Next Social Contract

I’ve always resisted the idea that there is "an inherent cyclical rhythm in our national affairs," as the late Arthur M. Schlesinger Jr. put it. Schlesinger suggested that American history moves in 30-year cycles between liberalism and conservatism, between public and private concerns. But it’s hard not to notice that it was exactly 30 years ago that the conservative era dawned, with the introduction of the then-audacious Kemp-Roth tax-cut proposal, in 1977, followed by California’s tax-limiting Proposition 13 the next year.

Rising insecurity in the oil producing regions of the world along with rising carbon levels in the atmosphere are pushing Congress to update our nation’s energy policies. But far from providing a bold solution to our converging environmental, energy and security dilemmas, the bill that has come out of the Senate to gradually increase fuel efficiency standards relies on timid half-measures. Congress should instead consider a more effective and long-overdue step towards energy independence and environmental protection -- implementing a broad-based energy tax.

Executive Summary

In the 20th century, Americans adopted a new "social contract" -- a support system to help provide every American with the basic security and goods considered necessary to enjoy a productive and enterprising life. Under a sound social contract, access to these goods should not depend on where you work, where you live, or what you believe. At its best, the American social contract is citizen-based.

Executive Summary

America’s health care system fails to meet the standards set by its peers around the world. It delivers substandard patient care far too often, leaves tens of millions uninsured, and its rising cost growth threatens the foundations of our economy and society. Unless we move toward comprehensive, system-wide reform, we will continue to waste billions of dollars and thousands of lives every year in a health care system that is riddled with ineffi ciencies.

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.

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.

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.

American social policy, and the debate about poverty and inequality, are constrained by assumptions about politics: That only universal programs will win political acceptance and programs targeted toward the poor will always be poor programs. That the modest American welfare state was built in two great waves, The New Deal and The Great Society, the likes of which we'll never see again. That tax credits and incentives are a subtler and more effective way of delivering benefits than direct government programs.

Earnings of the average US workers with an undergraduate degree have not kept up with gains in productivity in recent decades, according to research by academics at MIT that challenges traditional explanations of why income inequality is rising.

The findings, which will be presented to the New America Foundation today, come amid widespread unease about the sluggish trend in middle class income growth, both in ab-solute terms and relative to the new superstar class of chief executives, hedge fund managers and other financiers.

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.