The media has been putting a lot of attention on many new pieces of proposed legislation for the 116thU.S. Congress term. The new progressive/socialist party, also known as the Democratic Party, has brought a lot of attention to bills they intend to take up over the course of this term. Rest assured that because the Republicans control the Senate and the Presidency, the chances of any of these bills passing are about as likely as Alexandria Ocasio-Cortez being completely honest about her policies and intentions (Hint: She hasn’t yet).
But what can these new proposed bills tell us? It shows us the direction that the new progressive party wants to take our country; and as well all know, they will likely have their chance at some point in time over the next decade.
So, based upon the 2016 DNC party platform, as well as the new push by progressive legislators, we can find at least 3 major policy changes that could be analyzed for the coming years. While the merits of each plan will be debated ad nauseam over the coming months and years, one thing that is of little debate is that these plans will cost money… a LOT of money.
The 3 plans we will look at here are:
· Medicare-For-All, which is touted by many prominent Democrats, including 2020 Presidential Candidate, Kamala Harris
· The Green New Deal, a big proposal from newly minted Socialist Representative Alexandria Ocasio-Cortez
· Free-College-For-All, made popular in 2016 by Bernie Sanders, another Socialist
(Side note: Notice how so many of the new proposals from the Democrats are giving you “free stuff”?)
The basic tenants of this plan are that the current Medicare system, in place for those over 65 years of age, will be expanded to include every person in America. Kamala Harris doubled down on this plan this past week when she said she would completely do away with all private insurance 100% and only allow the government to run the healthcare system. Gosh, there are so many things that could be said about this, but let’s stick to the purpose of the article.
The most conservative estimate for the cost of a Medicare-For-All plan is $32.6 trillion over 10 years. These estimates assume that all physicians will take more than a 40% hit on all reimbursements for their services and drug costs will be reduced across the board to the current Medicare rates. Both of these assumptions are 110% factually wrong. Many physicians actually don’t even take Medicare anymore because the reimbursement they receive from the government doesn’t even pay the overhead costs of running the clinic and seeing the patient, much less paying staff and everything else involved. Likewise, 80% of all hospitals in the US currently lose money when they treat a Medicare patient. It is simply unsustainable at these levels.
Let’s say that under a new Medicare-For-All system that today’s current payment levels stay the same for healthcare providers, which is a mix of Medicare/Medicaid and private insurance reimbursements; the cost for that system would be $38 trillion over 10 years. And remember, after 10 years, the costs rise for both of these options, so even more money would be needed to fund it for the decades that follow.
Green New Deal
Attempting to ride the coat tails of Roosevelt’s The New Deal in the 1930’s which implemented the flawless Social Security system (*sarcasm*), the Green New Deal has roots in the late 2000’s, but has become more mainstream since 2016. Bernie Sanders and Jill Stein had the Green New Deal as part of their presidential platform, and the outspoken Socialist from New York, Alexandria Ocasio-Cortez has taken it upon herself to attempt to pass it through Congress. While there are many different forms of this bill out there, most propose a turn to 100% clean and renewable energy in a very short timeframe and calls for zero emissions by 2050 – Yep, that means everyone would only be able to drive Tesla’s, no more gas-guzzling vehicles.
Implementation costs of this policy is difficult to calculate due to the necessary regulatory changes that would need to be made with unknown costs, but it has been estimated that the costs would likely be above $1 trillion and potentially significantly more.
Bernie Sanders campaigned on the promise of free college tuition for anyone who wants it in 2016. Hillary Clinton embraced the idea for her unsuccessful presidential bid as well. The premise is fairly straightforward – anyone who wants to go to college can go to a state University or Community College tuition free. Now, there are lots of questions around how this would work with people who go to college and drop out, not finishing their degree for one reason or another, but once again, not what we are here for.
In 2016, Sanders’ campaign estimated the program to cost about $75 billion a year ($750 billion for $10 years – which will inevitably cost more each year the program is in place), to be shared between the federal government and the states. A similar proposal that would be much cheaper overall is tuition free Community College with cost estimates of $60 billion over 10 years, an average of $6 billion per year.
Let’s recap these 3 policies that the progressive Socialists are promoting, over a 10 year period:
Medicare-For-All $32.6 trillion
Green New Deal $1 trillion
Free-College-For-All $750 billion
Total $34.35 trillion(over 10 years)
The current United States annual budget according to the Congressional Budget Office is $4.4 trillion dollars (with revenues for 2019 estimated to be $3.5 trillion – Yes… the math doesn’t add up, hence the National Debt). These 3 policies alone would mean that the United States would have to double its revenues every year for these 3 policies to be paid for without addition to the national debt.
How To Pay For It
Ocasio-Cortez wants to tax the top 1% with a marginal tax of upwards of 70% to pay for her Green New Deal, which according to the Washington Post, would bring in about $720 billion per decade. The simple math says her 70% rate falls short of paying for the $1 trillion proposal.
Sanders proposed a “Speculation Tax” on those trading on Wall Street, which he says would pay for the Free-College-For-All bill. He claims the Wall Street tax would generate $47 billion a year, which obviously falls below the $75 billion price tag per year. Sanders stated that the individual states would be left on the hook for the rest of the balance, but neglected to say how each state would raise those funds.
The Medicare-For-All bill has been proposed by Sanders in the Senate and his proposal included a plan to raise funds to pay for it. Those proposals include:
· Elimination of special tax breaks: $4.2 trillion over 10 years. The main target: company-provided health benefits for employees. They would no longer be needed.
· Business payroll tax: $3.9 trillion over 10 years. Companies would pay a 7.5% income-based fee, but Sanders asserts it would cost them less overall compared to the current system.
· Household premiums: $3.4 trillion over 10 years. Families would pay a 4% income-based fee, which he claims is considerably less than what they pay now.
· Higher taxes on the rich: $1.8 trillion over 10 years. Raise marginal rates to as high as 52% on the richest Americans. Also, limit deductions and treat taxes on dividends and capital gains equally.
· A new net wealth tax: $1.3 trillion over 10 years. This new tax would apply to the wealthiest 0.1%, or 160,000 households. A 1% annual tax would be applied to net worth exceeding $21 million.
· One-time tax on offshore profits: $767 billion over 10 years. Sanders wants to tax profits of Americans companies that are earned and held in other countries. These profits are not taxed until they are returned home under current U.S. law.
· Increased estate taxes: $249 billion over 10 years.
· Fee on large Wall Street banks: $117 billion over 10 years. The six largest U.S. financial institutions would get the bill.
Total Revenue: $15.733 Trillion over 10 years… which falls DRASTICALLYshort of the $32.6 trillion conservative estimates.
Also, you may notice that some of Sanders proposals to pay for Medicare-For-All were similar to Ocasio-Cortez’s proposal to pay for the Green New Deal, specifically the marginal tax rate on the top 1%.
The Socialists are running out of other people’s money to spend and the only way to give you all your free stuff is to charge you for it. Think you are going to go to college for free and not pay anything for your health insurance, while driving your cheap zero-emissions car? Think again.
Nothing is ever free. Someone paid for it and chances are, that someone is/was you.