America must shrink class divisions

? The editors of The Atlantic Monthly, in partnership with the New America Foundation, a Washington think tank, have produced for the current issue of their magazine a feature called “the real state of the union.”

The 15 short essays, outlining domestic challenges facing the nation and proposing unconventional ways of dealing with them, comprise an exhilarating and mind-stretching way of thinking about where the United States stands at this moment.

When President Bush delivers his State of the Union Address next Tuesday, he will probably focus on the international scene, especially the war on terrorism and the looming showdown with Iraq. These essays look at the home front, where the tests are different but equally important.

The common theme to these challenges is the imbalance evident in so many dimensions of American life. Where presidents customarily generalize about the condition of the country — “the state of the union is strong” — these authors, who have no political ax to grind, can be candid in describing the gaps and gulfs within this society.

Those divisions were laid bare in the last presidential election, when the electoral map starkly displayed the layout of “red” and “blue” states that gave their electoral votes to Bush or Al Gore. But that was just the beginning: Given a choice between two credentialed, centrist candidates, men chose Bush and women Gore. Whites voted for Bush; minorities, for Gore. City residents went for Gore; the countryside, even more heavily for Bush.

The authors in this symposium take those differences as their starting point and ask readers to think about what the country might do if it seriously wanted to heal the divisions.

Michael Lind tackles “the new continental divide” between the crowded, immigrant-attracting and minority-heavy coastal areas, which went for Gore, and the pro-Bush interior, including the Great Plains states, many of which are shedding population. He suggests politically difficult but plausible changes in current agriculture and water policies, aimed at spurring economic development in the lightly populated states and eventually relieving the population pressures that burden traffic and cause pollution on both coasts.

Shannon Brownlee writes about a less-noticed gap, that in the supply of medical services. Where doctors and hospitals are abundant, researchers at Dartmouth and other centers have found, medical expenditures are disproportionately high — with no evidence of better health results. The implication: Redistribution of resources might produce significant savings and at the same time improve the overall quality of medical care.

But the main focus of several essays is the growing inequality of wealth and income in the United States and the policies that might address it. The foundation for this analysis is a useful chart, credited to Maya MacGuineas, on the “real budget” of the federal government.

In addition to $1.3 trillion for entitlements such as Social Security and Medicare, and $730 billion for defense and discretionary domestic programs, her budget includes $800 billion in tax expenditures, the revenues the government relinquishes to subsidize private individuals and business.

The biggest of these tax expenditures are the exclusions for pension contributions and employer-sponsored savings plans and for employer-financed health insurance, deductions for home mortgage interest payments and state-local tax payments, and reduced capital gains rates.

More than half these tax expenditures go to households with incomes over $100,000 a year and only 15 percent to those with incomes under $50,000.

This tilt, combined with the Bush tax reductions for top-bracket earners and the unyielding Social Security levies from the first dollars of wages, help explain why the gap between the rich and the rest of Americans continues to increase.

The message of these essays is that this gap not only threatens the growth of a healthy middle class, but it contributes to the worrisome loss of social trust among Americans. Republicans continually decry “class warfare” rhetoric from their opponents, but The Atlantic Monthly essays show how current and proposed tax policies are sharpening class lines.

In the final essay, Ted Halstead, the founder and head of the New America Foundation, describes “the American paradox” — the richest, most powerful nation suffering from “higher rates of poverty, infant mortality, homicide and HIV infection, and from greater income inequality, than other advanced democracies.”

Rebuilding a solid center for such a nation, he says, will require a new “social contract,” protecting economic freedom and flexibility but seeking social fairness. This project — which is to be repeated by the magazine annually — represents a serious start in that direction.