Save democracy by saving middle class

Democracy depends on a healthy middle class. History has shown in America, France, England, and other nations that the fruit of inequality is political instability. Thankfully, America has the ability to swell the ranks of our shrinking middle class. We’ve done it before.

For example, during the Great Depression of the 1930s, President Franklin D. Roosevelt established the New Deal, extending a hand up to millions sunk far into poverty. Social Security and other programs brought us back from the brink of despair and desperation. Fifty years ago, President Lyndon Baines Johnson rolled up his sleeves and, with Congress, tackled his “unconditional” War on Poverty which gave birth to Head Start, Medicaid, Medicare, and effectively halved poverty in America.

Unfortunately, in recent decades, policy makers have backtracked on the War on Poverty by cutting programs and services in the name of deficit reduction. For instance, Congress recently cut SNAP (formerly Food Stamps) by $8.6 billion in the farm bill. If we want more Americans to gain upward mobility, we must support policies meant to increase economic self-sufficiency.

To accomplish this, we should first ensure that people can earn what they need to make ends meet. Increasing the minimum wage to a living wage is vital. People who earn enough to thrive can and will put money back into our economy. When the American Dream is within reach, earners see a reason to plan for the future. People broken by poverty find it hard to believe in, and work toward, a life that includes educating their children, owning a home, and building savings to protect against setbacks. Congress should also expand the Earned Income Tax Credit and Child Tax Credit which enabled 9.4 million people to pull themselves out of poverty in 2012.  

We need to update programs to support low-income families as they get on their feet. Right now, many programs automatically terminate when a family’s income exceeds the income eligibility level, even if that increase is just a small raise. If a single parent is lucky enough to get a raise which would increase her income by a mere $80 per month, should she automatically lose several hundred dollars in SNAP or child care or housing assistance benefits and be pushed deeper into poverty? The “cliff effect” is essentially punishing her for her success. Instead, let’s re-grade this “cliff”  into a slope where public benefits decrease gradually in proportion to a family’s financial improvement. These programs allow people to advance education and skills.

To increase the middle class we must help families save for the future. Data released by the CFED (Corporation For Enterprise Development) last month shows the percentage of American households who lack the savings necessary to ride out a job loss or medical emergency is 25 percent, and it rises to an astounding 44 percent if one counts only assets that can be converted to cash fairly quickly. That’s almost half of us. Two lost paychecks would place half of our citizens in serious financial trouble.

We have spent billions promoting asset building through tax breaks that benefit the wealthy. The government also spent billions of dollars bailing out the richest class that give us the Great Recession. Our goal, if we want to build up the middle class, should be to support people trying to achieve personal financial security, not just reward those who already have it. The Financial Security Credit, which uses the tax code to create matched savings accounts for low-income taxpayers, would help struggling families save so when disaster strikes, they would have a personal safety net to fall back on.

Outsourcing and the Great Recession have battered our democracy by shrinking the middle class. Too many American children go hungry. However, we have the means to pull people up from poverty once again. Let’s renew our commitment to build newer and stronger ladders out of poverty. Please contact our Montana legislators and urge them to support programs that will reduce poverty and restore the middle class. These include the Earned Income Tax Credit and Child Tax Credit and the proposed Financial Security Credit.

Let’s end the “cliff effect” for those who receive modest wages. Let us help our working poor by raising the minimum wage. We can and should ensure the American Dream is once again within reach for all our citizens.

Contact the Sen. Jon Tester at 202-225-3201, Sen. John E. Walsh at 202-224-2644 and Rep. Steve Daines at 202-225-3211.

Cunningham is a resident of Coram.