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Clinton economic approach under scrutiny

December 27, 2014

WASHINGTON (AP) — If Hillary Rodham Clinton seeks the White House again, her message on the economy could be an important barometer as she courts fellow Democrats.

Members of her party are watching closely how the former secretary of state outlines steps to address income inequality and economic anxieties for middle-class families. Some members of the party’s liberal wing remain wary of Clinton’s ties to Wall Street, six-figure speaking fees and protective bubble.

Clinton is widely expected to announce a presidential campaign next year and remains the prohibitive favorite to succeed President Barack Obama as the Democratic nominee in 2016. But how she navigates a party animated by economic populism, an approach personified by Massachusetts Sen. Elizabeth Warren, could represent one of her biggest hurdles. Democrats bruised from Republican gains in the 2014 elections are pushing for big policy changes — raising the minimum wage and pay equity for women, for example — that favor the declining middle class.

“We don’t win when we play small-ball and calibrate. Why not try to be bold?” said Anna Galland of the liberal online advocacy group MoveOn.org, which launched a draft campaign to lure Warren into the race.

Warren says she’s not running for president, but her confrontational approach on Wall Street and reducing the gap between the rich and poor has generated a loyal following. She showcased this posture during December’s “lame duck” session of Congress, when she led the charge against a $1.1 trillion omnibus spending bill — ultimately signed by Obama — that weakened regulations on complex financial instruments known as derivatives included in 2010 in 2010 financial reform legislation and loosened contribution caps for some political donors. Clinton has yet to comment on the spending plan.

During the campaign for last month’s elections, Clinton often pointed to the broad prosperity during her husband’s administration and advocated for policies to raise the minimum wage, address pay equity for women and provide paid leave for new mothers.

In a nod to liberals, Clinton has voiced concerns about the concentration of wealth, pointing to the rise in income and wealth to the top 0.01 percent of the population. “Some are calling it a throwback to the ‘Gilded Age’ of the robber barons,” Clinton said in May.

Clinton also has stumbled on the economy. At a fall event, she drew criticism from Republicans when she said “don’t let anybody tell you that it’s corporations and businesses that create jobs.” She quickly cleaned up those comments, arguing that trickle-down economics had failed.

Her supporters point to her 2008 primary campaign, when she scored wins in Ohio and Pennsylvania, as an indicator of how she could connect with working-class families. They also downplay the differences between her and Warren on the economy.

“I think the debate is not going to be about big major fundamental directions for the economy. The disagreement will be how to get there,” said former Vermont Gov. Howard Dean, who has backed Clinton.

Clinton could have more opportunities to connect with — or alienate — liberals in 2015.

One moment could come on the nomination of Lazard investment banker Antonio Weiss to lead a Treasury Department office overseeing domestic finance. Weiss, Warren contends, would represent a long line of Wall Street executives who are part of the revolving door between Washington and the financial industry.

Clinton has not yet spoken publicly about Weiss’ nomination.

She remains a favorite of Wall Street from her time representing New York in the Senate. At a recent conference sponsored by the New York Times’ DealBook, Goldman Sachs chairman and CEO Lloyd Blankfein said he had “always been a fan of Hillary Clinton” and argued it was important for political leaders to have relationships with key institutions. “I certainly don’t think it’s a virtue to declare a big segment of the economy off limits,” he said.

Promoting economic growth and wages will also be on the calendar. The AFL-CIO trade union federation has invited Warren to deliver the keynote address at its national summit on wages in early January, giving her a plum appearance before labor leaders.

About a week later, the Center for American Progress, which was founded by ex-Clinton administration officials, will release a report offering ways to spur middle-class growth, ideas that might guide Clinton’s agenda. The panel is co-chaired by Lawrence Summers, a former Treasury secretary under Bill Clinton.

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