Emanuel's 'New Deal for a New Economy'

by Lesley Politi on November 7, 2008

Emanuel’s ‘New Deal for a New Economy’

It was months ago–back when Hillary Clinton was still inevitable as the next president of the United States–that Rahm Emanuel first laid out his “New Deal for the New Economy.” He talked about it again in his speech at the Democratic convention. I suspect it has been well poll-tested and is likely to find its way to the heart of Barack Obama’s domestic agenda:


Currently, 47 million Americans are without health insurance. For Americans lucky enough to have health insurance, costs are skyrocketing. Businesses that do the right thing and provide health insurance to their employees are finding it difficult to afford its ever-increasing cost.

Washington needs to take action. Our ultimate goal should be a plan that provides universal health care. If that’s not possible, we should begin with universal coverage for children and early retirees. Expanding health care to more children through the State Children’s Health Insurance program and allowing early retirees to buy into Medicare would give millions of children and retirees the affordable care they need at little to no additional cost to taxpayers…

Our government must invest in new technologies and alternative energy sources that will make our nation more energy efficient and save money for consumers and businesses. New investments in energy technologies could also create new industries that will create new jobs and contribute to or even redefine the way we do business. I believe that new energy technologies, the use of new sources of energy and improved conservation efforts have similar economic potential to do what the Internet and the computer did for our economy over the last 20 years.

The third plank of the New Deal is savings. In the past two years,America’s personal savings rate reached its lowest level since the Great Depression, and fewer Americans can look forward to receiving a guaranteed pension when they retire.

I think we can increase savings and improve retirement security by creating Universal Savings Accounts. Like 401(k) plans, the account would supplement, not supplant, Social Security. Employers and employees would contribute 1 percent of paychecks on a tax-deductible basis and workers could make additional contributions if they chose to do so. These accounts would encourage savings, give workers more control over their economic future and provide more peace of mind when it comes to their own retirement.

Finally, the New Deal for the New Economy would not be complete if we fail to give the next generation of workers the training and education they need to compete. In an era in which you earn what you learn, America has failed to open the doors of colleges and universities to more students. Instead, the cost of a college education has skyrocketed.

To succeed, we must reverse this trend and fundamentally alter public education in our nation. Job No. 1 is making college more affordable. In 2007,Congress passed the College Cost Reduction and Access Act, which included the largest expansion of student aid since the GI Bill of Rights.


Pledging to provide health insurance for early retirees and children “at little to no additional cost to taxpayers” surely tested well in focus groups, but how much will it actually cost? How will voters react when they actually have to pay the bill? And will Obama be able to sell his health plan as anything other than a step toward government-run health care?

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