Introducing the Opt Out Society

There's an old saying that says, "don't bring a knife to a gun fight." Another old saw goes "know your enemy." Truer words were never spoken as Democrats approach the 2004 elections. President Bush, fresh off his victory in Iraq, the staged performance on the aircraft carrier Abraham Lincoln, and the capture of Saddam, has maintained strong approval ratings. But while the president wraps himself in the flag and the banner of unity in the American war against terror, the GOP assault on common goals and the public interest continues unabated. From economic growth, tax policy and health care to energy policy, retirement security, the judiciary and the environment, the Democrats seem powerless to stop the wartime Republican agenda despite its overwhelming rejection by the American public. It's not just a question of will; Democrats lack a program and a coherent philosophy with which to fight the GOP. American national unity during the war on terror seemingly trumps all opposition.

Ironically, it is the very realization that it is American national unity itself that is under attack by the GOP during a time of war that presents Democrats with their best chance for victory in 2004. The American people, standing shoulder to shoulder against foreign foes, are being divided and splintered by a Republican public philosophy of market worship, the privatization or abandonment of traditional government roles and services, and a radical individualism. The Bush philosophy represents an all-out assault on common national purpose in the United States. Government not only can't solve problems, it has no moral claim on its citizens' participation in a shared national effort to try. At the end of the day, you're on your own in a Hobbesian struggle of each against all; the government's role is to stand aside and let you fight it out.

This Republican program seeks to undermine the traditional American social contract and create what can be called an "Opt Out Society." That is, the GOP will abrogate the unwritten agreements that have defined the national bargain for three generations, such as hard work in exchange for social mobility, commitment to public institutions in exchange for growing personal freedoms, and those disproportionately benefiting from the American system disproportionately contributing to its maintenance. Instead, conservatives push to privatize social services like education, health care, and retirement, while rewarding Americans for withdrawing their support from their country, their government, their communities, their schools - and each other.

This Republican program is the true threat Democrats must fight. They must, though, avoid the pitfalls of a purely populist campaign along the lines of Al Gore's doomed 2000 effort. Successfully highlighting the yawning chasm between the president's call for American unity abroad and the GOP assault on national unity at home is the opportunity for Democrats to win that fight in 2004.

On Your Own: The Opt Out Society in Practice

The impact of the Opt Out Society can be seen across the policies the Bush administration has pursued since coming to office. These are consistently defined by three characteristics. First is market idolatry; all public policy issues are framed in terms of market choice, competition, and privatization. From school vouchers to a market for pollution credits, any outcome that results is by definition the right one, since it was freely decided by the market. Second, the politics of the Opt Out Society involve the concomitant privatization or outright elimination of government services, whether defunding public schools, encouragement of non-governmental "faith-based organizations", or the assault on a national retirement system, Social Security. Last, and most destructive during the war against terror, is the glorification of private interest and an extreme individualism that divides Americans by class and geography, and diminishes their belief and faith in their own government and institutions.

Take a look, for example, at the Bush energy policy. Formulated in secret (an approach for which Bush ultimately paid no political cost, unlike the Clinton administration's sorry experience with health care in 1993/4), the Bush/Cheney program merely rewarded producers without reform. Early on in the spring of 2001, its staunch support for market deregulation at any cost led the Federal Energy Regulatory Commission to reject California's pleas for price caps, an investigation into key companies like Enron or Duke Power, or any other market intervention. That we now know that Enron did in fact rig prices and limit energy supplies during the California blackouts, as then claimed by Gray Davis, Barbara Boxer and Dianne Feinstein, was due only to Enron's malfeasance against its shareholders becoming public. (Gray Davis' recall and replacement by Arnold Schwarzeneggar in October 2003 was a bitter irony, as it was largely the result of the failed deregulation policies of his Republican predecessor and a GOP legislature.) At no point before or after September 11 was energy independence viewed as a national priority or vital issue of national security. ANWR would be opened to drilling as one means of expanding domestic oil production. Bowing to its allies in the energy and automotive industries, the GOP would not countenance raising fuel efficiency standards even as a national security measure.

The Republican approach to health care too reflects its Opt Out philosophy. Heading into the election of 2000, the GOP was touting private Medical Savings Accounts (MSAs) to address the issues of rising health care costs and 41 million uninsured Americans. By offering tax deductions or credits to individuals setting aside funds each year for their own health care, the GOP would create incentives for generally younger, wealthier and healthier Americans to withdraw from larger insurance pools, while minimizing their own expenditures on "unnecessary" health care. The social impact, of course, would be higher premiums for Medicare, Medicaid and employer-funded health programs, as individuals left in these plans would be older, sicker and more often requiring long-term care. The president's initial prescription drug plan for seniors proposed in the fall of 2002 showed the same approach; the new benefit would be provided only to those opting out of Medicare, and instead putting funds into the hands of private insurers. Congressional Republicans did bow to public pressure on this point, but they won the war by building privatization of Medicare into the final bill in late 2003. Once again, the Republican message: you are on your own. The government has no responsibility to you, and you certainly have no responsibility to your fellow citizens.

As would be expected of a Republican administration, the Bush program for economic growth is its most naked and cynical. Coming to office proclaiming "it's your money", the Bush tax reform program has poured money into the hands of the wealthiest Americans who need it least. With unemployment hovering at 6% and 2.5 million jobs having evaporated in his term, Bush' s attack on the estate ("death") tax, progressive rates, and capital gains and dividend rates promises to empty government coffers and guarantee a mountain of deficits for years to come. (Only the $300 income tax rebate, advocated in 2001 by Senator Lieberman and other Democrats, offered any resemblance to near-term economic stimulus.) With his $350 billion "compromise" tax cut of May 2003 and his demand in the 2004 State of the Union speech that they be made permanent, Bush seeks to continue the administration's unapologetic policy of upward income redistribution. The sheer cynicism of that policy is exceeded only by the President's laissez-faire hypocrisy when it comes to steel tariffs and agricultural subsidies. In any event, as with Reagan and Bush the elder before him, Bush will leave a legacy of deficits that jeopardize economic growth and a government starved of funds for addressing the major challenges facing the nation.

Education reform is perhaps the most dramatic example of the Bush administration's belief in undermining public institutions and rewarding citizens for withdrawing their support as well. School vouchers represent the ultimate application of the market metaphor to public policy, as parents-as-consumers purchase educational performance as a product for their children. That there are other non-market considerations in educating our children (creating a sense of community, introducing students to others of different races and classes, inculcating American and democratic values) is irrelevant to the GOP; test scores are the only product in the market for education. Despite the administration's setback in 2001, victories by voucher proponents in the Cleveland Supreme Court decision, Colorado, and Washington, D.C. mean the threat of "School Choice" to public education is only just beginning. In essence, Republicans are saying to Americans, "this is not about our children; only be concerned with education of your own child. You have no obligation or responsibility to anyone's family but your own." That this encouragement to Americans to withdraw their support from common, public schools dovetails nicely with social conservatives' advocacy of parochial school education should come as no surprise. America's children are not just being left behind; they're being left in the dust.

The Opt Out philosophy also extends to the Republican program for retirement security. Social Security privatization has been a centerpiece of the president's program since his days as candidate. Despite the enormous success of the Social Security program in eradicating poverty among senior citizens, the Bush administration's clear message to Americans is that the only retirement issue of concern is your own. The Bush plan of 2000 allowing Americans to invest up to 16% of their current Social Security taxes is not only risky to investors (as the Dow dropped by a third and the Nasdaq by 75% in three years), but compromises the soundness of the program's financing by withdrawing $2 trillion from the Trust Fund over 10 years. That money for today and tomorrow's retirees has to come from somewhere; that's the price of "opting out." The administration would not consider any reform alternative other than the private market, such as means testing, progressive tax rates (perhaps as part of general revenue) for social security, or even a government-managed program of retirement investment options for participants. Yet again, the clear message, especially to younger workers, is "you are on your own, we are not in this together."

The Bush agenda extends its pervasive belief that Americans should not support common endeavors, and withdraw both their faith and their funds from their government to other aspects of public policy, both large and small. Environmental policy, media consolidation, and "faith-based" social services are clear examples. The "Clear Skies" program uses a regime of emissions "shares" to allow individual companies to skirt pollution limits previously in place under the Clean Air Act. The impact on Northeastern states from coal-burning power plants in the mid-west will be non-trivial. "Healthy Forests" and "Fair Use" rules extend the rights of logging companies, mining firms, farmers and herders to extract profits from public lands with limited restrictions, all for prices well below market rates. The attack on public goods is accompanied literally by an attack on the public good, the FCC's endorsement of corporate media consolidation being only the most recent. Further, the $8 billion federal office of "Faith-Based Initiatives" privatizes social service functions under the auspices of religious and sectarian groups that may discriminate against both potential employees and beneficiaries. (To not fund such groups, conservatives say, would be "discrimination against religion.") Never one for irony, President Bush might do well to consider that the Taliban was a faith-based organization.

At a time of war and threats to national security, the Opt Out Society championed by President Bush and the congressional GOP undermines national unity and the American social contract. Its vision of American society is a lonely and impoverished one. It tells Americans that they have few obligations to their government and even fewer to each other. The Republican notion of community is barren and empty, a modern version of Hobbes' war of each against all. The Opt Out Society encourages and rewards Americans for separating themselves from any one else not like themselves. From gated communities seeking tax exemptions and school tax breaks for the elderly to Internet communities of the like-minded and valet parking at public venues, it is 21st century secessionism, the nightmare of Robert Putnam in Bowling Alone. Americans have no commitment to each other for education, health care, retirement or virtually anything else. At a time of external threats to the United States, the Republican program clearly says we are not in this together. That Americans believe we are in this together can be the key to victory for Democrats in 2004.

Branding the Opt Out Society

Democrats in 2004 would do well to emulate two successful approaches of their opponents in branding the GOP and its Opt Out philosophy. In 1994 with Newt Gingrich's "Contract with America" and again with the 2000 Bush campaign, the Republicans succeeded in both labeling the Democrats as outside the mainstream while effectively positioning their own program in easily understood, hard hitting and, at least superficially, universally appealing sound bites. The result was and continues to be GOP domination of the terms of debate, especially through the filter of the media. The Democrats have a golden chance to do the same in 2004 with the Opt Out Society, an opportunity that they must not let pass by.

For an illustration of the effectiveness of GOP branding, Democrats can look first to Newt Gingrich's stewardship of the 1994 mid-term elections. While the "Contract with America" failed as a policy program (ultimately running aground with the GOP effort to shut down the government in 1995/6), it was immensely successful as a marketing platform for the 1994 GOP congressional candidates. Gingrich provided talking points, a clear vocabulary and firm message discipline to GOP candidates. As early as 1990, his memo "Language: A Key Mechanism of Control" provided a set of terms for consistently labeling the Democrats, including "ideological, endanger, lie, bureaucracy, shame, sick, crisis and liberal" among the dozens listed. In contrast, the Republicans were portrayed as supporting "freedom", "choice", "liberty," "family", "empowerment," and having "vision" and being "moral." His mantras of "unfunded mandates" and "devolution" were decisive not only in the 1994 elections, but in shaping a new wave of phony federalism that drove programs and funding to the states for implementation (or eventual abandonment, as the crippling state budget deficits of 2003 show).

The Bush campaign and administration have been even more spectacularly successful in dominating the terms of debate, especially in the wake of September 11. The GOP has perfected the craft of branding the Democrats, programs opposed by Republicans and initiatives they themselves espouse using two techniques. First is the Unopposable Utterance, messages that dominate policy debates because they are, on their face, virtually unopposable. Consider the "Death Tax" (for repealing the estate tax), "Marriage Penalty" (for lowering tax rates on married couples), "No Child Left Behind" (the Bush education program), "Faith-Based Initiative" (for diverting funds for social programs through sectarian groups), "School Choice" (for school voucher programs), or even "Partial Birth Abortion" (creating a slippery slope against reproductive rights by banning one rare though viscerally gruesome abortion method). The attack on "Double Taxation" (the complete elimination of taxes on dividend income) failed only due to the growing budget deficit. In a world of 20-second sound bites and media information overload, these and other misguided or dangerous policies sound like common sense public policy to many voters.

Perhaps even more effective (and, of course, more insidious) than the unopposable utterance is the second hallmark of Bush era communications strategy - Opposites Attract. Here, the administration masks unpopular policies with names that convey the opposite of their intended effects. These include "Paycheck Protection" (attacking the ability of unions to raise membership funds for political activity), "Clear Skies" (which, in effect, rolls back environmental protections of the Clean Air Act), "Healthy Forests" (providing incentives for the logging industry to expand its activities on public lands), "Fair Use" (giving local residents and large businesses carte blanche to use and extract value from national park land), among others. President Bush's defeat on oil drilling in ANWR may have been in large part tied to the administration's failure to brand that initiative as its polar opposite.

Heading into the 2004 elections, Democrats have a unique opportunity to regain the edge in public debate by portraying the GOP's Opt Out Society program for what it is and for consistently contrasting it with the national unity needed in a time of war on terrorism. At every turn, Democrats must repeat the mantra of "Americans together at home, together abroad." President Bush and the Republican Party instead send a clear message that citizens have no responsibility to their government or to each other. From health care, education and retirement security to economic growth, basic social services and the environment, the Republican message to Americans is that each person is on his own and should maximize his or her own share in a never-ending competition of each against all.

For 2004, Democrats need a vocabulary for branding the Republican's Opt Out Society and the steadfast discipline to use it:

In 2004, as we'll see in "The Reciprocity Society in Action" below, Democrats can contrast their politics of an America united at home with a GOP program for government withdrawal and private interests run amok:

Identity Politics and the Threat from the Left

Unfortunately, Democrats cannot credibly speak of a politics of national unity and common American interest unless they make a clear break with the identity politics, multi-culturalism, and group privileges of the party's left. Democrats during the Clinton reign in the 1990's made great progress overcoming two of the three barriers to the party gaining majority status: being trusted on national defense and to provide economic growth. On cultural issues, however, the Clinton program of "100,000 cops" and welfare reform (not to mention Monica Lewinsky) has not reversed the perception that Democrats endorse a politics of "hyphenated" Americans and competing group entitlements that goes against core American values. Until that perception is reversed, there will not be, in the words of Ruy Teixeira and John Judis, an "emerging Democratic majority."

That Democrats are swimming against the tides of history and public opinion on issues like affirmative action is becoming increasingly clear. Despite the Supreme Court's compromise in the University of Michigan cases, Proposition 209 in California, the Court's Adarand decision involving government contracting, and the past rulings in University of Texas admissions reflect the rapidly changing environment. Demographic trends also show the tenuousness of group-based politics. In 2000, California became a "majority minority" state, with white residents constituting under half the population. By 2000, Hispanics surpassed African-Americans as the nation's largest minority group; by 2050, Hispanics will be a quarter of the American population.

The first battles of competing group preferences are already being fought. In San Francisco, to enable access to the city's best high schools, Asian American parents successfully sued to end a court-ordered desegregation plan that had limited any group (black, white, Asian, Hispanic, etc.) to no more than 40% of each school's students. In Los Angeles, a growing rift between blacks and Hispanics for political power and spoils has led to two sharply divisive mayoral elections (both won by white candidates). Left unchanged, the liberal program of balkanized identity politics means that San Francisco and Los Angeles are just a taste of things to come.

The Democrats' current course is a recipe for electoral defeat. Judis and Teixeira's "ideopolis" uniting suburban professionals with growing and active minority populations cannot come to pass for Democrats as long as the regime of affirmative action and group set-asides is in place. There can be no progressive coalition on tax policy, the social safety net, health care, or virtually anything else while these erstwhile allies are separated by group preferences, real or imagined. Republicans will continue to welcome the creation of "majority-minority" districts. And Democrats can be sure that there will still be Reagan Democrats and a persistent male gender gap.

Of course, Democratic social policy should be firmly grounded in the moral principles of our American republic and not mere political expediency. The evolution of affirmative action from a program of compensation for past wrongs to one enshrining diversity as an end in itself has undermined the universal nature of the Democratic message. In this conception, racial and ethnic groups are monolithic; each (black, Hispanic, Asian) has a uniquely different viewpoint and set of life experiences and values, and each member of those groups uniformly shares them. That doesn't sound like a traditional Democratic notion of universal national identity and, at a gut level, certainly doesn't sound like one to most Americans. At a time of growing demographic diversity and consistent (if incomplete) progress in the status of African Americans and other minority groups, the tenets of multi-culturalism and group identity increasingly violate deep-seated beliefs about what it means to be an American.

Democrats in 2004 must begin offering Americans a better choice than the stale debate between the racism of the right and the racialism of the left. Democrats can neither support the status quo nor trigger a return to real or de facto segregation in hiring, contracting and university admissions. Ultimately, Democrats must move to a "Post Affirmative Action" politics, trading the easy work of group preferences for the hard work of investment in education and urban development, day care, class-based programs, and other more universal approaches. As we'll see below ("The Reciprocity Society in Action"), Democrats must phase out affirmative action over time while implementing a new approach, "Open Opportunity."

A New American Bargain: The Reciprocity Society

Democrats need a new, revitalized public philosophy and politics not only to achieve victory in 2004, but also to have any hope of attaining majority status in the next decade. In contrast to a conservative Opt Out ideology increasingly at odds with the best American civic traditions, Democrats should seek to usher in the "Reciprocity Society." Characterized by shared national identity and values, commitment to common goals and public institutions, national service, mutual responsibility, and universal opportunity, the Reciprocity Society calls on Americans to renew their faith in each other and their government.

A "New American Bargain" encompassing the ideals of the Reciprocity Society would breathe new life into the American social contract. Unlike the failed populist Gore campaign of 2000 and the incomplete "New Covenant" of 1992, the Democrats' "New American Bargain" in 2004 builds on wartime national unity to modernize and cement Americans' unwritten agreements to each other, their communities and their government.

Five themes animate the politics of the New American Bargain:

• Balance Market Incentives and Market Limitations
  Since their days in the political wilderness in the 1970s and 1980s, Democrats have rightly begun to endorse market incentives rather than redistributional policies for economic growth and welfare reform, among other areas. However, the GOP's extreme, almost religious support for unfettered markets in all areas of American life is undermining the public good, as corporate scandals, media deregulation and secret energy policy attest. As Robert Kuttner pointed out in Everything for Sale, market dynamics applied to areas such as education, health care and energy often lead to socially unacceptable market outcomes. The disaster of energy deregulation in California is among the most glaring examples. Democrats must balance market incentives and market failures in public policy.
• Espouse Universal Citizenship and Identity
  Democrats were once seen as the "universal party" in the United States, advocating that the rights, privileges, and opportunities of American life must be available to all citizens. A generation after the victories of the civil rights movement, many Americans now see the Democrats as the party of group preferences, identity politics, and multi-culturalism. Trent Lott, Rick Santorum and John Ashcroft aside, the GOP has been increasingly successful in claiming the universal party mantle through across-the-board tax cuts, social security privatization, and other sound bite policies. A Democratic "New American Bargain" must restore the party to its role as advocate of universal notion of American citizenship and opportunity.
• Encourage a Politics of Aspiration and Social Mobility
  In 2000 and again in 2002, Democrats fell into the trap of being the party of the status quo. Al Gore's populist campaign ("people against the powerful") and the Democrats oppositional politics of the mid-term elections did little more than seek to protect existing benefits and entitlements for Americans seemingly frozen in unchanging class roles. In poll after poll, however, Americans consistently view themselves as occupying a higher rung of the socio-economic ladder than they in fact do. Whether this is a function of Americans' perceptions or hopes, Democratic politics must be aspirational. Democrats must be the party of social mobility, not the status quo. No one wants to remain working class, especially if "they work hard and play by the rules."
• Renew the Public Interest and the Common Good
  In both public policy and in public rhetoric, Democrats must fight the GOP opt-out philosophy, calling on Americans to renew their commitment to the public interest and the common good. Especially during a time of war, Democrats can call on Americans to come together to support, reform, and improve their public institutions, from schools and public lands to energy supplies and health care system. In contrast to President Bush's support for out-of-control private interests, Democrats should ask Americans to rededicate themselves to public institutions and the common good.
• Recognize Both Individual Rights and Shared Responsibilities
  Democrats have long been the viewed as the party of civil rights and protectors of individual liberties. At the beginning of the 21st century, the Democrats must also be the party of shared responsibilities and mutual commitment. President Bush can't and won't speak in this language; Democrats must. From mandatory national service and health care reform to retirement security and common public schools, Democrats must articulate this bargain of rights and responsibilities.

The Reciprocity Society in Action

In 2004, Democrats must answer the GOP assault on national unity with a program based on reciprocity, responsibility and opportunity that calls on the best in Americans and their government.

On national security, Democrats must not only pass the threshold of credibility, they must demonstrate clear leadership compared to the GOP. There is no better way to do this, substantively and symbolically, than through national service. While the volunteer army currently seems sufficient to fight foes abroad such as Afghanistan and Iraq, the same cannot be said of domestic security at home. The Federal government should create a Home Guard, drafting at least 250,000 Americans between the ages of 19 and 22 for homeland defense. Funded and managed by the Department of Homeland Security and assigned to relevant federal and state agencies (such as the Coast Guard, Transportation Safety Administration, Immigration, and Border Patrol), the members of the Home Guard would police borders, guard ports, staff airport checkpoints (replacing the TSA personnel), and monitor major events, energy facilities and transportation hubs. Home Guard members assigned to police or paramilitary roles would serve one year; those opting for non-frontline or non-first responder positions (such as teaching, health care, computer or communications) would serve two.

The Home Guard would not only greatly enhance domestic security by relieving the Pentagon and the states of the expenses of manpower and logistics. It would also help create an ethos of national service and shared sacrifice among younger Americans, men and women alike. It would provide, as Robert Putnam describes in Bowling Alone, "bridging social capital" that cuts across racial, ethnic, economic and religious lines. With parental status perhaps the only exemption, the wealthy and the working class would meet in service to their country. The price tag would be non-trivial, perhaps 10 to 20 billion dollars a year (with some savings as the 55,000 TSA airport screeners are replaced by draftees).

Energy policy presents the Democrats with a major opportunity to differentiate themselves from the GOP with a program centered on national security, rather than environmental, goals. A USA Energy Act would focus on energy independence to both limit the U.S. vulnerability to economic dislocations due to OPEC action and provide greater freedom of action in foreign policy in the Middle East. A centerpiece would be federal subsidies for alternative energy sources, potentially taking the form of a venture capital fund to help draw private sector investors to wind, solar, hydro and other options. (President Bush's support for hydrogen-powered cars, though another cynical political move, is not without merit.)

Conservation must be an essential component as well of a USA Energy Act. An "energy conservation credit" would allow businesses to claim tax benefits for achieving targeted year-over-year reductions in energy consumption. A "gasoline price floor" would enable the federal government to add taxes when the average national market price of gasoline dropped below a target level (say, $1.50 a gallon). Perhaps most controversial for consumers and the auto industry would be a Federal "auto fuel consumption surcharge" of (or starting at $500) on purchases of new vehicles failing to meet a target level for fuel efficiency. Consumers would still have the freedom of choice to own gas-guzzling SUVs; they would just have to pay their fellow Americans for the privilege. It's a classic case of doing good by doing bad.

A national security energy policy would provide a stark contrast to the market deregulation approach of the Republicans and the at times rigid, irrelevant environmentalism of the Democrats. Obtaining secure, affordable energy sources is not an outcome that can be assured by the market; the disaster of GOP energy deregulation in California and the Enron fiasco should make that clear to all. But at a time of war, opposition to oil drilling in ANWR or the president's policies for air pollution standards does not constitute an energy program. Of the 2004 Democratic candidates, only Joe Lieberman's "Declaration of Energy Independence" program seemed to reflect the political and security considerations in play here.

To fund these and other programs, Democrats will need a plan for economic growth and sustaining federal government tax revenues. For starters, the Bush tax cuts of 2001 and 2003 must be reversed; their $2 trillion price tag is neither affordable nor justified. Deficits during a time of war are to be expected; tax cuts are almost unheard of at best and dangerous at worst. A means-tested or one-time tax rebate capped by income 2003 might make sense for small-scale stimulus. In addition, Washington should expand the incentives for both pure R&D and new business start up by making the federal research and development tax credit permanent and loosening the intellectual property rules governing the commercialization of university research. Tax credits for information technology purchases of up to 20% (also suggested by Senator Lieberman) could help boost the growth of a stalled "new economy."

Central to any plan for economic growth is the development of America's human resources. Day care is essential for America's working families; it constitutes not only a major financial burden but limits the flexibility of parents to seek a broader range of jobs. A "Children First" program of means-tested day care vouchers could replace the new $1000 a year per child tax credit. These vouchers, perhaps $1,000 to $2,000 a year, could be applied for children under age five to any accredited day care provider, whether public, private or even religious in nature. In addition, "Continuing Education Accounts" would allow Americans to receive either a tax deduction for higher education and retraining (up to $10,000 a year), or annual tax credits for contributions to a tax-deferred "personal education account."

The crisis of rising health care costs and woefully inadequate coverage can also be addressed in a new American Bargain. As described above, the Opt Out approach offered by President Bush in his 2004 State of the Union by way of Medicare privatization, medical savings accounts and association health plans (AHPs), will only make the situation worse. The two pillars of a Democrat health care program should be child coverage and aggregate buying power. First, the repeal of the Bush tax cuts should allow Washington to fund "Healthy Children", a successor program to CHIPS ensuring all American children under age 18 are covered by health insurance. Just as important, Washington should allow private employers and individuals to leverage the buying power and scale of the Federal government by purchasing insurance through the same plans offered to federal employees. Democrats should also tilt the balance of power from suppliers to buyers of prescription drugs by encouraging state, regional or even national "Drug Coops" along the lines of the program now being implemented in Maine (focusing on 300,000 uncovered by Medicare or Medicaid). This would work in much in the same way that Wal Mart virtually dictates the prices it will pay to it suppliers by virtue of its massive scale and buying power. Public interest drug coops would pose a significant counterweight to the pricing power of the pharmaceutical companies and retail drug chains.

As described above, Republican education policy is one of the cornerstones of their Opt Out philosophy. Democrats must respond with a program of reform that cements the American commitment to public schools. First, America must act to ensure the greater resources for urban schools, where per pupil spending should exceed and not merely match statewide averages, given the health, nutrition, safety and social services these schools must provide. This can be accomplished by providing federal funding to the states to help achieve school district funding equalization. In addition, Democrats should encourage teacher "Challenge Bonuses", essentially the equivalent of hazard pay, for those choosing to teach in under performing, often dangerous inner city schools. A "Tomorrow's Teachers" program could also provide loans, grants or tax credits for qualified college students who commit to teaching careers for at least five years following graduation. Last, the federal government should help states achieve dramatically higher levels of school technology infrastructure, including broadband Internet access in all public K12 schools. As the Progressive Policy Institute noted in 2002, Massachusetts, a state with a highly educated workforce, ranks 40th in educational technology.

As Kuttner notes, the market metaphor simply is not appropriate for education, where socially desirable outcomes (producing better American citizens and more tightly knit communities) cannot be merely measured by test scores. If parents want to opt out of public institutions by home schooling their children or sending them to private or parochial schools, that is their right and their choice. Government policy should not reward them for doing so.

A New American Bargain in all of these areas, from education, energy and the economy to health care, national service and tax policy, would be incomplete without a new conception of national identity and a renewal of universal, shared public responsibilities. Democrats must move beyond their endorsement of affirmative action and multi-culturalism to a new "Open Opportunity" program while recognizing the fundamental perceptions of fairness and equity by all Americans. As Gunnar Myrdahl, Robert F. Kennedy and Martin Luther King Jr. all feared in the 1960s, group preferences would almost surely divide potential partners and prevent a true progressive politics and national unity.

In the New American Bargain, affirmative action would be phased out over time, with preferences in government contracting ending in five years, hiring in 10, and higher education in 15. Ending the affirmative action regime immediately, however, would have socially unacceptable consequences for minority representation, as many institutions, as shown by the California Berkeley law school, would experience a return to de facto segregation. This is all about life chances; as affirmative action is phased out, the hard work of creating opportunity for all Americans would commence with the transition to "Open Opportunity."

An Open Opportunity program begins with expanded outreach to minority and economically distressed communities. From the promotion of educational opportunities, mortgage assistance, small business loans and "Grameen-style" banks (modeled on small, revolving self-employment loan programs in developing nations), the federal and state governments should substantially increase efforts to recruit and evangelize individuals who could potentially benefit. The difficult and expensive work of public education reform described above is also central. Expanded scholarship programs based on need (family income and wealth) would be essential. In every case, Open Opportunity benefits would be class-based, and not contingent on race or ethnicity, helping to ensure their universality and broader public support. As Richard Kahlenberg noted in his book The Remedy, while class is not a true proxy for race and could not assure the same numeric outcomes as today's affirmative action regime, it offers the prospect to bridge the cleavages of group preferences over time. Open Opportunity, would, however, mean the end of the divisive affirmative action calculus Michael Kinsley highlighted in choosing between a black doctor's child and the kid of a white Appalachian coal miner.

In his book A New American Nation, Michael Lind describes an American identity that is not static and unchanging over time, but continuously redefined and almost infinitely adaptable as individuals from different countries, races, classes and ethnicities contribute to an ever-evolving culture. What should be unchanging is the commitment of all Americans to a common set of ideals, to reciprocity of rights and privileges in exchange for shared responsibilities to their nation and each other, to a new American bargain. Republican policies instead encourage us to opt out and go it alone; Democratic orthodoxy sees only group membership. During this dark time of the war against terror, it's worth remembering that we're all in this together.