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Govs. John Hickenlooper and John Kasich appeared together at an event focused on “forgotten Americans.”
WASHINGTON — Two outgoing governors often billed as moderates in their respective parties, and seen as possible presidential contenders in 2020, outlined education and tax policies here Wednesday that they believe could help Americans who’ve been left behind economically.
Govs. John Kasich, Republican of Ohio, and John Hickenlooper, Democrat of Colorado, are both nearing the end of their second terms and, due to term limits, are not up for reelection. Kasich called for an overhaul of the K-12 school system, while Hickenlooper entertained the idea of swapping payroll taxes for a value added tax, or VAT.
The pair appeared together at an event held by the Brookings Institution to highlight the release of “The Forgotten Americans: An Economic Agenda for a Divided Nation,” a book by Brookings fellow Isabel Sawhill that examines the nation’s current economic, cultural and political rifts.
Kasich took the position that the nation’s K-12 education system “simply doesn’t work” as is.
“I don’t blame the teachers. But the system is broken,” he said. “We are operating a school system based on a bunch of people working in the fields.”
Pressed later by an audience member about what was stopping his state from implementing changes to education, Kasich said Ohio had made some progress, citing state efforts to step in and take over consistently failing schools and specific reforms in Cleveland.
He also said that some changes he had proposed, like requiring a non-elected business person on every school board to help guide curricula, and stipulating that teachers periodically spend a few days observing private businesses, failed to gain traction with lawmakers.
“It’s hard,” the governor said.
Hickenlooper acknowledged limits to how much Colorado could dictate policies for local school districts in the state. But he also said there were ways to offer incentives and to highlight models that work well. He pointed to schools that had improved their performance after extending school day hours and the academic year as an example of a positive policy change.
“All these kids had come from lower-income, chaotic homes where they had a hard time doing their homework,” he said. Now, he added, “they’re doing their homework in school.”
On taxes, Hickenlooper suggested cutting payroll taxes, which are paid on the wages and salaries of employees, and imposing a value added tax, a consumption tax similar to a sales tax, that is paid at each step of the supply chain where value is added to a good.
The Colorado governor also floated the idea of raising the salary threshold where people must get overtime pay, so that salaried workers who earn more would be eligible for overtime, rather than earning a fixed, but relatively low, salary while working long hours.
Sawhill was on hand at the event to discuss her book, which zeros in on the roughly 38 percent of working age Americans who do not have four-year college degrees and are in the bottom half of the nation’s income distribution. About half are white, and half are minorities.
Referring to the “white working class” in particular she added: “If we want to understand the populist streak in our politics right now, we have to understand this group.”
The author noted that upward economic mobility in America has been declining, income inequality is historically high, and wages are stagnant, especially for less educated people.
People she spoke to for the book in upstate New York, North Carolina and Missouri indicated that they understand the importance of acquiring job skills, but are skeptical of college. They also expressed concern about low wages and a lack of appreciation from employers.
Another takeaway, according to Sawhill: “they are enormously cynical about government.”
Retraining and relocation efforts for people struggling economically are important, Sawhill said.
She also raised the idea of a tax credit for workers earning under about $40,000 annually to offset payroll taxes and bump up take-home pay. This could cost about $1 trillion over 10 years, based on some estimates. Sawhill said an option to pay for it would be revisiting recent changes to the estate tax, which is levied on inherited property, and moving back to where the tax was in the early 2000s.
Using tax policy to nudge companies toward providing additional training for workers, and profit sharing and employee ownership initiatives, was another option she mentioned.
Turning to the nation’s cultural divides, Sawhill recommends possibly making universal a year of national service for young people, either in a civilian setting or in the military, while also asking families to host young people doing civilian service.
Bill Lucia is a Senior Reporter for Government Executive's Route Fifty and is based in Washington, D.C.