Election ’06: What Will Change in the Economy?For Immediate Release: Wednesday, November 8, 2006
Contact: Lynn Erskine 202-293-5380 x115
Washington, DC: The Center for Economic and Policy Research today released the following analysis of the election's impact on the economy.
Election '06: What Will Change in the Economy?
By Dean Baker
The 2006 Democratic electoral victory substantially alters the political environment around several important economic issues. Democrats in Congress can be expected to follow through on several policy items featured in their agenda during the campaign. Their victory is also likely to knock several items off the Bush administration's agenda.
Key Democratic Agenda Items
1. Reforming the Medicare prescription drug benefit
Democrats can be expected to follow through on their pledge to allow Medicare to offer its own drug plan in which it negotiates prices directly with the pharmaceutical industry. This is very popular with the public, which means that Senate Republicans will be reluctant to filibuster the measure, and President Bush will feel considerable pressure to sign it.
See CEPR's report, Savings from an Efficient Medicare Drug Plan
2. Raising the minimum wage
The Democrats have pledged to push through a minimum wage increase and are virtually certain to make good on this promise. An increase in the minimum wage is very popular as demonstrated by both polling data and the victory of 6 ballot initiatives that raised state minimum wages.
See CEPR's report, The Impact of Proposed Minimum Wage Increase on Low-Income Families
3. Initiatives to extend health care coverage
The rising cost and insecurity of health care insurance continues to be a major national concern. The Democrats are likely to put forward proposals that will at least put them on record as doing something on the issue. These proposals could include measures that would extend coverage to more children, for example by expanding SCHIP, or lay a basis for structural reform, such as allowing employers and individuals to buy into Medicare.
See CEPR's Health Care page.
Items Off the Legislative Agenda
1. Privatizing Social Security
President Bush has said that he wants to bring back his plan to privatize a portion of the Social Security system. He clearly lacks the ability to get this through the new Congress and members of his own party would almost certainly rebel if he were to try.
See CEPR's Social Security page.
There is likely to be a stalemate over the future of President Bush's tax cuts, including the repeal of the estate tax. He will almost certainly veto any Democratic proposals to reverse the tax cuts, however, the Democratic Congress will not go along with extending them beyond their 2010 expiration date.
See CEPR's Federal Budget/Taxes page.
3. Far-reaching trade proposals
Many of the Democrats elected made the Bush (and Clinton) administration trade policy a major issue. The Congress was already unsympathetic to new trade agreements. It will be much less friendly following this election.
See CEPR's Globalization/Trade page.