Anxious lower middle class families are shaping up to be the crucial political constituency of this year's election. Polls show that financial security is their biggest concern. They worry about health and education costs, about retirement, and about their prospects for getting ahead. Their insecurity has markedly reduced public support for free trade and contributed to public concerns about immigration. They also appear to be behind a great deal of the generally uneasy mood of the electorate.
The Democratic candidates have noticed and are championing an old-fashioned economic populism that stokes voters' fears and seeks to direct them toward welfare state-style solutions that expand the role of government.
Among Republicans, only Mike Huckabee has made a real effort to speak to the lower middle class. On the stump, his economic message is always directed at the working family: "We're losing manufacturing jobs, homeowners face a credit crisis, high fuel costs are spiraling, and families are hurting," he noted in a recent campaign ad. But this conservative populism is often merely a rhetorical echo of its liberal counterpart. His distinctive proposal, a form of national sales tax, would hurt many working families.
The other Republican candidates are not even trying to appeal to these voters, which could prove very costly in key states, especially in the upper Midwest, in November. Lower middle class parents have been a crucial Republican constituency in recent years. More important, these voters are the heart and soul of the kind of American culture that Republicans want to promote: industrious and striving, family-oriented, culturally conservative, religious, and patriotic.
With talk of recession in the air, many Republicans will be tempted to make pro-growth tax policies, and particularly cuts to the corporate income tax, the entirety of their economic message. Growth is indispensable. But these voters' concerns made them sour on the economy even at the height of the boom. Higher growth will not by itself address their concerns. Republicans should be careful not to seem more intent on cutting corporate taxes than on listening to these voters.
Without their support, after all, it will be hard to sustain a pro-growth politics. The silence on the right about their problems could lead these voters to conclude that protectionism, redistribution, and nationalized health care are the answers. But there are free-market, conservative solutions, and the Republican candidates can highlight them.
Health care is a particular concern for lower middle class workers. They worry about losing their insurance if they lose their jobs, or getting stuck in jobs they do not want because they cannot carry their insurance with them to new ones. Their wages have stagnated--almost entirely because of rising health care costs. These voters could be persuaded to support a government-run health care system--as the Democrats are trying to do--but surveys suggest that they would prefer a solution that does not risk taking power away from them and their doctors, or compromising their quality of care.
Republican candidates actually already have a set of policy proposals to address these concerns, but they have yet to campaign on their relevance to lower middle class families. The frontrunners have all proposed ending the tax penalty on individuals who buy their own insurance (rather than get it through work). That simple change would make it much easier for people who work for small businesses, or are out of work, to afford coverage--coverage that would stay with them from job to job. The candidates have also proposed a series of measures to increase competition in the health care industry, which would help control rising costs without a government takeover.
These policies would not achieve the Democrats' goal of "universal coverage." They wouldn't force everyone to buy insurance. But they would seriously reduce the number of people without insurance, make insurance more affordable for those who want it, and make it more portable and secure. Voters care more about these goals than about universality. Yet Republicans continue to talk about health care as though getting more people insured were the only policy goal, or, worse, as though voters were deeply concerned with abstractions like improving market efficiencies.
Equally worrying to the lower middle class voter is the high cost of raising a family. Lower-income families are especially burdened by payroll taxes like Social Security and Medicare. An expanded child tax credit applied against the payroll tax would offer relief to exactly the families who need it. (By raising a child, they are already making a large contribution to Social Security.) Most parents will prefer money in their pockets to the liberal answer of subsidies for day care and housing.