Kerry, Edwards win on their ideas

Each had a signature means of identifying with the primary, primal force at work in the campaign thus far -- the severe economic and financial hardships faced by most American households, not just the conflict in Iraq and not merely unfocused anger at President Bush.

For Kerry it was the maddening cost and severe limits of health insurance for the 160 million-plus Americans who have it and are driven to distraction by its rules and soaring premiums, co-payments, and deductibles; he has a plan to save everyone an average of $1,000 a year on their costs. For Edwards, it was the sharp deterioration in recent years in the typical household's financial condition, exposing families to near-catastrophe from even the slightest setback in their employment or income situations; he also has a plan, to have the government match private savings dollar for dollar outside the Social Security system.

As the competitive phase of the campaign reaches another turning point with the tabulation of the Wisconsin primary results this week, the noise about Vietnam records and personal lives deserves some competition from health care costs and family economics. If Kerry is smart, he will encourage this, and if he is indeed in the process of ending the contest for the nomination, he would also be smart to borrow Edwards's ideas.

As the general election looms, these successful Democrats offer a trade in return for the repeal of this decade's tax cuts for those with more than $200,000 in income. (With an intellectual assist from Joe Lieberman, I don't think it is entirely an accident, either, that they have succeeded by advocating the retention of the tax cuts for the majority of households, while Howard Dean and Dick Gephardt have found less favor for advocating total repeal.)

Among other things, Edwards has been unique in proposing that the government match (with a refundable tax credit) $1,000 of each person's annual savings up to an income ceiling of $50,000. For someone who started at age 25, that would help build a nest egg of $250,000 at retirement. He is also unique in proposing another tax credit to fund the first $5,000 of a house downpayment (it would cover up to half the money down on a $100,000 residence). Edwards also stands out for proposing an all-out assault on the predatory lending schemes that working families in need of credit have been forced to turn to in today's Las Vegas economy. In short, he is proposing that working families get back a financial cushion they lost to the soaring costs of necessities over the last 20 years.

Kerry's special contribution has been to focus as much on those who have health insurance and hate it (most of us) as on those who have no coverage at all (44 million and rising). As he put it in the Iowa-New Hampshire days of detailed dialogue, he proposes a deal with business and with state government for the benefit of individuals.

So-called catastrophic health expenses would be 75 percent covered by the federal government and capped at $50,000, and Medicaid would be expanded so that Washington would cover the cost of basic insurance for all children, as well as early retirees and the unemployed. In return, states would pick up families with incomes above 300 percent of the poverty level, and individuals above 200 percent. Kerry argues the trade would work politically because states would come out well ahead.

For business, in addition to the enormous help of capping catastrophic costs, there would be a 50 percent tax credit on insurance costs for the self-employed and additional tax aid for small businesses. In return the government would require that every business have a "wellness" plan to promote preventive care and that all cost savings be passed through to the worker (a genuine economic stimulus).

The much-too-hidden story of the past generation is the damage the soaring cost of necessities (from housing to health care to utilities) has done to eliminate the advantage a second income used to provide, as well as to all but eliminate saving. At the current pace, the typical household is more likely to endure bankruptcy than divorce. Issues have complex impacts on presidential politics, but I don't think it's a coincidence that the two candidates who have understood what is really going on in American households have come out on top. They connected with the voters, and they have earned their success.

Thomas Oliphant's e-mail address is oliphant@globe.com.