In the 1930s, Franklin Delano Roosevelt’s New Deal coalition secured a realignment of American politics. The Republican victory on November 5 affords the opportunity for a new realignment: a Grand New Bargain that would deliver for Americans of modest incomes. The Grand New Bargain is a chance for an expanded GOP, but realizing its promise will take considerable political agility.
Right now, Republicans have an opening with the working-class voters who proved instrumental to their win. Institutional capture by progressive elites has pushed the Democratic Party far to the left on cultural issues, repelling many Americans without a college degree. Skyrocketing inflation during the Biden years ravaged the pocketbooks of working- and middle-class families. According to Census data, the inflation-adjusted median income in 2023 was lower than it was in 2019. The border crisis, supply-chain crunches, and escalating instability abroad sent the message to Americans across the income spectrum that normal had not returned under the Biden administration. As a result of racking up support from ethnically diverse blue-collar Americans upset with their economic situation, Donald Trump is the first Republican presidential nominee in 20 years to win the popular vote.
The Trump 2024 campaign also enjoyed an infusion of energy from the tech sector. Elon Musk and other tech titans see in a second Trump White House the chance to break through regulatory and institutional sclerosis that has held the United States back from a new technological frontier.
Striking a Grand New Bargain will demand balancing the impulses of more communitarian populists and those of pro-abundance disruptors. Tensions exist between Main Street and Silicon Valley at times, but so do affinities; growth is, after all, one of the greatest forms of uplift for Americans of modest means. The challenge facing a Grand New Bargain is unlocking this growth, while also tightening the labor market and otherwise ensuring that families will benefit from a rising tide.
Enacting the Grand New Bargain will involve a range of policy sectors. The border breakdown supercharged Trump’s successful bid to recapture the presidency, and most Republicans (and Americans in general) believe that regaining control at the border is a top priority. Ending the asylum crisis and restoring credibility for interior enforcement are crucial. Enforcement actions do not have to be draconian in order to be effective; mandatory E-Verify to ensure the legal status of workers or defunding sanctuary jurisdictions could dramatically curtail the incentives for unauthorized migration. Joe Biden’s tightening of asylum policies at the border in the middle of 2024—by blocking asylum claims for those intercepted between ports of entry—had a measurable effect in reducing unauthorized migration. Even without important legislative fixes, vigorous executive action can help restore border stability.
Legal immigration may prove a divisive issue for the coalition. Some business voices have called for a major expansion of legal immigration, so that technical workers with college degrees can more easily come here. But opening the gates for legal immigration in that sense could discourage businesses from cultivating domestic talent, including finding pathways for non-college Americans to work in high-paying fields. Shifting some visas under the current system from family or “diversity” preferences to employment-based immigration could be a half-measure that might appeal to both interests: while not increasing net migration levels, it would also reorient the immigration system more toward skills.
Many blue-collar voters want a robust social safety net, which might make an austerity agenda a bad fit for Republicans’ new populist coalition. But many of these voters also resent excessive government regulation, which can hamper economic innovation and growth. Trump boasted on the campaign trail about his record cutting red tape as president, and a targeted reform of federal regulations seems like a key part of a blue-collar abundance agenda. For instance, reform of permitting processes could speed up construction of infrastructure, factories, and energy-production facilities. For many tech innovators, updating and streamlining regulations are essential for keeping the United States a leader in next-generation technologies. The National Environmental Policy Act and other regulations have interfered with the development of commercial spaceflight—and a more flexible regulatory environment could help SpaceX and others seize the moment. Headed by Elon Musk and Vivek Ramaswamy, the newly formed Department of Government Efficiency (DOGE) could be one vehicle for diagnosing where the administrative state has kludged up the market.
Energy is another sector where working-class and pro-growth interests intersect. Cutting energy costs is good family economics and can build out a bigger industrial base. Cheap energy is an industrial policy that many in the coalition could get behind, and cutting the costs of energy could also help relieve inflationary pressures.
Health-care costs not only strain family and federal budgets but are also a strategic obstacle for companies seeking to compete internationally. Efforts to encourage innovation in the health sector, expand the supply of medical services, and diversify supply chains for medical equipment would serve both populist and national-security interests. More broadly, renewing the American manufacturing ecosystem could help strengthen national defense and pave the way for innovation in the future, as hands-on experience in manufacturing can help spur the development of new technologies.
The impending expiration of individual portions of the Tax Cuts and Jobs Act will bring Republicans to the negotiating table next year. While some tough trade-offs will no doubt be necessary, a Grand New Bargain approach to tax reform would prioritize the interests of families, such as by boosting the child tax credit. A pro-growth component of tax reform would enable businesses to receive tax benefits for domestic research and development, as called for by multiple bipartisan tax proposals. Adjusting the tax code so that it rewards investment in the nation’s economic infrastructure would serve the long-term interests of growth and family prosperity.
The Grand New Bargain cannot afford to ignore either the demands of social solidarity or the potential of economic dynamism. An expanding economic pie can temper social conflict and might even help foster the conditions for addressing American fiscal challenges. American voters are looking for more than handouts from well-intentioned wonks. They want to reclaim their own economic agency in an economic landscape that allows them to provide for their families. Tightening the labor market, expanding paths to economic success beyond the college-degree route, and cutting costs for health care and energy could all be part of that larger effort. The swing toward Republicans in many cities and Democratic political strongholds, coupled with the results of many quality-of-life ballot measures, also indicates that the Grand New Bargain goes beyond questions of political economy. Voters are looking for a full-spectrum effort to reinforce social stability. It promotes social openness and overall well-being when people can walk the streets without fear or shop at a store without having to call a clerk to open a plastic barricade.
There are high political stakes here for Republicans. Trump’s unique media talents and willingness to shatter orthodoxies have helped him forge a bond with blue-collar voters, but Republicans will need a new standard bearer in 2028. They have a limited time to prove that they can fulfill their commitments to working-class Americans. The British Tories seemed on the verge of a grand realignment in 2019, but they failed to uphold their campaign promises (especially on immigration) and faced a brutal electoral reckoning five years later.
But the Grand New Bargain also goes beyond partisan politics. The bifurcation of American society between college- and non-college voters has become a significant driver of political division and civic alienation. The accumulation of negative indicators—from the opioid epidemic to falling life-expectancy—is a sign that change is needed. The Grand New Bargain could help renew the American compact.
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