The Right Needs an ETSY Earner Agenda

The Right Needs an ETSY Earner Agenda
March 20, 2013

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

The scene at CPAC was of a movement at a point of transition – the old Reagan coalition doing battle with a new more libertarian rising generation. Whenever great transitions come, the existing hierarchy does its best to preserve the existing order of things. In this case, that order is unlikely to be preserved for long, for a whole host of reasons out of the control of any faction. Still, the problem remains: even accepting or adapting toward their views on marriage, immigration, foreign policy, national security, marijuana and more, are the challengers to the still-dominant viewpoints on the right likely to bring Republicans any closer to electoral viability?

The answer is almost certainly not. What is most troubling about the clashes on the right at the moment is not their ferocity or their insignificance, but rather how little they have to do with the issues Americans actually care about. The persistent inability of the right – conservatives, libertarians, and the Republican Party as a whole – to adapt a message that matches up with the shifting interests and focuses of huge swathes of the American people is a defect shared across all the warring factions.

During the coming wilderness years, the right needs to set aside their hopes for a common sense approach to tax reform, fiscal restraint, and entitlement reform – none of which are possible under the auspices of this White House, and few of which have popular support. Instead, they should apply real ingenuity to the challenge of presenting a message and a set of policies which rebut the dominant themes of the left. They should start by addressing the “War on Women”, the apotheosis of President Obama's strategic approach: find and highlight as many wedge issues as possible that serve to naturally excite his base and pit factions of the right against itself. This is a strategy that will survive Obama, and that the right must mitigate or even turn to its benefit.

The economic decline of the past few years has led to a rising number of “1099 Moms” or “Etsy Earners” – women who've started home businesses or found contracting work to make ends meet and to stay engaged in their careers in the longterm, recognizing they'll have to go back to full-time work as soon as they are able. The overall 1099 portion of the economy has grown dramatically – Houston alone has seen about a 12% increase since 2009. What are some ways conservatives could approach reaching these women and other work-from-home professionals?

Here are five general approaches to policy areas that can serve as a starting point for crafting an Etsy Earner agenda.

TAXES: Start with a push to end the massive tax penalties on self-employed work. Self-employed Etsy Earners pay 15.3% out of pocket on payroll taxes, and are penalized if they don’t cut a check every 3 months (rather than having it deducted out of your count, and your employer paying half of it). To add insult to injury, those who are married also suffer from a dramatic marriage penalty: they are taxed at their spouse's marginal rate even if they're making a fraction of what he earns.

HEALTH CARE: Consider the creation of a Health, Education & Retirement account or accounts that combines the functions of HSA, 529, and 401(k). A HER Account would streamline the process for saving toward key life needs and recognize that these costs are more persistent in the new economy. Republicans already talk about why individuals should get the same tax treatment for health care as their employer, ensuring portability. But they should reboot the issue by creating a carveout for the self-employed, framed as giving them the same benefits corporations get. The left’s use of birth control politics will continue to trouble the right, but they should begin posing Bobby Jindal’s question: Would you rather be able to buy your birth control over the counter, without having to go through an unnecessary doctor’s appointment, tax free through your HSA, just like (used to be able to, before Obamacare) with Aspirin?

EDUCATION AND CHILDCARE: School choice is the great white hope on the right, but they should expand their normal conversation about it to include the parent trigger and education savings accounts which can be used toward Pre-K or toward child care. The current deductibility limit for child care expenses comes nowhere near the annual cost for most families, which particularly hurts single moms, who have no option but to work and put their kids in homecare or daycare. It also creates a huge incentive to dump kids into Head Start, a failed program which drives up costs for every other type of child care. Either make every penny of childcare expenses deductible, or create a tax-free childcare/education savings account, perhaps framed more broadly as Childrearing Accounts. The right should look to the example of Arizona’s Empowerment Savings Account program, where in addition to school tuition, the money can also be used for home-schooling and other qualifying expenses.

HIGHER ED: The right has a grab bag of ideas when it comes to challenging the existing paradigm of public higher ed institutions—whether on the creation of a $10,000 degree, credentialing process, loan process reforms, or other areas. To address Etsy Earners, Republicans should advocate making all student loan interest deductible to offer some relief for people saddled with loans as a reward for the responsible: you get the expanded deduction if you're current on all your payments. But they should also embrace the forward-looking proposal from Wisconsin Gov. Scott Walker, a college dropout himself, who has spearheaded the University of Wisconsin flex degree. In an era where a diploma is more about credentialing for work than a liberal arts experience, a system which tests for competency from home in a family friendly manner which equips you with a top tier degree from a state institution is extremely friendly to working moms.

GAS AND GROCERIES: Regardless what the Fed or the Bureau of Labor Statistics tries to tell you about the lack of inflation, costs are hitting the middle class hard in these key areas. Republicans need to have a gas and groceries agenda. Just looking at ads from late 2008 and early 2009 illustrate the hit to the wallet that the lower and middle classes are feeling when they feed their families. Instead of simply attacking food stamps, Republicans should combine a series of policies into a gas and groceries package – one which would include policies to slow inflation, eliminate incentives for energy companies to turn corn into gas, provide tax credits to families to help them cope with rising grocery bills, and generally target the government policies which drive the prices people see every day which impact family budgets the most.

The right mocked Julia when they met her – but she is the rising model for life, and that means the right needs a message for her, too. The left's answer is particularly uninventive: the offer of more benefits, doubling down on 1970s-style employer requirements, without mention of cost. This leaves a wealth of opportunities for the right to turn the left's strategy back on it. All it takes is recognizing these opportunities when they arise, and engaging in a proactive strategy to highlight the gap between the left’s stale solutions and ones adapted to the realities of the new economy. 

Benjamin Domenech is editor of The Transom. Click here to subscribe.

[First published at RealClearPolitics.]

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)