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Hillary Clinton Offers Her Vision of a ‘Fairness Economy’ to Close the Income Gap

Chelsea Galinos, 21, a student at the New School, waited to show a painting to Hillary Rodham Clinton, right, after her speech.Credit...Damon Winter/The New York Times

In the most comprehensive policy speech of her presidential campaign, Hillary Rodham Clinton on Monday presented her vision of a “growth and fairness economy,” an economic agenda intended to lift middle-class wages, expand social services, and increase taxes on the wealthiest Americans to combat a widening gap between rich and poor.

Mrs. Clinton said “the defining economic challenge of our time” is raising incomes for the vast majority of Americans whose wages have remained virtually stagnant for 15 years as the costs of housing, college, child care and health care have soared.

“We must raise incomes for hard-working Americans so they can afford a middle-class life,” Mrs. Clinton said in a speech at the liberal New School in Greenwich Village in New York. “That will be my mission from the first day I’m president to the last.”

The widespread feeling that the economic recovery has not benefited large parts of the population has helped frame the 2016 presidential race. But devising an agenda that addresses income inequality without vilifying the wealthy has been a central challenge of Mrs. Clinton’s early candidacy, and for weeks she pored over policy briefings and academic papers and fielded advice from 200 policy experts who often offered divergent opinions.

Mrs. Clinton did not sign off on a final version of her speech until just before she took the stage, according to advisers involved in the process who would discuss private conversations only unless they were not named. At the last minute, Mrs. Clinton decided to criticize by name three of her potential Republican rivals, adding Senator Marco Rubio of Florida and Gov. Scott Walker of Wisconsin to the speech in addition to Jeb Bush, the former Florida governor. And considerable hand-wringing went into deciding how forcefully to speak about criminalizing financial industry executives before an audience made up largely of her Wall Street donors.

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Hillary Clinton Lays Out Economic Plan

Hillary Rodham Clinton, a candidate for the Democratic presidential nomination, laid out details of her economic plan on Monday, focusing on raising workers’ wages.

SOUNDBITE (English) Hillary Rodham Clinton, Democratic presidential candidate: “Families who work hard and do their part deserve to get ahead and stay ahead. The defining economic challenge of our time is clear, we must raise incomes for hard working Americans so they can afford a middle class life. We must drive strong and steady income growth that lifts up familes and lifts up our country.” SOUNDBITE (English) Hillary Rodham Clinton, Democratic presidential candidate: “The measure of our success must be how much incomes rise for hard-working families, not just for successful CEOs and money managers and not just some arbitrary growth target untethered to people’s lives and livelihoods.” SOUNDBITE (English) Hillary Rodham Clinton, Democratic presidential candidate: “Republican governors like Scott Walker have made their names stomping on workers rights, and practically all Republican candidates hope to do the same as president. I will fight back against these mean-spirited misguided attacks.”

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Hillary Rodham Clinton, a candidate for the Democratic presidential nomination, laid out details of her economic plan on Monday, focusing on raising workers’ wages.CreditCredit...Damon Winter/The New York Times

In the end, Mrs. Clinton did forcefully denounce fraud and manipulation of currency in the financial sector and said there could be “no justification or tolerance for this kind of criminal behavior,” language that some of her top Wall Street backers had been told of in advance. But Mrs. Clinton also appealed to the private sector and Wall Street to work with the government to help lift middle-class wages through long-term investment in employees rather than focus on quarterly results.

“The truth is, Hillary, and I’ve always said this, she is a bold but practical progressive,” said Neera Tanden, the president of the Center for American Progress, a liberal think tank, and one of the many advisers who helped Mrs. Clinton write the speech. “I really think that’s the stamp of her vision on this.”

That vision may not appease the restless left of the Democratic Party, and it may not assuage concerns among moderates and independents that Mrs. Clinton is a tax-and-spend liberal. But aides said the speech — even with all of the disparate voices that had weighed in to draft it — presented the clearest encapsulation yet of what Mrs. Clinton’s economic doctrine would look like, and the way in which it would be both similar to and distinct from the policies of her husband, former President Bill Clinton, and President Obama.

“Both of them were coming into recessions; she is walking into stagnation,” said Matt Bennett, a senior vice president at Third Way, a centrist think tank.Mrs. Clinton’s assessment Monday of the country’s economic problems, and the message she will carry throughout the campaign, rested entirely on what economists refer to as “the great wage slowdown,” a problem that has persisted through recent administrations, both Democratic and Republican. It has only worsened as globalization and new technology put added pressures on middle- and low-income earners, and has been exacerbated by the rising costs of housing, education and retirement.

The problem has led to widespread frustration; two-thirds of Americans said they thought the distribution of money and wealth in this country should be more even, according to a New York Times/CBS News poll conducted in late May.

In her speech, Mrs. Clinton blamed Republicans, pointing to Mr. Walker, Mr. Bush and Mr. Rubio, specifically, for “trickle down” policies that “give more wealth to those at the top, by cutting their taxes and letting big corporations write their own rules.”

Republicans lost little time in firing back. “It’s pretty clear: She will have to raise taxes on American families,” Allison Moore, a spokeswoman for the Republican National Committee, said of Mrs. Clinton’s proposals. “There’s no way around it.”

But Joseph E. Stiglitz, a Nobel laureate in economics who has written extensively about inequality and is now an adviser to Mrs. Clinton, said that “the speech showed a clear understanding that our economy is not working for most Americans” and that “we need to fundamentally rewrite the rules.”

To that end, Mrs. Clinton called for closing corporate loopholes, eliminating the “carried interest” loophole that allows some financiers to avoid paying millions in income taxes, and expanding the 2010 Dodd-Frank financial regulation bill. And while she did not present details of her tax policy, she said she would delve more deeply into policies that would “rein in excessive risks on Wall Street” in the coming weeks.

Still, she did not embrace the fiery populism of Senator Bernie Sanders of Vermont, one of her Democratic opponents, whose message has helped him draw big crowds in Iowa and New Hampshire. And she stopped short of endorsing policies championed by Mr. Sanders and others in the liberal wing of the party, including breaking up the big banks and a financial transaction tax, or a government fee on the sale or purchase of certain financial assets.

“She gave something rhetorically to both sides, and she didn’t go too far that either side got uncomfortable,” Mr. Bennett said.

A heckler who interrupted Mrs. Clinton with a question about whether she would reinstate the Glass-Steagall Act seemed to disagree. The act, which Mr. Clinton repealed parts of in 1999 leading to the commingling of commercial and investment banking, is widely criticized by liberals as contributing to the 2008 financial crisis. But Alan S. Blinder, a former White House economic adviser under Mr. Clinton who helped Mrs. Clinton shape her proposals, told Reuters she would not reinstate the 1933 act, which many economists believe is antiquated.

Mrs. Clinton did express her concerns about the emergence of a potentially bigger problem, so-called shadow banking, the system of hedge funds and algorithmic traders that has thrived in the wake of the 2008 financial crisis with little to no government regulation. “Too many of our major financial institutions are still too complex and too risky,” Mrs. Clinton said.

Some of what Mrs. Clinton presented, particularly a plan that would offer companies incentives to increase profit-sharing with employees and that she will pitch in more detail to voters in New Hampshire on Thursday, left some liberal economists skeptical.

“It’s unlikely companies are ever going to give something for nothing,” said Dean Baker, an economist and co-director of the Center for Economic and Policy Research.

Other proposals, like raising the federal minimum wage, expanding overtime benefits and promoting equal pay for women, had the feel of a laundry list of standard Democratic proposals advanced by Mr. Obama in his State of the Union address in January.

Predictable or not, the economic vision Mrs. Clinton presented on Monday placed a strong emphasis on the issues she has long advocated, including helping women in the work force by advancing “fair scheduling, paid leave and earned sick days”; providing better access to early childhood education; and addressing rising health care costs.

“I’m well aware that for far too long, these challenges have been dismissed by some as ‘women’s issues,’ “ she said. “Well, those days are over.”

Find out what you need to know about the 2016 presidential race today, and get politics news updates via Facebook, Twitter and the First Draft newsletter.

A version of this article appears in print on  , Section A, Page 13 of the New York edition with the headline: Clinton Offers Her Vision of a ‘Fairness Economy’ to Close the Income Gap. Order Reprints | Today’s Paper | Subscribe

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