THE STATE OF THE AMERICAN DREAM

For 230 years, Americans have been united by the common dream of a future even greater than our past. The promise of American life, handed on through a dozen generations, rests on this basic bargain: Each of us should have the opportunity to live up to our God-given potential, and the responsibility to make the most of it. In America, anyone willing to work for it deserves the chance to get ahead.

In the 20th century, that basic bargain built the greatest middle class the world has ever known. The expansion of opportunity in return for hard work and sacrifice made us the richest, safest, strongest nation on earth. It gave us the will and the means to improve our way of life for all here at home, and to conquer fascism and communism abroad. Our values, our culture, and our politics became part of a common quest to make tomorrow better than today.

We ended the last century with America's economic might at its zenith, with Americans at their most optimistic, and with nearly all who endeavored to make the most of their opportunities and talents getting ahead in life. Yet over the last five years we've taken a different direction -- one that offered the greatest help to those with the most wealth under the mistaken belief that when the wealthy do even better, the middle class will eventually get their share. A policy of fiscal discipline and budget surpluses was abandoned for one that racked up record debt and proclaimed that deficits don't matter.

That misguided economic philosophy has shortchanged America, and shaken the foundations of the American Dream. For the first time ever, we've had four straight years of rising productivity and falling incomes. Many Americans are earning less, while the costs of a middle-class life have soared: In the past five years, college costs are up 50 percent, health care up 73 percent, and gasoline more than 100 percent. Rising housing costs have driven people farther and farther from their work.

The increasing costs of health care, transportation, and retirement are holding our economy back. U.S. companies and workers have to compete against companies and workers from countries that have made education the top national priority, take energy efficiency seriously, and spend half as much on health care as we do, with better results. Squeezed by rising costs and rising pressures of the global economy, American employers struggle to keep up their part of the bargain to create jobs and help workers do better.

As Washington has piled on over $1 trillion in new debt, many families have also been forced to borrow more at higher interest rates and have stopped saving altogether. From a period of confidence and affluence only six years ago, Americans are now saddled with record debt, and the savings rate last year was negative for the first time since the Great Depression. A lot of Americans can't work any harder, borrow much more, or save any less.

These trends are not just a burden on our economy and on middle-class families. They undermine our way of life, because middle-class strength and growth have been the backbone of America.

Together we can face that challenge. Throughout our history, America has responded to new challenges with a new faith in our basic bargain. The world has changed over the past 50 years, and the terms of our basic bargain must keep pace.

The chance for every American to get ahead, regardless of background, is the engine of America's economic growth and social progress. A growing economy and a growing middle class go hand in hand. After World War II, the investments America made in the American Dream -- from sending millions of veterans to college on the GI Bill to making housing affordable through the FHA -- spurred economic growth and enabled ordinary people to take advantage of that growth. Today, as then, the key to expanding the middle class is both increasing economic growth and increasing ordinary Americans' opportunity to make the most of it. The fiscal discipline in this agenda provides a firm foundation for economic growth. The investments in the American Dream will increase innovation, expand job creation and income growth, and help every American take advantage of the nation's economic progress.

To remain strong in the world, the American Dream must be strong and alive here at home. And as we continue to navigate through these changing economic times, restoring the promise of the American Dream is the central economic issue of our time. We will not stand for a national government that would let the American Dream just fade away.

The American Dream Initiative is an opportunity agenda for the middle class and all who aspire to join its ranks. Our vision is straightforward and clear: to leave our children a richer, safer, smarter, and stronger nation than the one we inherited. We believe that every citizen should have the opportunity to secure the pillars of the American Dream: a college degree, a home, a secure retirement, and the chance to get ahead in a growing economy.

A NEW OPPORTUNITY AGENDA

Here are the pillars of a new opportunity agenda:

• Every American should have the opportunity and responsibility to go to college and earn a degree, or to get the lifelong training they need.
• Every worker should have the opportunity and responsibility to save for a secure retirement.
• Every business should have the opportunity to grow and prosper in the strongest private economy on earth, and the responsibility to equip workers with the same tools of success as management.
• Every individual should have the opportunity and responsibility to start building wealth from day one, and the security and community that come from owning a home.
• Every family should have the opportunity to afford health insurance for their children, and the responsibility to obtain it.
• In order to expand opportunity for all Americans, we must demand a new ethic of responsibility from Washington: to put government's priorities back in line with our values -- and its books back in balance -- by getting rid of wasteful corporate subsidies, unchecked bureaucracy, and narrow-interest loopholes; collecting taxes that are owed; clamping down on tens of billions of dollars in improper payments and no bid-contracts; and restoring commonsense budgeting principles like pay-as-you-go.

An opportunity agenda that gives everyone the chance to get ahead offers the best formula for economic growth. College and training are the key to individual advancement, and a workforce of college graduates and highly trained workers is the key to giving America a competitive edge in the world economy. Producing more college graduates will make our economy grow faster by driving more innovation and attracting more high-value, high-paid jobs. Reducing health care costs and giving individuals the tools to prepare for a secure retirement will not only provide individuals a better life, but will unleash American business to grow faster by reducing a major competitive disadvantage in the global economy. Expanding homeownership creates jobs even as it strengthens families.

Demanding fiscal responsibility bolsters long-term economic confidence and helps lower interest rates. Cutting corporate welfare helps the economy grow faster by putting our faith in free markets, instead of special favors, and by ending unproductive investments in narrow interests so that we can invest in productive efforts to help the whole economy grow.

An opportunity agenda to save the American Dream is the strongest economic agenda for the 21st century. The best way to help America get ahead is to give Americans the tools to get ahead.

A NEW ETHIC OF RESPONSIBILITY IN WASHINGTON

To provide opportunity for all Americans, we must first hold Washington accountable for the Responsibility Era this administration promised but never even tried to deliver. Over the past five years, the national debt has more than doubled. The Bush administration ushered in runaway spending and tax cuts for the wealthy, putting us deep in debt to our economic competitors even as we must fight a prolonged war on terror.

Prolonged deficits and the fiscal laziness they encourage are themselves a threat to the American Dream. A country built on its belief in the future shouldn't be doling out special interest favors that will leave us worse off down the road.

If we are willing to restore accountability to government, we can cut the deficit and make important long-term investments at the same time:

• Cutting Wasteful Corporate Subsidies. This administration and Congress have turned Washington into a cash machine for narrow interests. The U.S. now spends scores of billions every year on unnecessary business subsidies that distort the market and discourage competition. We need to create an independent, non-partisan commission to scrutinize and propose the elimination of wasteful, outdated business subsidies. By presenting its recommendations to Congress for an up-or-down vote, this commission would produce $200-$250 billion in savings over 10 years.
• Cutting Unnecessary Federal Consultants by 100,000. The number of federal consultants and contractors has exploded to more than 5 million. Cutting 100,000 unnecessary federal consultants and contractors would save $50 billion over 10 years that could go toward more opportunity and less bureaucracy.
• Third-Party Reporting of Capital Gains. According to Tax Notes, the United States is losing billions of dollars in revenues from underreported capital gains. It is bad enough that the Bush administration has given the wealthiest Americans capital gains tax cuts they do not need; it is worse to see even those shrinking obligations go unpaid. We should require securities firms to report to the IRS not only the sale of assets, but the amount of capital gains. This change alone would produce $250 billion in new revenue over the next decade.
• An End to Spending and Giving Away Money We Don't Have. We need to restore pay-as-you-go rules so Congress can not enact new spending programs or tax cuts without offsetting savings to pay for them. Congress must restore annual caps on discretionary spending. We also need to make sure we are collecting taxes that are owed and that we're clamping down on tens of billions of dollars in improper payments and no-bid contracts. In addition, we should increase transparency over government by making information on contracts and grants available to the public so they have a better sense of whether their tax dollars are being spent wisely.