Center for American Progress Action
Republican-led Class Warfare
Republican-led Class Warfare
The Conservative Assault on the Middle Class Is Pervasive
David Madland details how the Republicans’ class warfare is pro-wealthy, anti-middle class.
Republican claims that President Barack Obama’s deficit reduction package is “class warfare” are sad attempts to hide the actual class warfare that House Republicans have been engaged in since they took power in January. Like the soot-covered pot calling the clean cooking kettle black, Republicans are deeming slight increases in taxes on the wealthy—to levels far below they have been historically—as class warfare to cover their own efforts to help the wealthy at the expense of the middle class.
Indeed Paul Ryan (R-WI), chairman of the House Budget Committee, is perhaps the worst offender. This weekend on “Fox News Sunday,” Rep. Ryan argued that the proposed “Buffett tax,” which creates a minimum tax for millionaires, is “class warfare,” yet his own budget proposal—supported by all but 4 Republicans in the House of Representatives—is the definition of class warfare.
The House Republican budget, the so-called Path to Prosperity, is chock full of policies that would make life easier for the wealthiest while increasing burdens upon middle class households. It cuts taxes for the wealthy, while increasing taxes on the middle class and significantly cutting programs such as Medicare on which the middle class depend.
The most anti-middle class change in the House-passed Republican budget is ending Medicare as we know it. The plan would have changed Medicare from an important middle-class program that guarantees healthcare for the elderly to a voucher program that fails to help seniors keep up with the cost of premiums. Radically changing Medicare would undermine a program that middle-class Americans have come to rely upon. If Rep. Ryan’s plan becomes law, the average Medicare beneficiary in 2030 would have to pay 68 percent of their health care costs compared to 25 percent under current law, according to the Congressional Budget Office.
The Republican plan also makes cuts to other important middle-class programs, such as Pell grants. These grants help middle- and lower-income families afford the costs of higher education. Not only would cuts to Pell grants undermine social mobility and increase income inequality, they would undermine future growth as the United States would have less educated workforce.
At the same time, the Ryan plan doesn’t ask for shared sacrifice from the wealthy, but instead cuts tax rates for the rich and corporations. The plan would cut the top marginal tax rate for the wealthiest 6 percent of tax filers, and would bring the corporate income tax to the same rate. While exact specifics on the total tax plan were not released, the plan mentions consolidating tax brackets from the current six into three, maintaining current tax revenue levels and eliminating or reforming tax expenditures.
In order to achieve all of these goals, the Republican’s proposed tax plan makes a middle-class tax increase inevitable. There is simply no other way for Republicans to cut taxes for the wealthy and accomplish even their proposed levels of revenue, except for by raising taxes on the middle class. Independent analysis of Rep. Ryan’s previous—but more detailed—budget “roadmaps” by the Tax Policy Center and the Institute for Taxation and Economic Policy found that in order to pay for tax cuts for the wealthy, taxes would have to go up for 90 percent of the population.
The Republican class war on the middle class doesn’t stop with their budget proposal. Many Republicans are opposed to the extension of the payroll tax cut, which would help middle- and lower-income Americans. And Republicans have also been attacking a core pillar of a middle-class society—the union movement. Unions help make the middle class by boosting wages and giving all workers—not just those who are unionized—more power in our economy and democracy.
Yet, congressional Republicans have been consistently trying to weaken workers abilities to join together in unions and collectively bargain. This year, 176 House Republicans (75 percent of the caucus) voted to eliminate all funding for the National Labor Relations Board, which would have prevented the enforcement of labor law for a year. The measure failed to pass the House, but H.R. 1, the continuing resolution passed by the House, included a $50 million reduction in the National Labor Relations Board’s budget, which if it had also passed the Senate would have forced NLRB staff members to be furloughed for 55 days, causing a backlog of cases to pile up.
Many congressional Republicans have also been trying to prevent union elections from being decided by a majority vote. Last year, the National Mediation Board did away with an absurd rule that, for union elections under the Railway Labor Act, counted workers who didn’t vote as having voted against unionization. House Republican leaders tried to use legislation that reauthorizes the Federal Aviation Administration to try and reverse the board’s ruling, once again counting absent workers as votes against the union. This past summer, Republican leaders shut down the FAA for two weeks in an attempt to kill the new union election rule.
The Republican war against the middle class would be a grave mistake in the best of times. Today, it is especially galling. Not only has the Great Recession and its aftermath been especially hard on the middle class, but the median income after accounting for inflation actually fell for working-age households during the supposedly good economy in the recovery between 2001 and 2007, and incomes had been flat for decades before that. In contrast, the share of income going to the top 1 percent increased from 9 percent in 1974 to 23 percent in 2007, according to research by economists Thomas Piketty and Emmanuel Saez.
On Sunday, Rep. Ryan said that “class warfare might make for good politics, but it makes for bad economics.” He’s right about the economics—if he was looking in the mirror. Cutting services and raising middle-class taxes while slashing taxes for the wealthy and corporations does make for bad economics. The middle class is the core of the American economy—they’re the customers in the stores, the workers in the office buildings, and where entrepreneurs and inventors come from. Shrinking the middle class not only harms families in the here and now, it undermines future economic growth. Hopefully, Rep. Ryan will realize the true meaning of his words.
David Madland is the Director of the American Worker Project at the Center for American Progress Action Fund.
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Senior Fellow; Senior Adviser, American Worker Project