Next Social Contract

Many Americans appear to be doing fine. They’ve got nice cars. They’ve got good jobs. They’ve got families. But they also have an abysmal savings profile and mountains of debt. The slightest disruption — a job loss or health incident — can and does destroy the perceived image of American middle class harmony.

The initial round of presidential primary debates leaves no doubt that the presidential horserace has already broken from the gates. While some may lament the early departure -- given that votes will not be cast for another 8 months -- the absence of incumbents vying for each party’s nomination has created a wide open race, one where the stakes are remarkably high.

America’s financial-aid system provides too much taxpayer support to banks that make college loans, asks too little of students who assume them, and burdens families with too much debt. We need to rethink the system in order to improve college access and affordability. Federal higher-education policy largely fails to reward rigorous college-preparatory work in high school. It penalizes students who hold jobs while in college.

In the aftermath of Hurricane Katrina, which struck the Gulf Coast with such ferocity in late August 2005, Americans were shocked by the broadcast images of desperately poor people left to fend for themselves. The depth and consequences of poverty in America, normally hidden from public view, had once again become the subject of debate and national soul-searching. And yet, a year and a half later, the subject of poverty has fallen so far off the public’s radar screen that President Bush did not give it a mention in his recent State of the Union Address.

American politics is in a time of upheaval, as old ideological lines dissolve and the changing economy demands a rethinking of the social contract. Recently, several prominent thinkers have proposed new policy and political syntheses that marry approaches usually favored by the right with solutions from the left.

The recent turnover in Congress, combined with a wide open presidential election cycle, creates a rare opportunity to bring new ideas into the political process. The spirit of this new era will be captured by those-from either party or no party-who embrace innovative yet pragmatic solutions to the foremost challenges facing our nation. We offer this collection of Big Ideas as fuel for an overdue bipartisan debate about how to update our national policies for the common good.

The greatest challenge in politics is to understand when a political era is closing and the door to a new one is ready to be opened. Thirty years ago, a small band of conservatives understood that what they called the era of “tax and spend” -- in which government grew inexorably on a tide of invisible tax increases through Republican and Democratic administrations -- was ready to be challenged.

Democrats are in a bind when it comes to their domestic economic agenda. They have promised a number of new and costly initiatives such as fixing the Alternative Minimum Tax, providing middle-class tax relief, and increasing spending on homeland security and education. But they have also made a commitment to fiscal responsibility. So how can they deliver on their promises without opening themselves up to the old "tax and spend" label? Reforming tax entitlements -- a large, mostly under-the-radar part of the federal budget -- might just give them a way out of their predicament.

In recent years, the idea of promoting widespread property ownership in the United States by means of public policy has enjoyed a renaissance across the political spectrum. George W. Bush and other American conservatives have borrowed the term "ownership society" from Margaret Thatcher's Britain and employed it to justify a range of proposals from the partial privatization of Social Security to individual health savings accounts.

Over the past generation, the economic risks American families face have increased substantially. Yet public programs have largely failed to adapt to these new and newly intensified risks, and private workplace benefits have eroded. As a result, Americans increasingly find themselves on an economic tightrope, without an adequate safety net if, as is ever more likely, they lose their footing. This tightrope both creates anxiety about the future and causes hardship when families do lose their balance.