The EII Agenda

EII: A Core Agenda for Progressive Thinkers

Our Core Policy Agenda is aimed at achieving growth and innovation in a Progressive way, and should be considered in the context of an overall balanced approach towards fiscal responsibility. It is a starting point that has evolved through discussions with thought and policy leaders recognizing that some of our proposed initiatives require direct government investment. We understand that creating new industries with a long-term future requires smart, balanced policies that reward innovation as the purest engine of economic growth.

EIAF: Advocates for refocusing and rebranding the Democratic Party

Our challenge as Democrats remains: translate complex policy ideas into simple, compelling messages that change the debate. The Progressive economic agenda is the base, but Democratic messaging must help create the foundation for effective communication in an information saturated environment.

What does the Democratic Party stand for? Since the New Deal, our identity as the Party of working people has eroded as the role of labor has evolved, and middle class voters in the South and West together with social conservatives have migrated to the Republicans. Polls show that voters still feel that Democrats care more about “the little guy,” and are more sympathetic to the needs of the middle class. Those feelings collide with our image as the Party of “big government.” That is the consequence of having the debate defined almost exclusively on the Republicans’ terms: higher taxes vs. lower taxes, bigger government vs. smaller government, and deeper deficit vs. growth. Democrats must be, not only, the guardians of opportunity for all Americans, but also the champions of a thriving free market economy

A Democratic future with more and better jobs, economic security and broad prosperity vs. a Republican future of economic insecurity for most and prosperity for a few.

Our goal is to change the terms of the debate. We do that by recapturing our brand and transforming it into one that is easily understood as our own positive economic agenda for growth and innovation linked to our Democratic values, embracing both our historical identity and new global realities. We must articulate an agenda that: 1) is as clear and concise as that of the Republicans, 2)is communicated in a compelling, inspirational and concise manner, and 3) unifies the diverse constituencies of the Party by focusing on urgent economic issues that touch us all in a direct, personal way.

We must persuade the American people that our program means better jobs, more opportunity and a healthier environment, all driven by American innovation.

Our ideas and message should embrace our Democratic values unapologetically and forcefully, including that a smart, efficient government can partner with private enterprise to build an economy with prosperity for all. Growing our economy through innovation means we can afford to invest responsibly in education, and infrastructure while strengthening our social safety net.

Recapturing the Democratic brand redefines the national debate and shifts the playing field to our terms.

Agenda Summary: To drive growth and innovation through public-private investment in education, innovation, infrastructure, and reform:

Education: Reclaim our place as a global leader in education. Recruit, train, and retain a new generation of excellent teachers. Reform teacher accountability. Move the focus from STEM to STEAM, science, technology and creativity. Increase affordability and access to higher education while strengthening our K-12 system. Add entrepreneurial skills to school curricula and promote workforce development to help transition the U.S workforce into the new economy.

Innovation: Become the world leader in R&D, technology and new products through funding, and private sector incentive programs. Encourage entrepreneurship by expanding Small Business Administration credit for start ups, and making changes in immigration policy that encourage entrepreneurs to come to America. Promote innovation by investing in the transition to a low carbon economy. Become the global leader in clean energy jobs, usage, and exports by creating private sector incentives and financing through a clean energy bank, and a national energy efficiency incentive plan.

Infrastructure: Build long-term competitiveness and job growth through an infrastructure bank, expanded federally-backed bonds, and incentives for private industry to partner and invest in projects. Strengthen infrastructure by investing in broadband, data centers, and mobile cell towers, and improving access to spectrum for wireless applications.

Reform: Reform our antiquated tax code to promote investment in American jobs and reduce income inequality, restore a living wage, repair the social safety net.

Education: Building Our 21st Century workforce.

Goal: To regain world leadership in education excellence, and prioritize workforce development for a 21st century workforce.

Rationale: Our 21st Century workforce needs new skills. As we shift towards a “thinking-based” economy that favors non-routine, analytical, and interactive tasks, we need our kids to be more creative and innovative thinkers learning how to think not, just what to think. While the US has the top rated higher education system in the world, it ranks 12th amongst developed countries, in term of the percentage of citizens with a college degree. This is a key area in which the US has actually lost ground in recent years. Another disturbing trend is that children in grades k-12 are losing ground to children in other countries in the areas of: reading, math, and science. In order to be able to compete in the 21st century, we must strive for excellence at all levels. Recently, policy makers say they recognize that high cost and inadequate k-12 education have caused the US to produce fewer graduates with degrees in Science, Technology, Engineering, and Math (STEM), than other developed countries. But employers also need workers capable of creative problem solving. Recent studies show that Arts skills breed creativity, yet local Arts Education budgets have been shrinking. What is needed is a shift from STEM to STEAM (adding Arts). Arts education directly promotes creativity, the key to innovation.

Policy Initiatives:

  1. Teachers: Good teachers are the most important factor in student outcomes. Adopt the Center for American Progress (“CAP”) plan for a Teacher and Leader Innovation fund that would provide grants to states and school districts to support innovative strategies that attract and support effective teachers and Principles. Expand the Teacher Loan Forgiveness program which allows teachers to write down student loan debt for teaching in challenging schools in low-income areas. Work with teachers to reform the tenure, dismissal processes, and tie them to performance rather than experience.

  2. STEM+ARTS=STEAM: Institute a top-to-bottom program to feed the pipeline of the jobs of the future, including added incentives to train and attract K-12 science, math and arts teachers, more K-12 science and engineering competitions with real rewards for success such as free tuition at public universities, public-private partnerships to create financial incentives for universities that increase undergraduate science and engineering degrees, and funding more graduate study through NSF. Dramatically increase both public and private funding for Arts education to promote next generation creative thinking. . Improve knowledge transmission through faster adoption of digital textbooks, more widespread use of creative commons licenses for instructional materials developed with taxpayer dollars, and policy changes that speed education innovation.

  3. Workforce Development: Adopt a Brookings Institution proposal, and create a competitive grant program funded by the federal government for states to use grants to create training partnerships between employers in key industries, education providers, workforce agencies, and state level intermediaries. Expand the Manufacturing Extension Partnership (MEP) to help create and retain U.S manufacturing jobs. The MEP has a high rate of return for public investment, with a job created or retained for every $1,570 invested. Adopt Third Way proposals to update the Workforce Investment Act that would shift the focus of training programs and state and local Workforce Investment Boards towards high growth industries. Add entrepreneurial skills to school curricula.


Goal: To lead in Research and Development, drive towards a low-carbon economy, and ignite new entrepreneurial activity and investment.

Rationale: R&D is the fuel of innovation and growth. Economists agree that technological advance accounts for at least 50% of long-term economic growth. In the 1990s, three-quarters of the papers cited in patents were publicly funded science. Because of these massive payoffs, economists argue that overall investment in R&D should be 2 to 4 times higher to get optimal economic growth. The private sector has limited incentives to undertake this level of R&D on its own because of risk, longer time-scale to payoff, and inability to capture all of the economic benefits of a technological advance. In addition, our support for private sector R&D investment has fallen apart as our tax credit support has dropped to 17th internationally. The shift from a post industrial economy to the “next” economy requires, above all, as a recent report from CAP notes “remaking the vast energy systems that power the nation and the world. We must fundamentally change the way we produce and consume energy and dramatically reduce our dependence on oil. The economic opportunities provided by such a transformation are vast, not to mention the national security benefits of reducing oil dependence and the pressing need to fight global warming.

Encourage entrepreneurship by expanding Small Business Administration credit for start-ups.

Policy Initiatives:

  1. Research and Development: Government investment in basic R&D has paid the highest return on investment of federal dollars, according to studies. We should increase federal R&D overall, particularly in areas of market failure where the private sector under-invests, such as long-term scientific work and basic science. In the private sector, we should increase the value of the R&D tax credit, and make it permanent. Add incentives for research done with federally funded institutions like national labs, to foster public-private partnerships aimed at discovering new technologies and making them commercially viable.  We should also expand federal partnerships with the private sector and philanthropic organizations to create prizes for achieving new technological breakthroughs across technological sectors, like the X Prize that promoted a breakthrough in suborbital space flight.

  2. Low Carbon Economy: Adopting the plan proposed by CAP from September of 2011, we should create an independently run, government-overseen Green Bank to focus on commercializing clean energy and innovative business practices, and to get clean energy companies through the “valley of death.” We can expect at least a 10-to-1 leverage of private investment brought in for every public dollar put in, based on similar programs. Fund a National Efficiency Program for both residential and commercial structures. According to CAP and a McKinsey study, a comprehensive efficiency strategy could reduce the nation’s energy costs by more than $41.2 trillion by 2020, and every $1 million invested in energy efficiency retrofits will create 17.36 jobs. Adopt a combination of the Home Star, Building Star and Rural Star plans to create incentives for widespread retrofitting by consumers and investments in efficiency. Adopt the Green Act (HR 2336) to provide policy incentives to leverage the financial system to accelerate adoption of energy efficiency measures. Support the Waxman-Whitehouse carbon tax proposal: Representative Henry Waxman (D-CA) and Senator Sheldon Whitehouse (D-RI), along with Representative Earl Blumenauer (D-OR) and Senator Brian Schatz (D-HI), have proposed legislation that would require polluters to pay for their pollution. The proposal would charge the nation’s largest polluters a set fee for every ton of pollution they release. The revenue generated by the proposal can be used to lower corporate and personal tax rates.

  1. Reforming Patent Reform: The passage of recent patent reform legislation has not ended concern about the state of the American Patent system. The U.S patent system is critical to the economy and innovation in America. In 2008, venture capital-backed companies employed more than 12 million people and generated nearly $3 trillion in revenue. Respectively, these figures accounted for 11% of private sector employment and represented the equivalent of 21% of U.S. GDP during that same year. Small companies and Venture Capital are concerned that provisions of recently enacted Patent reform will discourage investment in new innovation-based small businesses, and impair economic growth. Congress should consider amendments that address these concerns and address fee diversion from the PTO. The patent office must have sufficient, consistent multi-year funding to make timely and correct decisions on patent applications, and move away from a disruptive boom-bust funding system. Fixing the PTO’s funding will allow the office to focus on addressing the critical problem of the backlog of patents that is stifling innovation.

  2. Recent changes to the Small Business Administration’s     SBIR program threaten help for start-ups. Re-establish a cap on how much money can be given to venture capital-backed companies, capping the National Institutes of Health at 15%, and other agencies at 5 percent. Reverse the recent increase in Phase 1 and Phase 2 funding levels, which stifle early stage entrepreneurial activity. At the very least, monitor closely whether a huge increase in venture-capital backed firms causes a major drop in new projects.


Goal: To rebuild America, build the new highways of the 21st Century, and create long-term competitiveness and job growth.

Rationale: It is estimated that every $1 billion of public infra-structure investment generates 23,000 well-paying jobs and New America’s plan to spend $1.2 trillion over 5 years is estimated to create over 5.52 million jobs each year. It has
also been projected that an investment of $10 billion into both broadband and smart grid infrastructure would create 737,000 jobs. The CBO estimates that every dollar of infrastructure spending generates on average a $1.6 increase in GDP, and noted economist Mark Zandi estimates that $300 billion in infrastructure spending would raise GDP by nearly $480 billion (close to 4 percent). The CBO has said that we are investing 75 percent less in infrastructure than we should be in economic terms. As New America points out, the American Society of Civil Engineers estimates that the United States will have a $1.2 trillion shortfall over the next five years to meet America’s most basic infrastructure needs. According to Third Way, since 1990, demand for electricity has increased by about 25% but construction of new transmission has decreased by 30%. We are also falling behind internationally. China invests 9 percent of GDP annually in public infrastructure, while we spend well less than 3 percent. Logistics costs for American business are on the rise but are decreasing in Germany, Spain, and France. In short, there is a massive and untapped well of job creation, growth, and private investment available in infrastructure. A recent report from CAP recently argued “we face a growing climate crisis that will require us to rapidly invest in new energy infrastructure, cleaner sources of power, and more efficient use of electricity and fuels in order to cut global warming pollution. There is much work to be done in building smart solutions at a scale and speed that is bold enough to meet this gathering challenge. It is time for a new vision for the economic revitalization of the nation and a restoration of American leadership in the world.

Policy Initiatives:

  1. Infrastructure Bank: Adopt the Third Way plan to create a national infrastructure bank to issue loans and guarantees to leverage private capital. Estimates have placed the amount of private capital readily available for infrastructure development at $400 billion. Like the Green Bank, this institution would be independently run but subject to federal government appointment and oversight. The focus should include roads but more significantly include 21st century broadband and electric grid infrastructure.

  2. Bonds: Adopt the New America plan to tap private capital markets by issuing Reconstruction and Build America bonds for projects under the auspices of the U.S. Army Corps of Engineers (USACE) and mostly through private sector contracting. These bonds would take advantage of historically low interest rates and would bring state and local plus private financing together.

  3. Private Sector Incentives: Give multinational businesses an opportunity to repatriate a portion of profits from abroad with no additional taxes if they invest dollar for dollar in the infrastructure bonds. Expand public-private partnerships in the electric grid, telecommunications, and road/rail.


Goal: To reduce income inequality and grow jobs and the economy.

Rationale: The income gap is at its widest since the “roaring twenties”. The Economic Policy institute recently noted that income growth between 1948 and 1979 was strong and broadly shared. The inequality found in 1948 generally persisted over the thirty year period, but did not worsen.

But between 1979 and 2011, income growth slowed and favored those at the top. Since 1979, the total share of income claimed by the bottom ninety nine percent has steadily decreased. By 2011, the top one percent had captured an additional ten percent of the nation’s income. Income inequality saps our ability to sustain a growing and innovating economy. Tax policy is economic policy. We need a simple and fair tax code. Simplify the tax code and institute common-sense measures such as cutting tax preferences for high-income households. Lower the corporate tax rate. Because our corporate tax system is riddled with special interest loopholes, our system has one of the highest statutory tax rates among developed countries to generate about the same amount of corporate tax revenue as our developed country partners as a share of our economy. This, in turn, hurts our competitiveness in the world economy.; Restore a living wage to reduce income inequality, reward hard work and help grow the economy. Repair the torn social safety net to put an effective floor under the economy.

Policy Initiatives:

1. Tax Reform:

A. Simplify the Code: The tax system should be simplified and work for all Americans with lower individual and corporate tax rates and fewer brackets. Innovate to cut carbon and tax rates: Revenue generated from proposed carbon taxes, like the EEI-supported Waxman-Whitehouse proposal, could be used to lower corporate and personal tax rates. This solution would represent a win for the environment and the economy. Cut inefficient and unfair tax breaks. Cut tax breaks that are inefficient, unfair, or both so that the American people and businesses spend less time and less money each year filing taxes and cannot avoid their responsibility by gaming the system.

B. A fairer Code cuts the deficit: Cut the deficit by $1.5 trillion over the next decade through tax reform, including the expiration of tax cuts for single taxpayers making over $200,000 and married couples making over $250,000. Observe the Buffett Rule. As multi-billionaire Warren Buffet has pointed out, his average tax rate is lower than his secretary’s. No household making over $1 million annually should pay a smaller share of their total income in taxes than middle-class families. This rule will be achieved as part of overall reform that increases the progressivity of the tax code.

C. Increase job creation and growth in the United States. Make America stronger at home and more competitive globally by increasing the incentive to work and invest in the United States. Redesign and make permanent the Reaearch and Development tax credit to spur investment in innovation.

2. Restore a National Living Wage:

We should restore a “living wage”, not just raise the minimum wage. It’s good for business and for the overall economy. Why? Because when poor workers have more money to spend, they spend it, almost entirely in the local community, on basic necessities like housing, food, clothing and transportation. When consumer demand grows, businesses thrive, earn more profits, and create more jobs. Economists call this the “multiplier effect.” According to Doug Hall of the Economic Policy Institute, a minimum wage hike to $9 would pump $21 billion into the economy.

We call for restoring a national living wage, indexed for inflation. Congress hasn’t raised the national minimum wage to keep up with inflation. At its peak in 1968, the minimum wage was equal to about $10.50 an hour in today’s dollars. At today’s level, workers experience a 25 percent decline in buying power.

Most Americans agree that workers who toil full time shouldn’t be stuck in poverty. According to a national poll conducted last year, almost three-quarters (73 percent) of Americans support increasing the minimum wage to $10 per hour and indexing it to inflation. The most frequent argument against a living wage is that a national living wage hurts job. Untrue. Studies reveal that higher minimum wage levels do not force employers to lay off workers. In a study published in the Review of Economics and Statistics, economists Arin Dube, William Lester and Michael Reich compared counties adjacent to state borders, where one state raised the minimum wage and another did not, between 1990 and 2006. They found conclusively that raising the minimum wage had no impact on employment. Increasing the minimum wage to $9 an hour and tying it to the cost of living will not, on its own, lift the country out of its economic doldrums. But it will definitely lift millions of Americans out of poverty, stimulate the economy, and create new jobs. It is the right thing to do both morally and economically. ( see

3.Repair the social safety net:

The Affordable care Act was only the first step in addressing the nation’s health care crisis. All Americans must have access to affordable, portable, high quality basic health care. The current reform fails to adequately control the cost of health insurance. Health Care reform should be strengthened by the inclusion of the “public option”. Medicare could be made available to all on a buy-in basis with a regulated and robust private insurance market maintained for coverage for additional health care needs beyond a nationally mandated basic package. Social Security should be strengthened by common sense adjustments that share widely any additional costs while maintaining adequate benefits, appropriately adjusted annually for inflation. Medicare and Medicaid will benefit from additional changes to Health care reform and aggressive efforts to root out fraud, waste and abuse. In Medicare, particularly, we must rapidly move from paying for quantity of care to paying for quality of care and decouple from the standard fee for service model. Accelerate the move to accountable care organizations, with full transparency around cost of care and results from providers.

Integrate the public option across all government subsidized health care programs for efficiency and uniformity. Pass legislation giving the Government power to negotiate the prices of prescription drugs in all federally subsidized health care programs including Medicare and Medicaid.


This agenda represents an approach that would accomplish
our key goals:

  • Creating millions of jobs;

  • Expanding GDP and overall prosperity; and

  • Creating a clear brand for the Democratic Party around growth and innovation.

The policy details can and will evolve, but it is vital for the Democratic Party to coalesce around a shared core economic agenda — that we can adopt, pursue and speak about consistently.

We need cohesion on agenda, message, and message delivery as the foundation for sustained Democratic Party and electoral success.

Economic Innovation Institute and Action Fund , 2012.
All Rights Reserved.