Keeping the Promise of America: Creating a New Social Contract for America's Working Families

Manchester Public Library, New Hampshire, Thursday, December 18, 2003

The following text as prepared was delivered by Governor Dean in New Hampshire at the Manchester Public Library this afternoon:

About two years ago, I began my campaign – as all candidates do – here in New Hampshire and out in Iowa meeting with small groups of voters to talk and to persuade, but mostly to listen. I ate with Iowans in their diners, gathered with families in their living rooms in New Hampshire, toured factories and farms, and spoke in town halls.

I engaged in one of the great traditions of American presidential politics – listening – really listening to the people at the heart of America.

I heard their hopes and their fears. They shared their concerns and their dreams.

And what I heard truly surprised me. A level of anger and despair I never imagined. About jobs. About working conditions. About making ends meet. About the stress of day-to-day life.

More than anything, I was surprised by the outrage of working Americans at the corporations that employ them and toward the government that serves them. They sense that neither their employers nor their government really care about their problems. That all that matters to business is the bottom line and all that matters to their elected representatives is re-election and collecting campaign contributions.

It became clear to me that there is a fundamental disconnect between the working people of America, corporate America and our government. The social contract that binds us has frayed and stands in desperate need of redefinition and repair.

More than two hundred years ago, the American people launched a new era of self-government. In the words of the Constitution, “we the people” committed to each other to “promote the general welfare, and secure the blessings of liberty to ourselves and our posterity”.

These words created the promise of America – a pledge by a people to uphold the principles of justice and fairness.

At the heart of those principles was the promise of equal opportunity for all in the land of opportunity. The land where a person born with little can grow to great wealth. The land where the children of immigrants can rise to the highest offices.

I know from the families I’ve spoken to here in New Hampshire and out in Iowa that for too many Americans, the promise of America today is largely unfulfilled.

I believe that fulfilling that promise today requires a new social contract.

The starting point for this new social contract must be a fresh understanding of the way American families live today. A lifestyle that is far different from the family of even a few decades ago.

In 1960, one parent was at home in 70% of all families with children. Today, it’s just the opposite. 70% of today's families with children are headed by either two working parents or a single parent who works. And they’re working harder and longer.

Parents have 22 fewer hours a week outside of work to spend with their children than they did just 35 years ago.

Today’s economy is different as well. One quarter of all American workers are temporary employees, self-employed or part-time, employed in jobs with little security, often without health insurance or pensions.

Too many workers reach 45 or 50 years of age and find that the pension they counted on is greatly reduced or even gone for good.

The average family health insurance policy now costs about $670 a month. To put that in perspective, the average family of four spends $750 a month on its mortgage. The way things are going, the average family without employer-sponsored benefits will soon be paying more for health insurance than on the family home.

Families see their debts increase and wonder how they will pay for their children’s education or their own retirement. They know too well that a single tragedy – the loss of a job, a divorce or the illness of a parent – could spell the end of all their plans for the future.

At the start of a new century, as we shift from the industrial to the information age, it is once more time for “we the people” to form a more perfect union. It is time for us to spell out a new social contract – a fundamental renegotiation of the rights and responsibilities of the critical actors in the American economy: families, corporations and government.

The New Social Contract

Seventy years ago, the Democratic party of Franklin Roosevelt helped create a new Social Contract for American families. In the face of unprecedented economic hardship, FDR assured families certain basic freedoms. And he created Social Security and a range of programs to provide jobs and opportunity to those who earned them by working or raising children.

Today, it is time for a new vision for the Democratic Party and for a new Social Contract for America’s families.

Our party must offer a new vision that speaks to working families. Working families who make just too much to qualify for assistance, but not quite enough to make ends meet.

Republicans seek to dismantle the basic building blocks of our nation’s social contract with working families. They hope to privatize Social Security, dismantle Medicare, and to end public education.

Republicans claim to be helping average Americans with their tax cuts.

The Bush Tax

But let’s look at the facts. The average wage earner did get a few hundred dollars back. But the refund didn’t come for free.

President Bush never told you about the “Bush Tax”. He never mentioned that over the next six years the typical American family will take on $52,000 more in its share of the national debt. That’s a part of the “Bush Tax”. But there’s a lot more.

Take a look at your property taxes. They probably went up. In New Hampshire, property taxes went up an average of $270 per family last year. That’s part of the “Bush Tax”. Or look at your state budget. Is it in crisis? In most states, it is. That’s part of the “Bush Tax”, too.

Getting fewer services and paying more for things like state college tuitions or special education – that’s the consequence of the “Bush Tax”.

The “Bush Tax” is huge – many times greater than most people’s refunds. And it’ll be here for a long time to come. Just add the “Bush Tax” to all the other things the President never told us.

Some Democrats have accepted the Republican notion that the Social Contract cannot be preserved, let alone made stronger.

While Bill Clinton said that the era of big government is over, I believe we must enter a new era for the Democratic party – not one where we join Republicans and aim simply to limit the damage they inflict on working families.

I reject the notion that damage control must be our credo. I call now for a new era, in which we rewrite our Social Contract. We need to provide certain basic guarantees to all those who are working hard to fulfill the promise of America.

First, every American family must have access to affordable health care. The centerpiece of my campaign is a health care plan that gives every American the right to the same private health insurance that Members of Congress and federal employees have, at reasonable rates.

A refundable tax credit will help lower-income people afford the premiums. It’s health care that stays with you and goes with you, whether you work or not.

Second, every American family must have access to affordable quality child care. Right now, only one in seven working poor families do. American families have come to recognize that child care is no luxury item – but a necessity for parents who work and an enormous benefit to children who can start school ready to succeed.

The new Social Contract respects our responsibilities to care for our children. I propose that we make the investment necessary to fully fund Head Start, offer pre-K to every four year old, and expand other child care options to almost a million and a half more children. I call it Investing for Success.

Third, every American family must know that their child will be able to afford to go to college. The cost of college should not be an obstacle that prevents any child from working hard and finishing school.

The new Social Contract acknowledges our responsibility to educate our children. That’s why my College Commitment guarantees $10,000 a year in college financing for every student in a mix of grants and loans that depends on family finances. No one will ever pay more than 10 percent of their income after college to repay their loans. And every loan will be fully paid off after ten years. Those who give back to their communities – working as nurses, teachers, policemen for instance – will pay even less.

Fourth, every American family must know that their retirement will be secure. The Democratic agenda here must be broader than simply preserving the critical commitment of Social Security.

We must offer working Americans new incentives to save for the future. The Republicans and President Bush may be planning to propose yet more benefits to protect the income and savings of the wealthiest Americans. But I want to target workers and middle class families instead. I will soon propose a new savings program that will help millions of Americans save for their retirement.

Taken together, these are four new rights the Democratic Party must establish as its new social contract with the families of America.

But no contract comes solely with rights and without responsibilities. Each party to this new social contract must fulfill some basic responsibilities.

American citizens have a responsibility to participate in our country’s civic life. That duty starts with the vote. It continues in our neighborhoods and communities – through an ethic of service. That service is promoted through efforts like Americorps in which government provides incentives to serve for young people.

But more importantly, it is through places of worship, charitable organizations and schools at the community level – and on a voluntary basis. Helping neighbors when newborns come home from the hospital, participating in volunteer fire departments, pitching in when disaster strikes. When we lose that tradition, when we forget our responsibilities to each other, we endanger the promise of America.

Corporations too – as fundamental partners to the Social Contract – must recognize and fulfill certain basic responsibilities. And the new social contract must redefine the role of government in establishing appropriate limits for corporate behavior.

The American economy is, of course, the engine of our society, providing jobs and opportunity to American workers. But, today, economic power is concentrated in too few hands, and not very clean hands, at that.

The Boards of Director of too many corporations are governed by the buddy system; the compensation of some top executives could put 19th century Robber Barons to shame.

Economic power has too often become political power, corrupting the very process that is supposed to guarantee our rights. Corporate lobbyists outnumber the Congress many times over.

The new social contract must include stricter accountability for corporate behavior, and a return to a stronger role for government in protecting the public interest.

First, we need to prevent corporate misconduct with laws to make sure corporate boards of directors and auditors are independent of management. And we should reward whistleblowers who expose corporate wrongdoing.

The standards that are on the books must be backed up by regulations with teeth. The fines and penalties imposed for breaking the law must be equal to the potential financial gains. It is absurd that the penalty for promoting an illegal tax shelter worth millions is only $1,000.

We need sound, full and open accounting practices. We should expand the concept of “full disclosure” for corporations. Of course corporations must be held to the highest financial fiduciary standards. But beyond finances, why shouldn’t companies be accountable to investors and the public on other important matters, like environmental standards, and labor relations? Knowledge is power.

And it’s time to look behind the fiction that allows corporations to become “citizens” of places like Bermuda, and avoid paying income taxes on their foreign income. They are Bermuda citizens, yet they still get US corporate welfare, like special tax breaks, while Bermuda protects their directors and executives from liability under American law.

I want to restore protection in the marketplace for all Americans. The regulatory system must be free to work as designed. Our laws deserve to be enforced, and to be free of moneyed interests and their Washington lobbies. This is the only way to ensures opportunity and fair competition for our nation's entrepreneurs and honest business people.

Time after time, the Bush administration and their Republican cronies have removed important safeguards – in the environment, in energy, in finance and consumer protection.

They have rolled back the nation’s clean air standards to allow increased pollution from the oldest and dirtiest power plants. Blocked the investigation of 70 power plants suspected of violating clean air standards. Permitted logging in old-growth forests, but done little to protect homes from wildfires.

Under this administration, Enron took advantage of utility deregulation to rip off California before ripping off its employees and shareholders. Mutual fund companies are cheating their investors; mortgage and credit schemes are putting families deeper in debt; worker safety standards are being lowered.
Americans deserve better. It’s time for corporate America to clean up its act.
And an important step is ensuring that American workers are allowed to organize to protect their interests. Organized labor played a critical role in building the middle class of this country. Yet the Bush administration is doing all it can to make it harde, not easier, for workers to join unions today. Workers should be able to join unions if they freely choose to sign a union card. We need card check legislation, so that workers can organize without enduring coercive anti-union campaigns.

We need to protect the rights of employees to be paid overtime and defeat the outrageous attempt of President Bush and the Republicans in Congress to take overtime pay away from 8 million American workers.

And it’s time to recognize another reality of the 21st century – the fact that there are nearly as many working women as there are men.

The average woman starting out today will be paid half a million dollars less over the course of her lifetime than her male counterpart. That’s unfair and unacceptable. Closing the pay gap will be one of my top priorities as President.
Let me be clear: My program is pro-business and pro-jobs. It will help small businesses and emerging businesses. Entrepreneurs built America. They have always understood the promise of our nation, and seized the opportunity.
Small businesses create more jobs than big business. They’re part of our communities – they don’t move their headquarters or their jobs offshore. Fourteen million American women own small businesses – we must do more to help them grow and succeed.

Small businesses have the right to expect equal access to capital. I have proposed the creation of a major new financing tool for American small businesses, built on the model of the home mortgage finance system that has made our nation a leader in home ownership and the envy of the world.
Business also has the right to expect that government will help keep the nation’s economic engine focused on the future. This means investments for the future not only in our nation’s human capital, but also in the research, science and technology that builds a common base of knowledge for the future.
For instance, America should be a leader in developing and using alternative energy. It’s a major industry ready to take off – ready to create thousands of jobs and major sources of power. Whether it’s wind power, or solar energy, or hydropower, or other new technologies, all we need to do is open the market, take away the old subsidies and corporate welfare, and let them compete.


Taxes are what we pay to be Americans – to live in a democracy, to have opportunity, and to use the vast resources of America – the highways, the schools, the national parks, the internet, the medical centers and scientific breakthroughs of government research. No one likes the idea of payroll deductions or writing a check to the IRS, but the truth is our taxes are the membership fees we pay to belong to the world’s greatest society.
And that responsibility includes corporations. Two generations ago, American corporations carried 30-40% of the tax burden in this country. Twenty years ago, under Ronald Reagan, that number went down to less than 20 percent. Today, the corporate share is less than 10 percent, and individuals are shouldering over 90 percent of the tax burden for the country. That balance has to change.

The New Social Contract I am proposing will include fundamental tax reform to ensure that every wealthy American individual and corporation is paying their fair share of taxes – and that the tax burden on working families is reduced.
Not paying your fair share is equivalent to turning your back on being an American. And that’s what American companies that move to offshore shelters are doing. They’re avoiding $70 billion a year in taxes – enough money to bring a real tax cut to every family.

Better and fairer tax enforcement could collect another $30 billion a year from known tax cheats. Closing corporate loopholes and ending unnecessary tax subsidies would bring $100 billion into the US Treasury each year – money that the rest of us are paying today.

I want to get rid of the Bush tax program and repeal the “Bush Tax”. Let’s start over with a real tax reform plan to make the code fairer and simpler, based on a few simple principles:

• We must eliminate abusive tax shelters and crack down on corporate tax evaders.
• Corporations and inherited wealth should pay their fair share of taxes.
• Individuals and small businesses should spend less time dealing with taxes, and the tax code must be simplified.

Our government is the guarantor of the future of America. It is the repository of our trust, and the ultimate keeper of the promise of America.
If our government is to be there in the future – if it is to “secure the blessings of liberty to ourselves and our posterity”, we must be responsible stewards, not profligate spenders.

This administration has ignored that fundamental responsibility. It pretends that deficits don’t matter and that tomorrow will take care of itself. They have turned us from a beacon of financial strength to the world’s greatest debtor. Foreign investors now control our currency. We are running a credit card economy.
Balanced budgets matter. They lead to economic growth. Social progressives should be fiscal conservatives, because only fiscal responsibility guarantees that the American people will have the government they need when they truly need it.

Part of the New Social Contract will be controlling spending and bringing budgets into balance. I know it can be done. I did it eleven times as governor.
Building this New Social Contract won’t be easy. The interests that oppose change are deeply entrenched. They have built longstanding political relationships. Each hand has washed the other in the basin of Washington politics.

But in our nation, the people are sovereign, not the government. It is the people – not the media, or the financial system, or mega-corporations, or the two political parties – who have the power to create change.
The biggest lie that candidates like me tell people like you is, “Elect me, and I’ll solve all your problems”. The truth is -- you have the power to change this country.

You have the power to write a new social contract that keeps the promise of America.

And you have the power to take our country back and take back the White House in 2004.

--- End ---



Back to Dean Speeches

Or else I'm just a Luddite