As the 2020 Democratic primary heats up, candidates are tossing out expensive new proposals like President Trump passes out paper towels in Puerto Rico. Sometimes they’ll even try to explain how they mean to cover the cost of these new entitlements, benefits, and programs.
Given the cavalier manner in which candidates discuss new spending, one would be forgiven for thinking that the federal government is currently in a stable budgetary position. Unfortunately, it most certainly is not.
The cumulative cost of proposals coming from the left this election is staggering. “Medicare for All, which more than half of Democratic primary candidates support, has been estimated by organizations on both the right and left to cost $32 trillion over the next decade (and the most recent version of this plan would be even more expensive).
That’s an increase in the size of the federal government of nearly 70 percent, when most annual increases are in single digits. The Green New Deal, which six Democratic senators running for president co-sponsored, was estimated to cost a mind-boggling $93 trillion over 10 years by the American Action Forum, an organization led by former Congressional Budget Office Director Douglas Holtz-Eakin. If implemented, it would triple the size of the federal budget.
Price tags that enormous simply can’t be paid-for without unconscionable amounts of additional debt. Taxing the usual targets for the left, corporations and the wealthy, can’t even begin to cover the cost of Medicare for All or the Green New Deal. A 70 percent tax rate on income above $10 million, such as that put forward by New York Rep. Alexandria Ocasio-Cortez, would only raise roughly $190 billion over ten years at best after accounting for dynamic effects on economic growth. That would pay for less than one half of one percent of Green New Deal spending. Doubling the corporate tax rate would likewise raise just a tiny fraction of the price tag of the left’s agenda.
Clearly, promises of “pay-fors” ring hollow for these major proposals, let alone the plethora of other, less ludicrously-expensive plans. Yet even in the alternate world where those proposals are fully-budget neutral, they’re still inappropriate given the context of our national debt. If we’re unable to reform our current entitlement programs, which are bursting at the seams with red ink, we shouldn’t be dreaming up new programs.
The size of the federal government’s debt is already striking enough. In February of this year, the national debt hit $22 trillion, a new record just under a year after the debt reached $21 trillion. We’re projected to see trillion-dollar deficits as soon as 2022. It’s true that the recent tax cut didn’t help the fiscal outlook, but its $1.43 trillion price tag is small potatoes compared to the shortfalls the federal government is facing elsewhere.
Specifically, entitlements are where “debt problems” turn into “debt disasters.” Social Security and Medicare are the main drivers of the debt and they’re only going to get more expensive — these two programs alone are projected to run an $82 trillion deficit over the next 30 years. The debt may look bad now, but it’s nothing compared to what it’s going to turn into very soon absent serious reform.
And that’s what makes this habit of discussing how to pay for new programs so irresponsible. Candidates that should be debating ways to tackle our mounting entitlement crisis are instead engaged in a bidding war to offer new entitlements and benefits, while at the same time misleading voters about the feasibility of paying for them with simple, politically popular revenue-raisers.
American taxpayers deserve candidates who will take their country’s fiscal problems seriously. Concocting laughably expensive entitlements when our current programs are going belly up won’t solve our problems, whether they’re “paid for” or not.
Andrew Wilford (@PolicyWilford) is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to fiscal policy analysis and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.