Remember when the Democrats were that scrappy little party that fought for lower- and middle-class Americans?
Howard Dean had that good, old-fashioned populist rhetoric going. John Edwards could look at you with those piercing eyes under that perfect hair and talk about “two Americas.” Way back in 2004, Democrats could blame their electoral disasters on a deluge of Republican corporate money — never mind the fact that they nominated an ultra-wealthy moderate with no knack for populism who shored up his campaign’s finances by mortgaging his wife’s multimillion dollar house.
Three years later, the Democrats have a congressional majority. And they have a chance to take a tiny slice of that corporate money that they used to hate so much and give it to the IRS. And if they do that, the IRS won’t have to take a much bigger slice of a few million middle-class families’ income. With one vote, one assertion of this new majority power they’ve been sitting on and talking about for a year and a half, the Democrats could help a lot of people out.
This new corporate money isn’t just Republican money anymore. It belongs to Manhattan hedge fund managers, most of whom give their money to Democrats. Thirty thousand dollars here, ten thousand there. More than some middle-class families make in three months. But the Democrats don’t care about money, right? As Charles Schumer’s Web site proclaims, “Chuck is making a real difference for you.”
Unfortunately for those of “you” who didn’t make more than half a billion dollars last year, Chuck has been bought. According to the Washington Post, after hedge fund managers made successive $28,500 donations to the Democratic Senatorial Campaign Committee, Charles Schumer decided to vote with his newly fattened wallet. By opposing legislation to close a capital gains tax loophole, he’s saying that he cares more about piles of money than the voters. But he won’t mention that publicly. I couldn’t find his position on the bill anywhere on his official Web site.
This sort of behavior isn’t merely shameful. It’s sleazy, it’s dishonest, and it’s dangerous. Whatever anti-tax zealots will say about the bill, it’s not a new tax. It’s not some sort of creeping socialist wealth-redistribution ploy. The bill will close a loophole that allows hedge fund managers to claim their income as capital gains (taxed at 15 percent) instead of as regular income (taxed at 35 percent). Simultaneously, it will prevent a tax intended for the wealthy from being applied to middle-class Americans. In short, the authors of the bill want to make sure that the income from the work that hedge fund managers do is taxed the same way as the income of those who lick their stamps, answer their phones and drive their town cars. On the simplest level, this bill makes sure that labor is taxed equally, whether the laborer is trading bonds or cleaning toilets. And Democrats like Chuck Schumer want to let the super-rich keep soaking the loophole-ridden tax code for all it’s worth.
The Senate won’t vote on this bill for a while. Connecticut’s senators, Chris Dodd and Joe Lieberman, still claim to be undecided. The Democratic presidential front-runners in the Senate, Hillary Clinton and Barack Obama, haven’t made much noise on this issue — but both have taken quite a bit of campaign money from Wall Street.
The Democrats took Congress in 2006, promising to make some headway on Iraq. Nothing has changed. They promised to address some of the pressing economic issues affecting America. And now, with the opportunity to do just that, Democratic leadership is waffling. They’re staying quiet, maybe hoping this will blow over so they can count all this newfound corporate wealth and decide how to spend it against Bush.
Americans don’t give a party a Congressional mandate so it can attract big donors and scheme ways to stay in power. We vote for a change on Capitol Hill because we want new people and new ideas to take on old problems. Income inequality is an old problem in America. It’s a problem that Clinton didn’t do enough about, that Bush made worse and that at least one high-ranking Democrat is determined to ignore.
Ignoring this problem might help a Democratic nominee spend his way into the White House. But if we elect a Democrat who can’t turn away from the money to help a few million fellow citizens, then all those votes that Wall Street money could buy for Hillary or Barack won’t mean a thing.
Xan White is a junior in Pierson College. His column runs on alternate Thursdays.