“If You’re Busting Your Butt, You Should Be Able to Get Ahead”

Part 1: A Decade in a Sour Mood

Anne Kim: What is your baseline understanding of how the typical American household is doing these days, and how did that inform your thinking as you put together this agenda?

Jim Kessler: The first thing to say is they’re in a sour mood. They’re in a sour mood about the economy, and they’ve felt this way really for the past 10 years. 

One of the big mistakes that Democrats have made is we’ve told people, “This is the way you should feel.” Under Biden, they were told this is the way you should feel. They kept telling us how they feel, and we didn’t believe them. 

The fact of the matter is they’re not feeling good about the economy as it pertains to them. The issue isn’t “is our economy growing?” It is. Our economy is growing. And unless we really screw it up, it will continue to grow. But they just don’t feel like they’re getting enough benefit from it, particularly relative to the things that they feel they need to live a stable and secure working-class life. They’ve been feeling that way for a while, but certainly since COVID.

Anne Kim: There’s a little bit of irony in this in a way because back in the day, and we’re talking 2006, you and I worked on Third Way’s first middle-class agenda. Back then, the message was the opposite. We were arguing that Democrats were telling middle-class people that they were miserable, and the message needed to be about optimism and about aspiration. And so this is kind of a one-eighty. What has changed in the economy that has gotten the middle class to the point where they don’t have any faith in their ability to achieve the American Dream anymore?

Jim Kessler: I think having an agenda that is aspirational and optimistic is still the key. But they’re coming from a different place than where they were in 2006. And you know, one of our biggest insights was that [Democrats] had the wrong definition of the middle class. 

You need an agenda that [targets households] with $45,000 to a $105,000 in income. That’s what would appeal to the middle class. And I do believe that what we wrote back then, you and I, really changed the Democratic Party to focus more on the middle class and not conflate the middle class with the poor. I think that was valuable. 

In the intervening years, two things happened—actually three. One was the financial crisis, which was devastating. Second was COVID, which had its own strange dynamics. And the third was that we saw the mature stages of the technological age, the internet age, in which income and opportunity started to concentrate more on the coasts and more among people who had college degrees. That’s only 38 percent of the workforce—those with college degrees—and everybody else just felt like this isn’t really working for me. That’s the situation that we’re in now. The economy has changed; people’s situation has changed.

Part 2: The Pitch

Anne Kim: Your report has 20 ideas, and we can’t go through all of them. So I’d love for you to pick out a couple of ideas that you’re most excited about and that you think will resonate most with American households. And just for fun, since you talked about the Democratic Party and the problems that the party has had with messaging, pretend I’m a swing voter, and you’re explaining a couple of these ideas to me. What’s your pitch?

Jim Kessler: That’s an excellent question. Our entire narrative is, “If you work your butt off, you should get ahead.” That’s the message of the entire agenda. 

And those are very pedestrian words. Those are not highfalutin’ words. We made a deliberate attempt to take out the “think tanky” words. 

If you’re a presidential candidate and you say, “If you’re busting your butt, you should be able to get ahead,” that’s a promise people can understand. 

Anne Kim: It’s a little bit of an update of what President Bill Clinton said back in the day… 

Jim Kessler: “If you work hard and play by the rules.” Yes. Which I also feel was a centrist populist optimistic agenda, and I think this is a centrist populist optimistic agenda as well. I do think Bill Clinton would appreciate the language that we use. 

Okay, I’m going to give you two ideas. One is an idea on used car loans. 

Ten million people every year take out a used car loan, and the typical loan is $27,000. The interest rate on average is 11.5 percent.

That’s crazy. That’s buying a car with a credit card rate. 

So we’re going to take the exact same model that is already used now for housing under the Federal Housing Administration. [If we] have a very small fee and federal guarantees on used car loans, those rates would drop on average from 11.5 percent to 6.5 percent.

And the fee would be just half a point. 

The typical used car loan is eight years, so it would save you $600 a year over the course of the loan. That’s something if you’re a working-class, middle-class family. It’s saving you $50 a month, $600 a year, and $4,800 over the course of the loan. And if you’re one of the 10 million people buying a used car and financing it, that’s just a huge difference in your life.

I think that’s very simple. You could see it being bipartisan, you could see it getting done. It wouldn’t change people’s lives, but it would ease some of the burden in their lives. 

Anne Kim: Do you have a bumper sticker version of that?

Jim Kessler: “Cheaper used car loans.”

Anne Kim: Okay, can’t get much simpler than that. 

Jim Kessler: The Democratic Party in terms of its donor base is college educated, wealthy, and upper middle-class. They’re not buying used cars. They’re buying new cars. And because the auto industry backstops loans, the loan rate for a new car is about 5.5 percent to six percent.  It’s very, very different. 

The other idea is this: We have a view that work should create wealth. I don’t care what job you’re doing. If you’re working at Dunkin’ Donuts when you’re 17 years old, if you’re working at Pepboys when you’re 24, if you’re working as a nurse’s aide when you’re 44, every job should have a wealth component so that people get a piece of a growing economy. 

Over the last 30 years, if you had invested $10,000 in two funds, one was in U.S. wages and the other was the S&P 500, the fund that invested in the S&P 500 would be 10 times larger than wages.

So if you can’t beat them, join them. People should have a piece of that wealth. So we propose a minimum pension contribution of the equivalent of a dollar an hour in every single job. We would help small businesses pay for it. It would go into a lifecycle fund, but it would be controlled by the individual and they could move it. And that’s our private universal pension account because work should mean wealth. You should get something; you should have something when you retire; and you should be able to pass it on to your kids. Wealth should be for everyone who works.

Anne Kim: What’s the bumper sticker for that one?

Jim Kessler: Universal pensions.

Part 3: Democrats’ Trust Problem

Anne Kim: Got it. Now you alluded to the problems that the Democratic Party has had in reaching the electorate that is likely to give them an enduring majority. What’s your understanding of the party’s current brand and what are your hopes for how this agenda can help rehabilitate how the Democratic Party is perceived among certain constituencies that it failed to win in the last couple of elections?

Jim Kessler: I’m going to answer that two ways. Looking at the electorate in general, starting in 2014, the electorate has voted for change every two-year election cycle. They’re either throwing out one of the parties in the House or the Senate or in the White House. That’s going to happen again in 2026, and I hope that it’s going to happen again in 2028. That will mean eight consecutive election cycles in which voters are saying, “I’m not satisfied, I want something different, I want change.”

Even when they’re looking at the very, very far left, like the Democratic Socialists, I believe what they’re saying is, “I’m going to give somebody else a turn at the plate, take a few swings, show me what you can do.” And they’re trying things out. The Democrats right now are in the midst of that argument, and they will really begin in earnest after the midterms when 75 people start running for president trying to capture our attention. 

But in general, voters do not trust Democrats on the economy. The good news is they don’t trust Republicans on the economy right now because Trump has screwed it up. But they don’t believe that the Democrats are on their side when it comes to jobs, inflation, wealth creation, small business, economic growth. They think Democrats are on their side on things like health care, childcare and education—some of the pieces that are ancillary to the economy and that are very important to people, but not the heart and soul of the economy—what’s going to make them get ahead, get a job, good wages, and that sort of thing. That’s been a historic problem for Democrats. And that’s something they’re going to need to correct to win in 2028.

Part 4: A Crowded Field of Agendas

Anne Kim: Now there are competing agendas out there. There are certainly other organizations that agree with you that the Democratic Party has a deficit with a lot of voters on the issues that matter to them. Project 2029, for instance, recently released an agenda addressing what it calls the “annoyance economy.” Ezra Klein and Derek Thompson had a book, Abundance, which was very influential. There is a little bit of “abundance” running through some of the ideas in your agenda. And then of course there are progressive think tanks like the Roosevelt Institute, Center for American Progress, and many others that are cranking out ideas. What sets your agenda apart from some of these other contenders?

Jim Kessler: You and I were “abundance” before there was the word “abundance,” and before it was cool. And look, Project 2029—I’m a part of that too. I’m on their advisory board, and they’re going to be putting out good stuff. Other organizations will too. 

I believe our contribution to it is “what are the largest ideas that we can have that could possibly get done and that could dramatically change the fortunes of working people in this country?” If you look at our ideas one through 20, there’s a ruthless pragmatism to it. You could see it happening in a functioning government. I can’t imagine, under any scenario, Medicare for All passing Congress and being signed into law. I see no scenario where that that could happen. 

But we have a series of healthcare ideas under a healthcare bill of rights that I could see happening: a smart way of eliminating medical debt, capping out-of-pocket costs, auto-enrolling people who are not insured, and having the Obamacare subsidies re-upped to make their insurance virtually free and moving towards universal coverage there. 

Those are big. Twenty, 30, 40 million Americans would be affected by that in a very, very positive way. So I think [this] strikes the right balance between very big and very possible.

Part 5: Center vs. Left

Anne Kim: So this gets us to the heart of this ongoing debate between the center and the left. You just mentioned that there have been eight consecutive change elections. And that, some would argue, is an argument for big change. You just said that you don’t see any scenario where Medicare for All is possible. Why not? What is the appetite for change? Where do you draw that line between change that’s possible and change that’s far out of line with where the American public seems to be.

Jim Kessler: I think Medicare for All is an excuse not to do anything on healthcare. And the reason why I say that is because the legislation is just a sloppy piece of crap. If you were really serious about this, you would have a bill that has more flesh on the bones. 

I give them credit; they’ve built a movement behind it, and people are supporting it. But it’s because no one reads it. That bill—60 times—gives power to the Secretary of the Health of Health and Human Services to decide your health care. So under Medicare for All, if we had it today, Donald Trump and RFK Jr. would be in charge of all our health care. That means vaccines. That means whatever you’re going to do on trans care. That means abortion. That means birth control. That means measles. That means all sorts of approvals for different medications. That means reimbursement rates, et cetera.

As soon as you know the details of it, people are like, “That seems kind of crazy.” If you look at the Green New Deal—I’ll give them credit; they have the right three words—but there’s not a lot of depth there when you get to the point of drafting a bill and running it through Congress. There’s a reason Bernie Sanders has never passed a bill in his 40 years in Congress. They’re not built to pass. They’re built to sell.

Anne Kim: Which arguably is what MAGA and Trump have done as well. So Jim, you have critics too. For instance, over at the New Republic, Monica Potts called the Third Way agenda, “replete with half measures and outdated ideas.” She called it a “masterclass in nibbling around the edges,” and further referred to it as a “watered-down version of ideas put forward by the Congressional Progressive Caucus.” So how do you respond to that criticism that pragmatism is weak incrementalist tea that excites no one?

Jim Kessler: I don’t know how carefully or seriously she read what we put out. I don’t think a fair reading of this looks like incrementalism.

I’ll plead guilty to pragmatism on it, but I don’t think they’re half measures. [Take] the idea, for example, that every single job—not just jobs for people with windowed offices—but every single job [should go] beyond Social Security with an employer-provided contribution to your own private retirement account that would go into a lifecycle fund. If someone started work at the age of 22 and retired at the age of 67, and if the market performs the next 45 years as it did the last 45 years, that individual would have $450,000 in 2026 dollars in a retirement account.

The typical person without a college degree at age 67 has zero dollars in a retirement account. So this person, and let’s say they’re married and their spouse also has it, they would be a millionaire in today’s dollars.

That’s not small. That is a revolutionary idea in wealth. That would dramatically shrink the wealth gap in this country and income inequality in this country, not because we’ve taxed people at the top so much—we call for huge tax increases on people at the top—but because that bottom 40 to 60 percent would have so much more wealth than they would have before. That to me is an enormous game-changing idea that would forever change the trajectory of people who work and their heirs and their children. 

And that idea we talked about earlier that would save somebody $50 a month for their used cars. Maybe that’s small potatoes for someone writing for the New Republic. That’s not small potatoes for someone who is living paycheck to paycheck.

Anne Kim: There’s not too much daylight in some ways between what the Third Way agenda is and some of the priorities of the Congressional Progressive Caucus. For instance, the Congressional Progressive Caucus’s “New Affordability Agenda” proposes simply to “crack down” on utility companies that are overcharging customers, but the Third Way agenda goes further with a proposal for a cap on utility bills. That strikes me as more interventionist than a vague promise to crack down on excess profits. 

Jim Kessler: On that one, that is simply taking LIHEAP—the Low-Income Home Energy Assistance Program—and upping the income cap on that and fully funding it so that really anybody in the $40,000 to $45,000 or less household income range would have their utility bills capped completely. So that’s taking an existing program and supersizing it. That would make a big difference in people’s lives where their utility bill is really a problem.

Anne Kim: I guess the larger point I’m trying to make here is that the two agendas have a lot of the same priorities. They have an idea on childcare; you have an idea on childcare. They have an idea on affordable housing; you have an idea on affordable housing. There are disagreements over details and scope, but not actually fundamental differences in ideology or priorities, or even to some extent, an understanding of what Americans need. 

Jim Kessler: Right. 

Part 6: The “Ideas Primary”

Anne Kim: As we sit here today, the Democrats have two years to figure out an alternative to Trumpism—an agenda that will get the electorate excited to vote for them and force Trumpism to lose its appeal, deflate MAGA. How optimistic are you that Democrats can coalesce around a compelling, coherent agenda that could win the day in 2028 and improve people’s lives?

Jim Kessler: I’m optimistic, but it’s by no means a guarantee. This is going to come from a single individual who wins a Democratic presidential primary. That’s what’s going to decide it. And we have had nominees in which it was very, very hard to discern their economic philosophy, and we’ve had others where you feel like I don’t know exactly what they’re going to do, but I understand what they’re trying to do and what their approach to it is. 

I think this time around, it’s an open question. I’m optimistic that we will nominate somebody who I believe will have a dynamic and pragmatic economic agenda that can excite people. If I were to guess, I think it’ll be a governor who wins the nomination. I think Washington will be a hard place from which to run. And there are a lot of Washington candidates that I think are excellent, like [Arizona Senator] Mark Kelly and [Michigan Senator] Elissa Slotkin. There’s a whole bunch that I think are wonderful, but this is a discredited place right now. And the governors get shit done. 

I do think there is a “get shit done” thirst out there. They want big things done. They want change done. And look, I think they felt that Donald Trump would get stuff done, and he did. But the stuff turned out to be shit. You really had to read the fine print to know that everybody’s prices would go up because of tariffs and that we would be waging a war with Iran and [there would be] crony capitalism that has really hurt the American people. But there’s going to be an “ideas primary” out there, and a candidate is going to have to have the right ideas to sell in that primary and the right delivery mechanism to do so.