Middle Class Dismissed

Written by David Frum on Wednesday July 30, 1997

Liberals used to jeer at the working-class social conservatives who voted for Ronald Reagan; Mr. Reagan, they said, was exploiting working-class resentment of abortion and racial
quotas, while delivering the economic goods to the rich. How could anyone be such a fool as to trade money for symbolism?

The new budget deal suggests that President Clinton believes there are plenty of such fools. It offers substantial tax cuts to the rich and poor -- from the child tax credit to capital gains tax reductions -- but the middle and upper-middle classes whose main source of income is their salaries get little but kind words and poll-tested gimmicks. Mr. Clinton said as a candidate in 1992 that he was seeking the Presidency on behalf of a "forgotten" middle class. But in this budget deal, it is he who is doing the forgetting.

Democrats have been losing Presidential elections since 1968 by appearing to champion the poor above everybody else. By talking tough on welfare and by promising tax cuts, Mr. Clinton tried to reach out to the broad middle of the electorate -- families earning the median or slightly better than median income.

And he succeeded. In 1996, he beat Bob Dole among voters earning $50,000 to $75,000 a year. And what did those people get in return for their support over the years? Just what the social conservatives got: symbols. The V-chip. Pro-choice judges. Rousing speeches on Earth Day. The first female Attorney General. Not much else.

For the working poor, this budget deal creates a vast new medical entitlement for uninsured children and delivers a $500-per-child tax credit even to families that pay no income tax. The well-off get a reduction in the capital gains tax and an increase in 10 years to $1 million in the size of estates sheltered from the nation's confiscatory death taxes.

But what about the two-earner family on Long Island or elsewhere in the costly New York area taking in a total of $75,000? The construction worker and the nurse who have two kids, a six-year-old car and a mortgage -- but no stocks or bonds. What has the President done for them?

In his first term, President Clinton reneged on the promise of a "middle-class" tax cut, imposed a new tax on higher-income Social Security recipients, and tried to force through a comprehensive health plan drafted without much attention to the concerns of people like the Long Island couple.

Now in his second term, the President has deployed all his rejuvenated political strength to thwart tax relief for these middle-class salary earners. He has made clear since 1995 that broad reductions in income-tax rates will be vetoed. He fought to confine the per-child tax credit to families earning less than $60,000. And while he was forced in the end to give way on that point, salaried workers making $75,000 won't be throwing many steaks on the barbecue to celebrate. With an annual Federal tax burden that the Tax Foundation estimates to be nearly $16,000, a $500-per-child credit looks rather more like a rounding error than a tax cut.

The good news for the middle class is, supposedly, the President's elaborate plan for tax relief for college tuition. Unfortunately, many experts believe Federal student assistance programs have only tempted colleges to raise their fees, leaving the real cost to the student's family unchanged -- which is how tuition costs have been able to run up so fast over the past two decades.

But even if that turns out not to be true this time, there remains something highly offensive about the President's reluctance to disgorge any middle-class money unless it is spent in ways of which he approves. This budget looks a lot less like middle-class relief than like a remission of tribute from a feudal lord who expects the peasantry to doff their caps in gratitude.

No, it's no longer a forgotten middle class. Instead, it is a manipulated middle class. That may count as a political accomplishment in some ways. But it's an accomplishment the President's party may not thank him for in the end -- not when the next recession reminds middle-class America that it has become even more overtaxed and underserved than it was when it erupted in political anger in 1992.

Originally published in The New York Times