New York Sen. Hillary Rodham Clinton, a possible White House contender in 2008, said on Monday the Bush administration had hurt working Americans and Democrats must offer new ideas to strengthen the middle class.

"Americans are earning less while the costs of a middle-class life have soared," Clinton told the centrist Democratic Leadership Council, a group that aided her husband Bill Clinton’s rise to the presidency in 1992 but has clashed in recent years with the party’s more liberal wing.

"A lot of Americans can’t work any harder, borrow any more or save any less," she said in unveiling the group’s "American Dream Initiative," a package of proposals to make college and home ownership more affordable, help small businesses, improve retirement savings and expand health insurance coverage.

Clinton said President George W. Bush and Republicans had "made a mess out of the country’s finances." Rewriting her husband’s famous 1992 campaign slogan, "It’s the economy, stupid," she declared: "It’s the American dream, stupid."

The yearlong initiative headed by Clinton was designed to give the party new ideas for midterm elections in November and for the White House race in 2008.

Clinton said she hoped the agenda would "unite Democrats and help elect Democrats" in November, when the party must pick up 15 seats in the House of Representatives and six seats in the Senate to regain control of Congress.

"This plan will make the basics of life in the middle class — health care, education and retirement — affordable for those who take responsibility," Clinton said.

"These ideas will make sure every American will get a fair wage, access to college and home ownership and a path out of poverty and into the middle class," she said.

Two other possible 2008 presidential contenders, Iowa Gov. Tom Vilsack and Indiana Sen. Evan Bayh, also addressed the conference of 375 elected Democratic officials from 42 states.

"Everybody in the country understands what this administration has done wrong," Vilsack said. "It is important now for this country to understand what we need to do that’s right."

Bayh said Democrats needed to reach out to the middle class if they wanted to reclaim control of Congress.

Republican National Committee spokesman Danny Diaz rejected the Democratic claims about the economy.

"Only liberal Democrats like Hillary Clinton could attack an economy that has produced 5.4 million jobs in the last three years, grew 5.6 percent in the first quarter, increased payroll employment in 47 states and is the envy of the industrialized world," he said.

While much of the agenda covers familiar Democratic territory, it adds some new flourishes. An "American Dream Grant" would award money to states based on attendance and graduation from state colleges, while American Dream Accounts would enhance retirement savings and federally funded $500 "baby bonds" would be issued to each child born in America.

It also includes a commission to evaluate corporate subsidies and new rules to rein in federal spending.

The agenda is one of several packages of Democratic ideas floated by party groups and leaders who have yet to rally around a single party-wide agenda similar to the successful Republican "Contract with America" in 1994.

© Reuters 2006