By Jon Greenberg on
Wednesday, October 23rd, 2019 at 12:06 p.m.
Elizabeth
Warren took a pounding from fellow Democrats in a recent primary debate for not
having a plan to pay for her single biggest proposal, the sweeping health care
overhaul known as "Medicare for All."
Warren
said at a campaign stop in
Indianola, Iowa, that she would release a plan in a few weeks.
"This
is something I've been working on for months and months, and it's got just a
little more work until it's finished," Warren said Oct. 20. "But
there's the promise I make to you, and make every chance I get. And that is, I
will not sign a bill into law that does not reduce the cost of health care for
middle class families, because it is the cost of health care that is hurting
families."
For all
of the attention on the trillions required for Medicare for All, Warren has dozens of policy proposals — by our count, over 40
that involve new spending and revenues. (See our table with the
details on the larger proposals.)
Many
come with big dollars attached. Warren’s plan to provide universal child care
and pre-school would cost over $1 trillion over 10 years.
In some
cases, Warren ties new spending to a new revenue source. For example, she would
impose a tax on wealth beyond the
$50 million mark, raising an estimated $2.75 trillion over 10 years.
She’d use that to pay for child care, opioid treatment, student debt cancellation,
universal public college, election security and a small business start-up fund.
For
some proposals, she gives only the broadest suggestion of how she’d pay for
them. Take her $1 trillion clean energy
plan, borrowed from former candidate Jay Inslee: She offers to pay
for it by "reversing Trump’s tax cuts for the wealthiest individuals and
giant corporations."
We
asked for details and got none. That doesn’t mean the funding source wouldn’t
cover the costs. But we have no way to tell if it would.
Warren’s
signature call to Americans is "dream big." With the first caucus and
primary votes only a few months away, we thought it was time to see how much
her dreams cost.
We went
through her plans with an eye toward tallying the total price tag and the money
to pay for it.
All
told, we counted $7 trillion in new spending over a 10-year period, and that’s
without Medicare for All. On the flip side, Warren offered specific tax
proposals that came to $4.55 trillion. All numbers reflect face-value amounts,
with no adjustments for how tax collections or economic activity might change.
The new
spending included $1.3 trillion that came with only broadly defined tax
changes or no defined funding source at all.
Until
she releases her funding plan, we don’t have Warren’s price tag on Medicare for
All. To get the best idea we could, we used the latest estimate
from the Urban Institute and the Commonwealth Fund, two groups that study
health policy. That study puts new spending at $34 trillion, offset by about $2
trillion in existing taxes.
We
didn’t include Warren’s estimates of the economic ripple effects of her plans,
which could have a substantial impact on the federal budget. For universal
child care, for example, child care workers would earn more, and additional
income taxes would flow to Washington. They would also spend more money, which
generates more economic activity and sends more revenue to federal coffers.
Bottom line, the $1 trillion price tag
could fall to $700 billion.
All
told, modeling by the economic forecasting group Moody's
Analytics for Warren's plans on child care, green manufacturing
and housing predicts
the ultimate cost to taxpayers would be nearly $1 trillion less.
There's
another wrinkle to consider for full context, which we did not include in our
tally of new spending: Warren's major boost in Social Security benefits.
Her proposal would increase every recipient’s monthly check by $200. That,
and other changes, would cost $3.4 trillion over 10 years. She would pay for
that through higher taxes on the well-to-do, raising about $4.7 trillion. In
the 10-year window, that would produce a surplus of $1.3 trillion.
That
surplus, though, wouldn’t be money in the bank. It would be there to pay future
benefits. While the surplus would be invested in Treasury bonds, Washington
would still need to pay it back with interest.
There’s
much debate over whether these estimates will hold up. The linchpin wealth tax might bring in far less
than Warren’s predicts, perhaps as little as $1.1 trillion. Wealthy people find
it pays to hide their wealth, and they would invest heavily in doing that.
Economist
Alan Auerbach at the University of California-Berkeley said he takes these
numbers with a grain of salt.
"My
sense is that the Warren campaign is trying somewhat harder than some others to
balance spending and revenue effects, but the numbers are still squishy
compared to what a formal analysis by the Joint Committee on Taxation and the
Congressional Budget Office would produce," Auerbach said.
The
other candidates vary how many details they provide on funding their bigger
plans. Joe Biden and Bernie Sanders, for example, put their numbers on their
websites, although Sanders has not committed to a specific way to pay for
Medicare for All.
For
other candidates, it takes more digging. Andrew Yang’s big plan for a universal
basic income –– $12,000 a year to every citizen –– would cost nearly $3
trillion a year, according to the estimate
of two economists, but that number isn’t on his FAQ webpage about the
program. Yang does offer funding mechanisms, most significantly, a
value-added tax.
Pete
Buttigieg wrote in an op-ed that his
health care plan would cost $1.5 trillion. His campaign told us that just about
all of that would come from repealing unnamed corporate tax cuts in the 2017
tax cut law.
At this
stage of an election, economist Steve Blitz puts little stock in the numbers.
For Blitz, Warren’s estimates are just a general indicator of policy.
"Warren
is taking a stand on how she thinks the world should be run," said Blitz,
chief chief economist for the economic consulting firm TS Lombard. "Pencil
to paper time comes when she is nominated and hit with it on the campaign
trail. Or if elected, trying to get it passed."
Correction: The
story, table and chart have been updated to reflect the addition of $100
billion in revenues due to changes in the stepped-up basis of
inherited assets, and a shift in programs covered by Warren's wealth tax.
For those who want more details,
drawn from her many posts, here’s a breakdown of what Warren says she will do:
No comments:
Post a Comment