The newest trade framework will face a very wary public

Nearly half of the global economy’s rules are up for grabs this week as the U.S. trade representative and secretary of Commerce convene trade ministers from 13 Pacific Rim nations in Los Angeles. Their task is to launch negotiations for a proposed Indo-Pacific Economic Framework (IPEF) trade deal.

I want President Biden’s team to succeed in creating the “worker-centered” agreements the president pledged. To win a very wary public’s support for any Indo-Pacific deal, negotiators need to go in recognizing some major potential pitfalls.

Across the political spectrum, the public is united in thinking trade agreements emerge from a corrupt, secretive process. They think America’s billionaires and corporate monopolies, U.S. oil giants, pharmaceutical, Big Tech and telecommunications corporations, along with their lobbyists — write the rules.

My organization, Democracy Corps, conducted focus groups in July with service sector workers in Philadelphia, Republican men in Houston and Fort Worth and college-educated voters in Seattle. When asked about “trade agreements,” I realized they looked at it through a pretty distrustful first filter: Who has the power to shape them?

The full article can be read at The Hill.

The Politics of the Child Tax Credit

Voters see it as a strong Democratic accomplishment, and a key Republican vulnerability.

In the American Rescue Plan, passed at the outset of the Biden administration, Congress greatly expanded the Child Tax Credit (CTC) to virtually all families with children, and paid it out monthly for the first time. Starting in July 2021, the IRS sent families payments—$300 for each child under 6 years of age and $250 for children 6 to 17 years. The credit was made fully refundable and offered to families with the lowest incomes for the first time. More than 90 percent of all children were eligible for the credit. (Full disclosure, my wife Rosa DeLauro was a co-author of the policy.)

While only in place for a year, the results of the expanded Child Tax Credit were—without understatement—transformative.

Harvard economist Jason Furman wrote, “The Biden plan is the most impressive and ambitious child poverty plan ever in the United States. This would not just help in the short run but have long-run mobility benefits as well.”

H. Luke Shaefer and Kathryn J. Edin, co-authors of $2.00 a Day: Living on Almost Nothing in America, wrote, “The expanded child tax credit could effectively eliminate the kind of $2-a-day poverty that motivated our book … We have the ability to wipe away the most extreme forms of child poverty with a simple policy.”

Academic studies found that in just its one year of operation, the expanded CTC was delivered to 36 million households and cut child poverty by over 40 percent, with 3.7 million kids lifted out of poverty. The number of children without enough to eat fell by three million. And after it expired, 2.1 million children in Black, Hispanic, and Indigenous communities fell into poverty.

The additional funding for poor families sustained families and supported work. Low-income recipients spent more than 90 percent of the added money for food, utilities, clothing, diapers, and education. Many used the monthly credit to cover child care costs so they could go back to work. When the monthly payment stopped, the number of unemployed went up because these families could not afford child care.

The worry of conservative skeptics that the payment would be “welfare” and lead to people declining employment has not been borne out.

The expanded Child Tax Credit is expensive, but it is an investment. Economists have found that taxpayers get 84 cents back for every dollar spent in children being healthier with decreased health care costs, less costs for child protection and foster care, and higher wages and taxes paid. The investment pays off tenfold, as children get more education and training, there is less crime, parents earn more money and pay more taxes, and people are healthier and live longer.

But if the Child Tax Credit is really going to become “Social Security for children,” then it also must be good politics.

Fortunately, it is.

The full article can be read at The American Prospect.

Battling to a Win in 2022

Democrats have a path to victory, according to recent polling.

Democrats face daunting internal problems and headwinds to get to a winning margin in the 2022 midterms. Yet it is possible.

To investigate this, we conducted a 2,500-person national and battleground-state survey, with large oversamples of the Black, Hispanic, and Asian American (AAPI) communities. The survey also maintains the level of working-class voters in the electorate that we saw in Donald Trump’s campaign in 2020: 61 percent without a four-year college degree (my definition of working class). The white working class still forms 46 percent of the survey respondents.

To protect against Trump voters’ distrust of polls and elites—something I learned about from the polling on Netanyahu in Israel and Brexit voters in Britain—I put up the recalled Trump vote for white working-class women to 57 percent (a 17-point Trump margin) and for the men to 65 percent (27-point margin).

This survey shows an electorate that looks miserable for Democrats. Only 28 percent believe the country is on the “right track.” They view Republicans more favorably than Democrats, “Republicans in Congress” more favorably than “Democrats in Congress,” and give Donald Trump a higher job approval rating than they do Joe Biden.

The top issue by far is the cost of living. After that comes the economy and jobs, and crime and violence. And Republicans have a fast-building advantage on each, going from 4 points on the cost of living to 14 points on crime and 15 points on the economy. Democrats struggle to be more trusted on the economy.

Crime is a top-tier issue for Hispanics, Asian Americans (AAPI), Gen Z, and millennials; and for Blacks it is at parity with the cost of living. Democrats lose Asian Americans by 9 points on who is better on crime. And the biggest worry in the survey, if Democrats were to win control of the Congress, would be a surge of crime and homelessness and attacks on police. Major parts of the Democratic base accept Trump’s dire warning that America has never been more at risk from crime, open borders, disrespect for police, and a lack of pride in America.

And finally, 54 percent of Republicans say they are following the election with the highest level of interest on a 10-point ladder scale, 8 points higher than Democrats. To estimate likely turnout, we highlight which voters put themselves from 8 to 10 on that ladder. All voters are at 67 percent, but Blacks, Hispanics, and AAPI voters trail that level by about 10 points, and Gen Z voters trail by 20.

Yet Democrats are, despite all these problems, at a 2-point advantage in the generic congressional vote, with still more cards to play.

This poll shows how Democrats could readily lose their lead and fall behind if they make the wrong choices, particularly on the cost of living and crime. There are deep frustrations running through the electorate that Republicans will never cease to exploit. But there is also a strategy for Democrats to prevail.

The full article can be read at The American Prospect.

After Ukraine, Voters Want Climate Solutions

New polling shows a bolstered desire for a rapid transition to green energy.

The Russian invasion of a democratic Ukraine, the disruption of Russian oil and natural gas, and an unimaginable spike in gasoline prices have disrupted both global and domestic energy politics. They have done so in completely surprising but understandable and reassuring ways.

Predictably, Russia is reviled in ways we have not seen since the hottest days of the Cold War. In polling, the proportion of respondents viewing Russia negatively reached 72 percent, including 63 percent who were very negative. That was also matched by the polarized and symmetric embrace of NATO, the North Atlantic Treaty Organization. In June, a plurality of 36 percent had warm feelings toward it, though a fifth was not sure. Not now. A 2-to-1 majority feels warmly about NATO. And people also feel significantly warmer about allies like France, Germany, and the United Kingdom.

But the war has also brought a series of dramatic and surprising shifts in public thinking about energy and climate change, according to surveys I conducted in France, Germany, the United Kingdom, and the United States for the Climate Policy and Strategy project.

After the global COP26 conference in Scotland, the public debate moved to whether China and India were on the program of getting to net-zero carbon emissions, and how one dealt with the high cost of transitioning to renewable energy. Some conservatives in Britain, Germany, and the United States raised those issues. And in our January survey in Germany, the new government elected on a climate agenda was getting the most support for helping consumers with their energy bill when the country’s carbon tax came into force, by removing the climate surcharge and shifting the cost onto the federal government.

But now in the United States, the spike in gas prices has led people to believe fossil fuels are the most expensive option. Every day they stare at figures approaching $5.00 and $6.00 a gallon, the highest price ever at the pump, it deepens the consciousness of this cost equation. A majority in my April survey now believe the cost of the transition will not be unacceptably high.

When we asked which concept is “more fundamental,” the “climate crisis” or “energy crisis,” a majority of 52 percent said the former. Only 41 percent chose the “energy crisis.” A third answered with intense agreement that the climate crisis is fundamental, compared to only a quarter on the energy crisis.

The constant experience of worsening extreme weather events is also changing the calculation. The proportion giving positive reactions to measures to prevent global warming has jumped from 44 percent to 52 percent since last June.

The desire to prioritize the climate crisis also holds for those most likely to vote in a midterm election and in the battleground states and districts.

Some of these surprising changes are explained by America becoming somewhat less polarized on climate change. A big majority of moderate and a plurality of conservative Republicans now believe climate change requires major action and is worth the cost.

If you think we face a “climate crisis,” imposing more costs on energy consumers will not deliver the energy transition

There is virtually no national leader in in the developed work, Europe or OECD that does not describe today’s global warming as a “climate crisis,” “climate emergency” or even a looming “climate apocalypse.”

Those warnings are sobering. And they sound like the kind of conclusions that would be followed by calls to declare war, join other nations in new alliances, and unify and mobilize the citizenry to confront this new enemy.  

When we faced such national and global crises in the past, Franklin Roosevelt and Winston Churchill called on the nation to act. Did they say, we are starting this great national effort by raising your taxes and putting up fees on petrol/gas and putting up tariffs on imports?

Of course, in time, government action and regulation led to higher prices on some products, others being barred or rationed.

Huge majorities of citizens in the United States, the United Kingdom and the European Union believe “climate change is a threat, and we need major action to combat it.” In a recent poll conducted for the organization, Climate Policy & Strategy, over 60 percent affirmed, with only 27 percent believing, “the threat of climate change is exaggerated and the high cost of fixing it may not be worth it.”

Yet many industries and academics and elected leaders have insisted on prioritizing raising the cost of fossil fuels, implementing a carbon tax and putting on green levies or taxes on utilities.

What a surer way to temper some of the citizenry’s enthusiasm for acting against climate change.

It is the ordinary citizen who is clear-eyed on its priorities and what is the sensible way nations normally address such a national and global crisis.

We have not lost the ordinary citizen yet. Every country faces a spike in energy bills, and they have a range of explanations for it. In the United Kingdom, they look to “profiteering” by the energy companies,” Russia reducing supplies, and growing global demand. At the bottom of the list are “green levies and taxes,” mentioned by just 13 percent.

In Germany, 51 percent say high global prices and 41 percent, expressive levels of taxation. Only 29 percent mention the “the transition to green energy.”

But there is a growing minority in Germany who mention higher energy costs as a reason to oppose government policies.

Have elites noticed that the United States passed its bi-partisan infrastructure package with President Biden and the Democrats leading the opposition to any rise in the gas price? Any further Build Back Better bill will be financed by higher taxes on big corporations and billionaires. The United States has ruled out any carbon tax or rise in energy prices.  

My surveys finds only a quarter of German voters support “a tax on burning coal, oil and natural gas would be a fair and efficient way of encouraging people to switch to lower-carbon ways of living.” Putting up taxes and fees on fossil fuels drops to 20 percent as a way to “fund the development of renewables and a sustainable economy,” when the choice is the government taking the lead in “setting regulations to make energy more efficient and invest in innovative research to enable” to a low carbon economy.

While the elite discourse is focused on market solutions, the public is looking for new national targets to drive business and consumer behavior, new regulations and enforcement, and investments to spur innovation and help families deal with associated costs.    

In the Climate Policy Strategy surveys, we asked the public which were most important to do. In France, it was creating new crimes for causing environment damage, followed by regulations to increase insulation of buildings and banning some internal flights.  Under Merkel, it favored incentives to install solar panels and speeding up closing of coal-fired plants. Under Scholz, it is getting 80 percent electricity from renewables, restrictions on short-haul flights, and a social compensation to offset costs for “ordinary people” from EU carbon pricing. In the United Kingdom, the public chose increasing offshore wind capacity to power every home.

And in the United States, the voters embrace administration plans to replace 100 percent of lead pipes and new jobs installing service lines, $50 billion investment in making infrastructure and homes resilient and energy efficient and eliminating subsidies to fossil fuel industries to pay for environmental measures.

The public believes we face a climate emergency, and they are quite reasonably backing bold policy changes to address it. Elites should appreciate the imposition of added charges at a time when the cost of living is so painful will jeopardize the support on which climate policy depends.