Mike & Co. —
This past weekend in Orlando, the Democratic Platform Committee advanced a final draft of the party’s 2016 official platform, to be ratified at the upcoming Convention in Philadelphia. The platform has been described by many as about as progressive and precedent-setting in several areas as any in recent history.
In this update, we outline the principal themes and vision of the platform, highlight policy areas that break new ground, and cast light on ambiguous provisions begging further analysis.
The platform has a progressive message and a positive tone, conveying the economic strides made in the past eight years with an eye toward further improvements in the future. The platform promises to defend the average American against the depredations of Wall Street; to protect, implement, and expand the Dodd-Frank Act; and to maintain the mission of the Consumer Financial Protection Bureau. The plan aims to support the middle class through increased loans for small and medium-sized enterprises (SMEs) and tax reforms.
The theme of income and wealth inequality is central and is pursued largely through tax reforms:
• eliminate breaks for special interests, like oil and gas companies, and the very wealthy
• impose a multimillionaire surtax
• target tax relief towards the middle class
• endorse corporate tax reform that incentivizes companies to remain in the U.S.
The platform contains several policy proposals not included in previous Democratic platforms. Among the most striking is the commitment to a $15 per hour minimum wage, indexed to inflation. Unions strongly endorsed this measure, though HRC supported minimum wages reflecting the disparity in costs of living across the country.
The platform also includes a financial transaction tax (FTT), which imposes a levy on securities sales. The goal of the tax is to reduce excessive speculation and high-frequency trading. HRC has already backed a tax that would specifically address high-frequency trading. While the proposal has not been included in a modern platform, the FTT idea is not new, and the U.S. imposed such a levy from 1914 to 1965.
Ambiguities in the Text
There are ambiguities present in the text of this year’s platform that require further examination.
While the financial transaction tax, it is unclear how far Democrats officially support taking the tax and, therefore, if the current language is completely consistent with HRC’s interpretation of the proposal.
With regard to proposals on carried interest and Section 162(m) bonus deductions, the draft does not explicitly address these issues by name while it does mention the TFF. The platform states the party’s intention to “close egregious loopholes” enjoyed by the wealthy, a category to which carried interest and Section 162 (m) would apply. Both proposals are widely supported by Democrats and have already won over some leading Republicans.
One of the most consequential uncertainties concerns not policy but the qualifications of executive branch personnel. The language of the platform seeks prevent former Wall Street executives from serving in regulatory positions overseeing their relevant sectors. The ostensible goal of the proposal is to end the revolving door between Wall Street and economic and regulatory agencies. The provision states that “personnel is policy,” and supports only appointing officials “who are not beholden to the industries they regulate.”
Some view the inclusion of this language as an attempt to limit the influence of Wall Street in a potential HRC administration. As Jared Bernstein, former chief economist adviser to Vice President Biden, says, knowledge of contemporary markets on the part of former Wall Street executives shows they shouldn’t be disqualified because they worked there.