I confess, I was iffy about her new plan when I thought it involved a government takeover of health care and massive new federal spending.
But a government takeover of health care, massive new federal spending, and a comprehensive amnesty for America’s millions of illegal immigrants?
Where do I sign up?
This very expensive proposal comes with not one but two unicorns, you’ll be pleased to know. Our famously inefficient government will somehow reduce the total amount Americans spend on health insurance by creating its own industry monopoly, an economic arrangement also not typically associated with efficiency. And it’s going to do this without demanding one thin dime in new taxes from the middle class, a possibility that even Bernie Sanders has deemed too preposterous to include in his own Medicare for All plan.
Even the Times sounds skeptical:
Ms. Warren would use a mix of sources to pay for the $20.5 trillion in new spending over a decade, including by requiring employers to pay trillions of dollars to the government, replacing much of what they currently spend to provide health coverage to workers. She would create a tax on financial transactions like stock trades, change how investment gains are taxed for the top 1 percent of households and ramp up her signature wealth tax proposal to be steeper on billionaires. She also wants to cut $800 billion in military spending…
Her financing plan is based on cost estimates that are on the low side, relative to those from other serious economists who have assessed the program. Her estimate of $20.5 trillion over 10 years is based on a recent cost model by the Urban Institute, but with several different assumptions that lower the cost from Urban’s estimate of $34 trillion over the same period.
In other words, everything businesses and workers pay towards private health care currently would be redirected towards funding M4A, along with some gimmicky taxes on the business class. But even on day one, the sustainability of this mammoth program depends on a scenario that seems too optimistic even to other wonks, amounting to a potential shortfall to the tune of … $14 trillion. Not only that, but Warren’s already begun to increase the estimates of taxes she’ll need to pay for everything on her agenda:
Ms. Warren would raise $3 trillion in total from two proposals to tax the richest Americans. She has previously said that her wealth tax proposal, another signature of her campaign, would impose a 3 percent annual tax on net worth over $1 billion; she would now raise that to 6 percent. She would also change how investment gains are taxed for the top 1 percent of households.
We’re a year out from the election and she’s already raising taxes on the rich relative to levels *she herself* previously set in order to make the math work. Don’t worry, though, I’m sure the middle class will remain sacrosanct.
You can read her plan in her own words here. That’s where the amnesty angle comes in:
To get a sense of how enormously difficult it is to raise the money to pay for Medicare for All, look at this section of the Warren proposal where she says that comprehensive immigration reform, a Herculean legislative feat that Bush and Obama failed at, will help pay for M4A. pic.twitter.com/sLy2KirAu0
— Ryan Lizza (@RyanLizza) November 1, 2019
How many killer votes does this person expect a Democratic majority in the Senate to take in her first year? To begin with, she’d need to find 50 Democrats willing to nuke the filibuster, and that 50 won’t include Kyrsten Sinema or, probably, Joe Manchin. Dems will need a net gain of five seats this fall just to make ending the filibuster possible (and remember that Doug Jones’s Alabama seat is all but certain to turn red). Then, after they nuke it, they’ll have to somehow muster the nerve to pass a massive amnesty that’s eluded Washington for decades. “No problem,” Democrats will say, “polls show the public likes amnesty.” We’ll see how much they like it in battleground states with a relentless GOP messaging effort against the program at work. And then, once amnesty is on the books, Democrats will need to catch their breaths and take the really tough vote on Medicare for All.
How much political capital will they have left for Warren’s many other ambitious giveaways, like college loan forgiveness, after that? Stay tuned.
I highly recommend reading Philip Klein’s short but pointed rebuttal of some of the Warren plan’s more magical claims. Why is there a $14 trillion gap between her cost estimate and the estimate others have arrived at? Because Warren believes trillions in savings can be found by squeezing doctors on their pay and eliminating “waste, fraud, and abuse,” an old Washington phrase for kicking the can on a program’s cost, with no adverse effects. She also believes that trillions in new health-care spending can somehow by avoided despite the fact that many millions more Americans will now receive full health-care coverage from the federal government. Let me remind you that this is coming from the so-called wonk in the Democrat field, the serious person who’s supposedly thought things through. In reality, Klein says, Warren might as well have said that Mexico will pay for M4A.
Democrats and Republicans have each become unserious in an age of American decline, although in starkly different ways. Today we’ve been reminded of the Democratic version of unseriousness. As it is, I’m looking forward to watching her and Bernie argue at the next debate over whether Medicare for All can be financed without taxing the middle class. Bernie, to his credit, admits that it can’t, mainly because he’s using a more realistic cost estimate. How aggressive will he be in challenging her on that?