Dems differ on key economic issues
In Saturday's Democratic debate, former Secretary of State Hillary Clinton seemed to be staking out a somewhat more centrist position to the right of both Senator Bernie Sanders and former Governor Martin O'Malley on key economic issues.
The night's hottest exchange was when Senator Sanders suggested that Clinton's past success at raising millions of dollars from Wall Street executives meant that she would not be tough enough on regulating the industry.
"Let's not be naive about it. Why over her political career, has Wall Street been a major -- the major -- campaign contributor to Hillary Clinton?" Sanders asked. "Maybe they're dumb and they don't know what they're going to get, but I don't think so."
Sanders wants to bring back the Glass-Steagall Act. The Depression-era reform was designed to create a firewall between commercial banking and more speculative investment banking. Portions of Glass-Steagall were repealed by Congress in 1999 during the Bill Clinton Administration to encourage a consolidation wave in financial services. It's a move that many experts now say made the banking system riskier and helped bring about the financial crisis in the late 2000s.
Sanders also wants to see the nation's six largest banks broken up because he says they have only gotten bigger since the 2008 market meltdown and that the financial services sector was spending millions in campaign cash to maintain the status quo.
Clinton was quick to fire back. "Wait a minute, he has basically used his answer to impugn my integrity. Let's be frank here," she said. Clinton invoked her experience as a U.S. Senator working for the re-building of lower Manhattan, which includes the Wall Street financial district, as an apparent rationale for her strong support from the industry.
Clinton insisted that simply reinstating Glass-Steagall "would not get job done" and that she had her own aggressive approach for reigning in Wall Street excess. "I have said if the big banks don't play by the rules I will break them up." Clinton said her strategy to regulate Wall Street had the support of liberal economist Paul Krugman and that of Paul Volcker, a former Federal Reserve Chairman.
"Play by the rules?," scoffed Sanders. "The business model of Wall Street is greed and fraud." At one point Sanders invoked the name of Teddy Roosevelt, the Republican president known as a "trust buster" for breaking up some of the nation's most powerful corporations in the early 1900s.
Former Governor Martin O'Malley sided with Sanders. "This is crony capitalism," O'Malley said. "We need to protect Main Street from Wall Street."
Bringing back Glass Steagall was not the only common ground that former Governor from Maryland and the independent Senator from Vermont found Saturday night. Both O'Malley and Sanders embraced raising the current minimum wage to what they both called "a living wage" of $15 an hour.
Clinton supports a $12 federal minimum wage.
On health care, Clinton positioned herself as the prime defender of President Obama's Affordable Care Act: "Well, look, I believe that we've made great progress as a country with the Affordable Care Act. We've been struggling to get this done since Harry Truman. And it was not only a great accomplishment to the Democratic Party but of President Obama."
"I believe we've gotta go further," Sanders said. "I wanna end the international embarrassment of the United States of America being the only major country on earth that doesn't guarantee health care to all people as a right, not a privilege."
Clinton supports capping prescription-drug costs at $250 a month, programs to limit or end higher-education debt, and mandatory paid-parental leave. "And I would pay for it by, yes, taxing the wealthy more, closing corporate loopholes, deductions and other kinds of favorable treatment.," Clinton said. "And I can do it without raising the debt, without raising taxes on the middle class and making it reasonably manageable within our budget so that we can be fiscally responsible at the same time."
O'Malley has his version of a proposal for debt-free higher education and also sees higher taxes on the wealthy as a way to shore up what he sees as a shrinking middle class. "Under Ronald Reagan's first term the highest marginal rate was 70%." O'Malley said. "And in talking to a lot of our neighbors who are in that super wealthy millionaire and billionaire category, great numbers of them love their country enough to do more again in order to create more opportunity for America's middle class."
Sanders, who describes himself as a democratic socialist, has committed to free public college, expanded Social Security benefits and a trillion-dollar investment in the country's infrastructure. How would Sanders pay for his ambitious agenda? "Yes, I do believe that we must end corporate loopholes such that major corporations year after year pay virtually zero in federal income tax because they're stashing their money in the Cayman Islands."
So just how high would income taxes would be for the nation's wealthiest households if Sanders were elected president? "We haven't come up with an exact number yet," Sanders answered. "But it will not be as high as the number under Dwight D. Eisenhower, which was 90%....I'm not a socialist compared to Eisenhower."
The next Democratic Presidential debate is December 19 in Manchester, New Hampshire.