On Capitol Hill, a focus on the middle class

In a significant shift, Democrats are targeting new government programs to include a higher range of incomes – and ease leading middle-class fears: losing a home, losing health coverage, losing a job, and losing educational opportunity.

If successful, this bid to win back middle-class voters could secure a majority in the November elections to last at least a generation, say leading Democratic strategists.

In response, the GOP is rallying around the campaign theme that what Democrats give in new government programs for the middle class they will more than take back in tax increases, set to kick in when the Bush tax cuts expire in 2010.

"Underneath us tectonic political plates are shifting: Democrats are trying to join a big government agenda to the upper-middle class," says Michael Franc of the Heritage Foundation, a conservative think tank in Washington. "If Democrats win this cohort of voters and keep them with them, they can hold the majority for a long time."

Most Americans say they haven't moved ahead in the past five years – or have fallen behind. It's the most negative assessment of personal progress in nearly a half century of polling, according to a new survey by Pew Research Center and the Gallup Organization, "Inside the Middle Class: Bad Times Hit the Good Life."

Citing this report, Reps. Anthony Weiner (D) of New York and Steven LaTourette (R) of Ohio launched the Congressional Caucus on the Middle Class last week. "It's becoming more and more difficult for middle-class families like the one I grew up in to make it," says Representative Weiner.

This week, the House Financial Services Committee continues its markup of a bill that extends federal relief to families with mortgages up to $730,000 – a provision in this year's stimulus package that is set to expire at the end of 2008.

Last week, the panel approved a $15 billion package to help states and localities buy up foreclosed properties.

Another priority for Democrats is helping middle-class constituents access loans for college. Senate Democrats aim to pass legislation expanding the scope of federally backed student loans – a bid to help families that earn too much to qualify for financial aid but are increasingly shut out of private loans in the current credit squeeze. On April 17, the House Democrats voted unanimously to allow students to borrow up to $57,500 in federal loans to pay for college. (Students still dependent on their parents could borrow $31,000, an increase of $8,000 over current limits.) All but 27 Republicans supported the bipartisan vote.

But for many Democrats, the leading appeal to middle-class voters otherwise inclined to vote for Republicans is healthcare. In February, they fell short in a bid to expand eligibility for the State Children's Health Insurance Program to middle-class families earning up to 400 percent above the rate of poverty. Last year, the Bush administration prohibited states from extending Medicaid to children in families with incomes above 250 percent of the federal poverty limit. The Medicaid regulation required that states first show that 95 percent of poor families currently eligible have been enrolled. On Feb. 5, House Republicans blocked Democrats' bid to override President Bush's veto of this bill – an issue already figuring in Democratic campaign ads.

"For Democrats, the first inclination in the past was to focus more on the disadvantaged and working class. Now, there's a growing recognition that the nature of the electorate is such that you want to broaden that identification," says Norman Ornstein, a senior fellow at the American Enterprise Institute in Washington.

Sen. Charles Schumer (D) of New York, who chairs the Democratic Senatorial Campaign Committee, notes that Mr. Bush beat Sen. John Kerry by 22 points among middle-class voters (with household incomes between $30,000 and $75,000). "The income level at which a white voter was more likely to pull the lever for a Republican than a Democrat was $23,700 – only slightly more than poverty level for a family of four," he wrote in his 2007 book, "Positively American: Winning Back the Middle-Class Majority One Family at a Time."

"We must broaden our message to address the needs of the middle class, whatever the ethnicity or background of its members," he writes in his book.

On the House side, Rep. Rahm Emanuel (D) of Illinois, who formerly chaired the Democratic Congressional Campaign Committee, notes that 16 of the 30 districts that Democrats picked up in 2006 elections were centered in the suburbs. "The election showed that the economic anxiety that has existed for years on the shop floor is now being felt by an increasing number of American workers right outside the corporate suite," he said in a Jan. 14 address.

His proposal, dubbed "New Deal for the New Economy," addresses four issues that "fundamentally impact the American family's bottom line: healthcare, energy, savings, and education," he said. "The first party that puts a human face on globalization, crafts a plan that addresses the American people's economic concerns, and prepares our nation for the new economy will control Washington for years, if not decades," he said.

Meanwhile, families that earn enough to file federal income taxes will receive a short-term boost from the US government. The first tax rebates from the bipartisan $168 billion economic stimulus bill will be sent out on Monday. Both Republicans and Democrats are claiming credit for checks expected to reach some 130 million families in the next four months. But Democrats are already urging passage of a second stimulus bill, including extended unemployment insurance. Republicans say Congress should wait to see the impact of the first stimulus plan.

GOP leaders charge that Democrats new outreach to the middle class comes at a price: a significant increase in taxes. "They're offering voters a big prize without telling them what's behind the curtain," says Ken Spain, a spokesman for the National Republican Congressional Committee. "A repeal of the tax cuts of 2001 and 2003 would result in the largest tax hike in American history. Voters will feel it in their wallets when that money is no longer there."