NEW YORK (Reuters) - Presidential candidate Hillary Clinton will argue in a speech on Monday that U.S. businesses are too fixated on short-term profits, especially on Wall Street, and she will pledge to help workers get better pay and more family-friendly workplaces.
Clinton, the favorite to win the Democratic Party’s nomination for the November 2016 election, intends the speech to outline the economic theory underpinning her campaign, in which she has promised to be a champion for “everyday Americans.”
Her nearest rival for the nomination, the socialist Vermont Senator Bernie Sanders, has drawn large crowds and has been steadily narrowing Clinton’s lead in polls by staking out positions that reflect the leftward shift of their party’s base.
Speaking at a historically progressive university in New York City, Clinton will say the size of the U.S. economy is best increased by policies that directly enrich the middle class, not by allowing wealth to accumulate among the richest few, according to an overview of the speech provided by her campaign and interviews with advisers.
The details and costs of her proposals will be made public later, the campaign said. This delay may add to complaints, especially from her party’s progressive wing, that her platform remains too vague to appraise.
Teresa Ghilarducci, an informal campaign adviser and a labor economist at the New School, where Clinton will give her speech, said the economic platform was not radical, but will show how her campaign pledges so far fit together in a coherent model.
“It’s a substantial argument that the government needs to complement private investment, and together they lead to economic growth,” she said.
Take Clinton’s expected call for federal support of universal pre-school, Ghilarducci said: in the short term, it helps free up toddlers’ parents who want to work; in the long-term, it produces a more skilled workforce, she said.
Steve Moore, a visiting fellow at the Heritage Foundation who has helped design the flat-tax plan espoused by Rand Paul, a Republican senator for Kentucky running for president, said Clinton’s proposals would likely hinder the economy and she would struggle to convince voters their stagnant fortunes might change.
“She’s going to have a hard time selling a program of increasing middle class incomes when the president she worked for lowered them,” he said, referring to Clinton’s stint as President Barack Obama’s secretary of state from 2009 to 2013.
On financial institutions, a favorite target of the left, Clinton has demurred to date on whether big Wall Street banks should be broken up by separating commercial banking from investment banking, as some in her party have called for as necessary to avoid a repeat of the 2007-2009 financial crisis.
But outside advisers to the campaign say she is expected to defend at a later date the Dodd-Frank financial reform act, which has been attacked by Republicans since its 2010 passage, and even say that it does not go far enough.
Clinton will say that laws and the tax codes reward financial trading too generously, while undervaluing other industries, such as construction and manufacturing.
Ghilarducci said a draft of the speech given to her by the campaign has Clinton calling for the closing of the carried interest tax loophole that allows many fund managers to pay a lower tax rate on much of their earnings. Clinton took this position in her last presidential campaign in 2007.
The financial services industry is also too focused on short-term growth and quarterly reports, which creates economic bubbles that leave the middle class in the lurch, Clinton will say.
Creating new rules on shareholder activism will help counter this, and she will argue for greater investment in infrastructure through an infrastructure bank and in research, including development of new sustainable energy sources.
Her rival Sanders has suggested increasing the tax rate for the richest Americans to more than 50 percent. Clinton has spoken only of reforming the tax code so the rich pay a fair share.
Clinton will say she wants to make it easier for people, and women in particular, to work by increasing access to child care, paid leave and paid sick days, areas where the United States is stingy compared to most other developed nations.
Clinton will again say the federal minimum wage of $7.25 an hour should be raised, although the size of the increase she has in mind remains unclear.
Clinton is likely to disparage, at least indirectly, a central pledge of former Florida Governor Jeb Bush, the favorite for the Republican nomination, who said he would aim to virtually double the U.S. economic growth rate to 4 percent. Economic success is better measured by how much incomes rise for middle-class people, she will say, rather than by any arbitrary growth target.
Writing by Jonathan Allen; Additional reporting by Luciana Lopez in New York and Amanda Becker and Alistair Bell in Washington; Editing by Ross Colvin, David Gregorio and Frances Kerry