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Morally right and good economics

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A little more than six months into his second term, President Obama returned to the theme of his presidency, and perhaps his entire political career: carrying out the promise made in the preamble to the Constitution. The president wants to refocus our attention on the economy and helping middle-class families because that’s the moral imperative of our Founders: to promote the general welfare.

From the day he took office, Obama’s goal has been economic restoration, the foundation of social stability. But certain segments of Congress don’t understand that the equation “We the people” means policies that strengthen opportunity for the most people and support those most in need.

“We the people” does not refer to an oligarchy of the increasingly super-rich amassing more and more of the country’s wealth for themselves.

Despite some media whining, Obama’s ideas are not new ideas. He is proposing well-thought-out programs to restore economic progress for the working and middle classes, based on fundamental principles. “This country offered you a basic bargain,” he said this week at Knox College. It offered “a sense that your hard work would be rewarded with fair wages and benefits, the chance to buy a home, to save for retirement and, above all, to hand down a better life for your kids.”

Unfortunately, we’ve come to expect congressional Republicans to obstruct progress and undermine efforts “to provide for the general welfare.” Thus it was not surprising that Republican leaders announced their intention to stonewall the president’s plans to better the economy, and also to reverse all the public benefits from laws already enacted.

The Republican chairman of House Appropriations, Rep. Harold Rogers, announced bills to shoot down Obama’s major economic initiatives.

They slash the budgets for various departments from 30 to 50 percent.

“These are tough bills,” Rogers said. “His priorities are going nowhere.” Republicans have pledged to shut down the government come October, unless Obama agrees to completely defund Obamacare.

“This is as serious a challenge on fiscal matters as I’ve ever seen,” Democratic House Whip Steny Hoyer said.

But what we are seeing that we haven’t expected is support for what may be called privatized financial oligarchy at the local level.

For example, Obama wants to increase the minimum wage, which hasn’t been touched for four years (making him the first president in decades in whose term there’s been no increase.) This disregard — even disdain — for the working poor reflects what Obama calls a “winner-take-all economy where a few do better and better, while everybody else just treads water.”

The nation’s single largest employer, Wal-Mart, has courted the Washington, D.C. city council for months, helped by a prestigious local lobbyist, David W. Wilmot, who receives a retainer of $10,000 a month. Wal-Mart wants to build six stores in the District, which major retailers, preferring the wealthier suburbs, have shunned for years.

That would seem to be good news. Except Wal-Mart underpays its employees. A study by the state of Ohio found that “15,484 Wal-Mart workers and dependents received Medicaid benefits in June 2009, and 12,872 Wal-Mart workers and dependents got food stamps.”

The state representative who commissioned the study, Youngstown Democrat Robert Hagan, extrapolated that Ohio taxpayers shelled out $67 million for Wal-Mart employees.

It gets worse. Wal-Mart publicly supported Obamacare, then this year kicked thousands of its employees off its health plans by demoting them to part-time employees. All employees hired after January 2012 who work under 30 hours a week, will lose Wal-Mart’s health plan. For many, that means the state will pick up the tab.

Enter the D.C. Council, which saw a need to provide for its citizens who have no union representation. The council passed a “living wage” bill that will apply to large corporations without unions, like Wal-Mart. Businesses with more than $1 billion in income yearly, and over 75,000 square feet of retail space, must pay their employees $12.50 per hour.

Wal-Mart threatened to cancel three of its planned stores not yet in development, and might pull the other three under construction, if the living wage bill passes.

The council refused to be intimidated, and passed the bill 8 to 5.

But the bill is opposed by Mayor Vincent C. Gray. To override a veto — if Gray vetoes the bill — requires nine votes. Two of the council members who opposed the bill are running for mayor, and likely have no desire to alienate the big corporations and developers who bankroll campaigns. It’s going to be a tough sell to convert one of the other three.

Obama said at Knox College: “This growing inequality isn’t just morally wrong; it’s bad economics. When middle-class families have less to spend, businesses have fewer customers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity grow farther apart, it undermines the very essence of this country.”

Unfortunately, it seems that for now Washington’s mayor is not sure what side he might end up fighting for.

(Donna Brazile is a senior Democratic strategist, a political commentator and contributor to CNN and ABC News, and a contributing columnist to Ms. Magazine and O, the Oprah Magazine.)

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