the 110th Congress; the second is an examination of the President’s budget proposals for Fiscal Year… more

New America Foundation Releases New Report on Public Opinion and Political Culture

Communications — Fri, 29 Feb 2008 17:09:00 -0500

Today the New America Foundation's Next Social Contract Initiative and Pollster Cliff Zukin released new findings on how public opinion shapes national values and informs the potential for policy reform, particularly in the areas of health care, education, taxes and economic security. The new report, entitled "The American Public and the Next Social Contract: Public Opinion and Political Culture in 2007," is available here.

"The report notes that there is an increasing acceptance of the need for mutual support and an active role for government, coupled with continuedfield.These tensions shed light on the perpetual interplay between the enduring American… more

"Future of American Politics" Event on C-SPAN

Communications — Fri, 29 Feb 2008 15:20:00 -0500

New America in the News:

The first panel spoke on the changing political culture in the United States and how it will affect the next social contract. Panelists focused on the growing demand for post-partisanship, teamwork, and tolerance among younger voters. The second panel discussed political institutions and elections, including the past political era, which began in 1978, and the possible shape of the new political era that panelists believe is beginning. The third panel discussed possible policies in the next political era? Some topics were broadening asset ownership, modernizing the tax system, and workplace flexibility. The final panel spoke on political parties in the next political era. They discussed how each party is struggling to build a new majority coalition and the growing popularity of the Democratic Party, particularly among young people. Following each panel panelists answered questions from members of the audience. For the video, visit the C-SPAN Event Page.

The Next Era of American Politics

Communications — Fri, 29 Feb 2008 11:00:00 -0500

A New America Event
02/29/2008 - 11:00am

Phillip Longman began by framing the core question of the event: are we in a transformative political moment, and what would that mean? Even after a decade of debilitating partisanship, Rovian strategists and Netroots bloggers continue to exacerbate political polarization. Yet, with the likely nominations of John McCain and Barack Obama, observers of all political stripes have sensed the prospect of a political sea-change. Whether it is a government unified around a bold progressive majority, a resurgent and transmuted conservatism, or some kind of “post-partisanship,” the possibility of a new political era in America is very real. Nonetheless, the data show that partisan identification and ideological polarization are as prevalent as ever.

Longman attempted to unravel this knot by tracing the career of that unusual phrase, “post-partisan.” In the 1980s it described an effort to overhaul entitlements, in the 1990s it adopted a cool and detached air from political observers such as JFK, Jr., and in the 2000s it represented the desire of centrist politicians such as Michael Bloomberg and Arnold Schwarzenegger to pursue innovative policy ideas. Now, post-partisanship may reflect a new approach to politics by the “Millenial” generation, who value respect and comity even as they overwhelmingly identify as either liberal or conservative.

Next, Cliff Zukin, Professor of Public Policy and Political Science at the Rutgers University, presented his paper, “The American Public and the Next Social Contract: Public Opinion and Political Culture in 2007.” He stressed the distinction between public attitudes on current policy debates and enduring values that lie at the core of the American character. These values serve as a kind of passive restraint and guiding structure for policy discussion, and they include a commitment to equality of opportunity, independence and self-reliance, and a wary acceptance of the idea that the government can play a positive role in individuals’ lives. In turn, these values shape public opinion in important issue areas: on education, they believe that it is a democratic entitlement; on social security, they are skeptical of its solvency and open to finding an acceptable working solution; on health care, they are willing to entertain broad overhauls to address costs and coverage; in their jobs, they are satisfied but anxious about basic economic insecurity. Zukin concluded his remarks with a broad caveat for framing the next social contract. Only in moments of crisis does a window of opportunity for sweeping policy change occur, and an unprecedented shift in economic concerns might point to such a moment.

In the subsequent panel, Mark Schmitt, Julian Zelizer, Professor of History and Public Policy at Princeton University, and Susan Milligan, national political reporter for the Boston Globe, discussed the role of institutions on the next political era. Schmitt stressed that, while trends may point to a different political trajectory, it will not be a return to bipartisanship between liberal Republicans and conservative Democrats. Indeed, the last attempt at that kind of cooperation was the implosion of health care reform in 1993. Since then, the “great sorting out” has occurred, with Republicans to the left and Democrats to the right purged in 1994 and 2006, respectively. This development, and the recent Democratic turn in public opinion, may be a welcome change. Post-partisan sentiments may simply reflect “an opportunity for liberalism to engage with an honest version of conservatism.” The cooperation that could emerge from such a debate is of an unprecedented character: not simply reaching across the aisle to cherry pick like-minded senators, but taking seriously and working together with those who disagree.

Professor Zelizer expressed skepticism about any kind of sea-change in politics. First, he said that conservatism will remain entrenched in political institutions and lasting policy victories, even in the face of a possibly overwhelming electoral loss in 2008. Much the same as in the 1970s, when conservatives imagined that liberalism would simply vanish, it is a fantasy to think that conservative gains in media outlets, court appointments, and lowering tax rates will disappear. Second, polarization is unlikely to fade to the background, as it is fueled not only by public opinion, but also by key institutional features such as the committee system, the primary system, and the new 24-hour media cycle. Finally, any progressive or populist movement will face serious challenges: the Democratic party is no longer the party of the working class, it suffers from conflicting philosophies, and it may fall prey to impossibly high expectations.

Susan Milligan then argued that partisanship is less a matter of liberal and conservative ideology than it is a result of power struggles. Since 1994, the margin between legislative control and minority status has been slight, and Democrats and Republicans alike have not been inclined to throw any bones to the other side. Responding to these pitched battles, the public’s preference for candidates like Obama, McCain, and Huckabee shows that the electorate is taking the process back. “They are physically and emotionally exhausted from the red state/blue state divide,” and the growth of independent voters as a key plurality of voters supports this broad change in political attitudes.

Reid Cramer introduced the panel of David Gray, Maya MacGuineas, and Len Nichols, to explore what policies might be possible in a new political era. Cramer opened the discussion by outlining a number of challenges to basic economic security that assets policy might redress. Against the backdrop of increasing income volatility and rising health and energy costs, the burst of the housing bubble has eroded a key source of savings for Americans. In order for individuals to weather this and other economic storms, policymakers should look to the tradition of the Homestead Act and the G.I. Bill and broaden asset ownership. This kind of inclusive savings policy can transcend partisan debates, by embracing the principles of opportunity from the left and ownership from the right. In the short term, sensible solutions such as automatic saving attract support across the political spectrum, and in the long term, big ideas like a universal 401(k) are promising goals for the next political era.

Next, David Gray spoke about the possibilities for a new political era to coalesce around smaller, more manageable issues that “fly under the radar.” These policy areas, such as spending on children and work/family balance, enjoy robust public support from Democrats and Republicans alike. A number of trends point to the promise of policy innovation on this front. Work and family balance has been an important issue on the presidential campaign trail, and it has seen significant progress as an issue at the state level. As military families and entrepreneurial families struggle to maintain balance, work and family policy is growing increasingly salient. Finally, workplace flexibility will allow the elderly to work comfortably later into life, which will shore up their economic security and provide an important component to addressing the long-term fiscal challenges of entitlements.

Maya MacGuineas then described the challenges that tax and fiscal policy face, as well as some promising strategies that might elevate them to the crucial role they will have to play in the coming political era. These issues may lack the freshness of other innovative policy ideas, and “the size of the government is a cleavage issue between the two parties.” Even worse, there is lingering resentment on deficit reduction, because politicians who sacrificed political capital to see a surplus emerge in the 1990s only to rapidly vanish “fear they will get burned again.” Partisan trends continue, and they breed reluctance to face hard policy choices, even while “easy grabs” such as AMT reform and the stimulus package enjoy bipartisan success. The general lesson to draw is that incrementalism fails, and fundamental reform is needed. There are several approaches that might see such reform through. One is a commission that would construct a comprehensive proposal “with enough moving pieces to build a coalition” that could last. Other ideas include redefining budget concepts in favor of fiscal responsibility and building automatic changes, or triggers, into the budget. Perhaps the most important component of reform is a “grand bargain” that would help those who lose out in any fiscal restructuring.

Then, Len Nichols discussed the question of why now is the crucial moment to move forward on perennial issues of cost, access, and quality in health care. First, the cost of doing nothing is growing to staggering proportions. Support for national health care declined in the early 1990s as the economy eased out of recession; now, the current recession only adds to a more fundamental anxiety caused by skyrocketing health care costs. Second, employers are increasingly unable to compete internationally while providing health benefits. Because they cannot push insurance costs into higher prices or lower wages, employer-based health care is giving way. Finally, broad system stress from emergency care costs establishes the linkages between cost, access, and quality with crystal clarity. We see the results of these salient trends on both sides of the presidential campaign, and recent bipartisan success in the form of the Bennett-Wyden bill should offer hope for coming reform. For such cross-partisan cooperation to prevail, the “new math” tells us that a working proposal must enjoy not only 60, but 70 senators who find it acceptable. To make inroads into both parties and to repair our broken health care system, reform must create effective insurance markets, subsidize those who would otherwise lack coverage, and focus on the twin principles of personal and shared responsibility. The inescapable linkages connecting all these issues show that a grand bargain, laying out the next social contract, is critical.

For the final panel, Mark Schmitt introduced David Frum, fellow at AEI and author of Comeback: Conservatism That Can Win Again, and Jonathan Chait, senior editor at The New Republic and author of The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics, to discuss the new direction that the parties will take in the coming political era. Frum described Republican control that began to emerge in the 1990s as “the GOP cashing in on the Reagan revolution of the 1980s.” After a rare succession of elections failing to produce a clear majority for any candidate, George W. Bush sought in his Presidency to assemble a new coalition, turning the GOP into a lasting majority party. The events of September 11, 2001 disrupted this effort, and public opinion trends have begun to favor Democrats. The question remains how the Republican party will respond to this new era, and whether Democrats will overstretch in their victory in 2008.

Jonathan Chait then argued that the key source of this Democratic ascendance is “the disappearance of broadly shared prosperity” in the economy, propelled by the Bush tax cuts. Chait disputed that rising Democratic self-identification is a temporary fluctuation in partisanship, but rather a lasting ideological sea change. Yet, despite these favorable trends, a progressive agenda could encounter a number of obstacles in 2008, principally the filibuster in the senate. In order to meet these challenges, Democrats must develop institutions, such as nonprofits, to respond to ideas from the right. Furthermore, they must mobilize the public to counterbalance the influence of political inertia and self-interested insiders. He cited Barack Obama’s theory of change as one vision to accomplish this task. In response, David Frum argued that a President Obama, like Reagan and Clinton before him, would only be able to make this kind of direct appeal to the public once.

-David McNamee is a Program Associate for the Next Social Contract.

Saving Promises

Asset Building — Wed, 19 Dec 2007 10:14:00 -0500

For the first time since 1952, the absence of incumbents vying for the nomination of each major party has created a wide open race, one where the stakes are remarkably high. This has contributed to an extended campaign process that will last almost two years by the time the presidential election is held in November of 2008. While some lament the length of this campaign cycle, it has generated a great deal of activity in the policy arena as each candidate has sought to articulate their vision for America’s future and proposed policies that will help take us there. … more

Asset-Based Welfare Policy in the U.K.

Asset Building — Fri, 09 Nov 2007 13:49:00 -0500

While traditional anti-poverty efforts have focused on maintaining a social safety net to protect the poor, there is a growing recognition that economic well-being hinges on a household’s ability to accumulate a wide range of assets. The value of assets is based not only on the economic security they provide but in how they enable people to make productive investments in their future. This approach has contributed to a wide range of policy proposals designed to help households build assets, including matched savings accounts, children’s accounts, and accessible saving plans.

Since 2000, the United Kingdom has begun implementing a number… more

Don't Throw Baby Bonds Out With Bath

Articles — Thu, 01 Nov 2007 08:54:00 -0400

For better or worse, America has a habit of conducting much of our policymaking through the presidential election process. This can be dangerous when meaningful reform efforts get trumped by volatile politics. Sure, we’d like campaign promises to mean something but it’s counter-productive if we let the consideration of good ideas get easily diverted into the gutter.

A case in point was the recent discussion of Hillary Clinton’s Baby Bond proposal, which was quickly hijacked by partisan politics. That’s a shame because the idea of creating a system of children’s savings accounts has good politics behind it and… more

Baby Bonds Pay Bipartisan Dividends

Articles — Tue, 16 Oct 2007 12:33:00 -0400

At a recent campaign stop with the Congressional Black Caucus, Sen. Hillary Rodham Clinton said, “I like the idea of giving every baby born in America a $5,000 account.”

That was enough to generate a few headlines and some right-wing outrage. The Drudge Report was quick to tweak one of its favorite targets and drive some Internet traffic with a bold banner, “A Bond for Every Bassinet.”

The conservative Washington Times and New York Post blasted the idea within 24 hours, and Republican presidential candidate Rudy Giuliani called it “pandering” and promptly incorporated it into his next fundraising appeal.

But… more

A Citizen's Guide to the ASPIRE Act

Asset Building — Mon, 01 Oct 2007 13:09:00 -0400

The Section-by-Section Summary of the Bill KIDS Account Fund KIDS AccountsCertifications Related to Government ContributionsRules Governing KIDS Accounts Relating to Investment, Accounting and ReportingTax Treatment of KIDS AccountsPrivate Management of KIDS AccountsKIDS Accounts Fund BoardFiduciary ResponsibilitiesAssignment, Alienation and Treatment of Deceased IndividualsAccounts Disregarded in Determining Eligibility for Federal BenefitsReportsPrograms for Promoting Financial Literacy

For a detailed description of each section of the ASPIRE Act, please see the PDF document below.

ASPIRE Act Frequently Asked Questions

Asset Building — Mon, 01 Oct 2007 02:00:00 -0400

The attached document answers the following questions about the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act:

What does the bill do?Why is a bill to promote asset building for children necessary? Who is eligible? Will illegal immigrants or children who become citizens… more

New America Foundation Releases First Papers from Next Social Contract Initiative

Communications — Fri, 20 Jul 2007 06:50:00 -0400

The New America Foundation released two new policy papers from its recently launched Next Social Contract Initiative today at a public event held in Washington. The two papers are the first in what is an ongoing project to understand how the American social contract has evolved, why it fails to meet the needs of Americans needs today, and how it can be reinvented for the conditions of a largely postindustrial and increasingly diverse society. The Next Social Contract Initiative aims to reinvent American social policy for the twenty-first century. Through a… more

Making the Social Contract Citizen-Based

Communications — Thu, 19 Jul 2007 22:30:00 -0400

A New America Event
07/20/2007 - 9:30am

America's social contract -- the complex, largely unwritten deal between workers, employers, and government that gives individuals the security they need to navigate a dynamic economy -- is eroding. The arrangements of our existing social contract no longer make sense in an economy characterized by global labor markets, shortened job tenure, heightened capital mobility, rapid technological change, and increased pressure for short-term profits. Ensuring that every American can access the goods and services necessary to enjoy a productive and enterprising life should not depend on where you work, where you live, or what you believe. The American social contract should be citizen-based.

One of the most glaring shortcomings of the current social contract is the link between health care and employment status. Creating a citizen-based social contract will require remaking our health care system so it becomes sustainable and accessible, one where health care benefits are portable and tied to the individual, rather than to his or her place of employment. Such a system can be built upon the essential pillars of personal responsibility and shared responsibility. Mandates to buy insurance and subsidies to help people afford to do so will be balanced with the creation of an insurance marketplace that is affordable and a delivery system that works in terms of both cost and quality.

At this event, the New America Foundation released two papers from The Next Social Contract Initiative. The first explores why the next social contract should be citizen-based and the second offers a detailed proposal to do so by starting with reforming our health care system.

The Next Social Contract Initiative aims to reinvent American social policy for the twenty-first century. Through a program of research and public education, the initiative will explore the origins of our modern social contract, articulate the guiding principles for constructing a new contract, and advance a set of promising policy reforms.

Bloomberg Tackles Poverty

Articles — Sat, 30 Jun 2007 11:40:00 -0400

Even for public servants with the best of intentions, the seeming intractability of poverty in America can be awfully discouraging. Its causes are complex and past efforts have met with limited success. Until Hurricane Katrina hit land, poverty had been absent from the public agenda for so long that there was little consensus among policymakers in how to respond. Not only was the toolbox of effective antipoverty proposals empty but partisan gamesmanship often seems to block innovative, good faith efforts to address it.

Yet persistent, concentrated, and intergenerational poverty remains a scourge upon our prosperous society, an enduring challenge… more

Inequality and Institutions

Communications — Tue, 05 Jun 2007 00:30:00 -0400

A New America Event
06/05/2007 - 12:30pm

When it comes to the economy, it's often said that “a rising tide lifts all boats.” Yet most economists have been confounded by the failure of recent productivity gains to significantly raise the incomes for the majority of American workers.

At this special event, a presentation of the Next Social Contract Initiative at the New America Foundation, MIT economists Frank Levy and Peter Temin presented their new paper “Inequality and Institutions in 20th Century America,” which explores the dynamics of widening income inequality in the second half of the twentieth century. Based on groundbreaking research, they propose a novel history of inequality which focuses on how economic outcomes are shaped by the interplay of economic institutions. Their argument takes into account a range of policy levers, as they consider how the changing influence of collective bargaining, wage policy, and taxation tipped the balance of compensation in the U.S. economy in a manner that severs the traditional relationship between productivity gains and widespread wage increases. Following their presentation, Maya MacGuineas of the New America Foundation offered her own perspective on the factors contributing to these trends, and Reid Cramer, co-director of the Next Social Contract Initiative, moderated a lively Q&A.

Video of this event is available at right, while an MP3 audio recording can be downloaded below.

About The Next Social Contract Initiative: Through a program of research, analysis, and public education, the Next Social Contract Initiative is focused on understanding how the American social contract has evolved, why it fails to meet our needs today, and how we can reconstruct it for the contemporary economic conditions and an increasingly diverse society.

The Next Social Contract

Articles — Thu, 17 May 2007 12:54:00 -0400

The initial round of presidential primary debates leaves no doubt that the presidential horserace has already broken from the gates. While some may lament the early departure -- given that votes will not be cast for another 8 months -- the absence of incumbents vying for each party’s nomination has created a wide open race, one where the stakes are remarkably high.

Although most of the press coverage to date has focused on the daily stream of polls, jibes, and behind-the-scenes intrigue, the coming election represents our first real chance to remake the social contract for the 21st century. Our nation’s… more

The Assets Agenda 2007

Asset Building — Wed, 11 Apr 2007 21:48:00 -0400

America’s personal savings rate has been negative for the last two years, a dubious economic feat not achieved since the Great Depression. While many Americans own assets, most of our public policies that support savings and ownership leave out those who own little or nothing. If we are to successfully broaden savings and assets ownership, our policy efforts must be expanded, strengthened, and targeted to those with the greatest need.

The purpose of this issue brief is to summarize a federal public policy agenda to broaden savings and asset ownership opportunities for Americans with lower incomes and fewer resources. It reflects… more

Going for Broke

Articles — Tue, 06 Mar 2007 04:55:00 -0500

In the aftermath of Hurricane Katrina, which struck the Gulf Coast with such ferocity in late August 2005, Americans were shocked by the broadcast images of desperately poor people left to fend for themselves. The depth and consequences of poverty in America, normally hidden from public view, had once again become the subject of debate and national soul-searching. And yet, a year and a half later, the subject of poverty has fallen so far off the public’s radar screen that President Bush did not give it a mention in his recent State of the Union Address. How can our prosperous… more