Given all the bad news for Republicans, Democrats have been handed a golden opportunity to redefine their tired image and build momentum to generate a lasting majority. Disaffected Americans are shopping for a new direction. It is a time to show them your new models.

Resident Scholar Kevin A. Hassett

That opportunity has been utterly squandered.

As Democrats look toward controlling the U.S. House of Representatives for the first time in 12 years, they have been surprisingly candid about their legislative priorities, including their economic agenda. The most outspoken Democrat has been House Minority Leader Nancy Pelosi, who recently enumerated what initiatives the party would advance in the first 100 hours should she assume the role of speaker of the House.

Rather than provide voters with a new agenda that reflects a willingness to change, Pelosi's agenda is simply a laundry list of the Democrats' most economically questionable proposals from days gone by. It could just as easily have been written by Walter Mondale, Hubert Humphrey or even Adlai Stevenson.

A look at a few of the tidbits will give you the general idea. After rule changes affecting lobbying and enacting the 9/11 Commission's suggestions, the first economic policy Democrats would advance would be raising the federal minimum wage to $7.25 an hour. This might give legislators warm fuzzy feelings about how much they have helped low-income workers without spending any tax dollars, but it will drive many such workers out of jobs.

Thank the Unions

It is hard to see how it helps social justice if we tell Peter that he is unemployed because we want to give Paul a raise. But that is the Democrats' top priority. The fact that they are heavily funded by unions, which wish to drive up the costs of nonunionized competitors, has nothing to do with this issue being near the top of the list, of course.

Democrats would--surprise--also roll back the Bush tax cuts on people making incomes above a certain amount, with $250,000 to $300,000 the range suggested by Pelosi.

The timing for such a measure could hardly be worse. With the economy slowing into a soft landing, this massive tax increase might well be just what we need to cast us into recession. Thrusting the economy into harm's way, given the Democrats' ideology, appears to be a small price to pay, so long as we can extract a pound of flesh from each “rich” person.

Slamming the Taxpayers

If the Republicans hold firm, and refuse to extend any of the Bush tax cuts unless all are extended, then Americans will be looking at an almost unprecedented increase in their tax bill. If the Bush tax cuts were allowed to expire, the U.S. Treasury estimates that 115 million taxpayers would see an average increase of $1,716. Families with children would, on average, see their taxes go up by $2,084. Small business owners, on average, would see a tax rise of $3,637.

These and other entrees on Pelosi's wish list imply a worldview that puts little stock in the idea that marginal economic incentives have an impact on behavior. That worldview holds that tax rates can be increased without affecting effort, and minimum wages can be pushed up without harming employment.

Along with that, comes a worldview that is gloomy toward the American economy. What economic growth we have is for the rich, not the little guy, it holds. Poor, helpless Everyman needs a big government to step in and protect him.

Becoming France

Democrats have been on such a political losing streak for so long because Americans have grown to respect the free-market system. They recognize that capitalism emerged victorious from the struggle with communism because markets work far better than bureaucrats. They see the prosperity all around them, and recognize that it came about because we are still one of the freest economies on earth.

Pelosi and her ilk believe that they lost in the past because they didn't adequately convince Americans with their near-socialist rhetoric.

My guess is that they are wrong, and that Americans who are tired of the Iraq war and the Mark Foley scandal are not so tired that they want to become France.

As the bad polls have piled up in recent weeks, the only comfort for Republicans has been the notion that Democrats have consistently exhibited an impressive ability to snatch defeat from the jaws of victory. If voters take a look at the Pelosi agenda, then the Democrats might well have done it again.

Kevin A. Hassett is a resident scholar and director of economic policy studies at AEI.