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Democrats weigh the cost of ambition

Democrats weigh the cost of ambition

SATURDAY, December 28, 2019
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In 2019, Democrats running for president announced a slate of multitrillion-dollar proposals aimed at transforming the country and combating the economic and social ills they blame for giving rise to President Donald Trump. 

But as the year comes to a close, the mounting price tag of those plans has become a point of contention between the liberal and moderate wings of the party. 

"No one inside the Beltway seems to ask how much the status quo costs," Sen. Bernie Sanders, I-Vt., wrote Thursday on Twitter, defending his proposals by citing estimates of deaths caused by air pollution and a lack of health care. "We have the resources - and a moral obligation - to pass Medicare for All and a Green New Deal."

Sanders' agenda would cost more than $50 trillion over 10 years, more than the plans of any other Democratic candidate. Like the others, he would pay for his plans by raising taxes on corporations and the wealthy. 

As Democrats seek to appeal to a broad swath of voters, candidatesare airing proposals that include government-supported health care and child care, free college, student loan forgiveness, transformative climate policies, massive pay raises for teachers, and a universal basic income, among others.

A Washington Post review of the major spending proposals of the leading Democratic presidential candidates found 10-year costs ranging from about $4 trillion to more than $50 trillion. The annual federal budget now is about $4.5 trillion.

Even the most sparse of the 2020 plans dwarfs what successful Democrats pushed before. As she seized the Democratic nomination in 2016, Hillary Clinton proposed a 10-year agenda estimated at $1.45 trillion, according to the Committee for a Responsible Federal Budget.

The rapidly rising price tags and expansive reach of the current plans has led to charges of socialism from Republicans. But in recent weeks, more-moderate Democrats have been the most vocal critics of their liberal colleagues' spending plans. 

"On issue after issue, we've got to break out of the Washington mind-set that measures the bigness of an idea by how many trillions of dollars it adds to the budget or the boldness of an idea by how many fellow Americans it can antagonize," South Bend, Indiana, Mayor Pete Buttigieg said during the Democratic presidential debate this month in Los Angeles.

Sen. Amy Klobuchar, D-Minn., who has said her priority as president would be a $1 trillion infrastructure program, has questioned the practicality of her competitors' more expensive proposals.

"Where I disagree is, I just don't think anyone has a monopoly on bold ideas," she said during the debate. "I think you can be progressive and practical at the same time."

The Post analysis focused only on the broad categories of health care, housing, the environment, criminal justice, education, child care and other anti-poverty initiatives. Using self-reported estimates from the campaigns of the candidates leading nationally and in early states - Sanders, Buttigieg, former vice president Joe Biden and Sen. Elizabeth Warren, D-Mass. - the review found a shared desire to strengthen the social safety net, enlarge the federal government and reduce inequality. But each arrived at different ways of doing so, with varying price tags.

Sanders, for example, would increase minimum salaries for teachers to $60,000 and provide free breakfast and lunch to every public school student in the country, as part of an agenda that tops $51 trillion over 10 years. Among a set of plans with a total 10-year cost exceeding $30 trillion, Warren proposes subsidizing child care for almost all Americans and reducing rental costs nationwide by 10 percent.

Biden's agenda, a more moderate set of proposals costing more than $4.1 trillion over 10 years, calls for tripling funding at low-income schools and making community college free. 

Buttigieg, who unveiled a $1.1 trillion 10-year economic plan in November, now has spelled out more than $5.5 trillion in federal initiatives. He has criticized Warren and Sanders for their free college programs that would provide a universal benefit, regardless of income. 

Trump has seized on the Democrats' spending proposals and led the GOP characterization of them as socialists. He has warned that the true outcome of Democrats' plans would be higher taxes.

"They say, 'We're going to give away your health care. We're going to do free education. We're going to cut student loan debt down to nothing,' " Trump said in September during a speech to the House Republican Conference in Baltimore. "Everything is given away."

Yet Trump signed a $1.4 trillion spending bill this month that will add more red ink to the record $23 trillion national debt. Republicans' signature legislative achievement under Trump, a massive 2017 tax cut whose benefits skewed toward corporations and the wealthy, has helped pushed the annual federal deficit past $1 trillion.

But many Republicans, following Trump's lead, have largely abandoned the concerns about debt and deficits they expressed during former president Barack Obama's tenure. 

Democrats have likewise felt free to sidestep discussions about the $23 trillion national debt during their primary contest, said Mark Zandi, chief economist at Moody's Analytics.

"The fetters around fiscal responsibility have been thrown off," said Zandi, who has analyzed the spending plans of several Democratic presidential candidates. "There's no real political constituency for fiscal discipline either on the Republican or Democratic side."

Indeed, several trailing Democratic candidates have, like Klobuchar and Biden, been critical of the spending surge - but have found voters largely shrugging off their concerns.

Other lower-polling candidates in the historically large primary also have built their candidacies around costly and ambitious initiatives.

Entrepreneur Andrew Yang has backed a universal basic income of $12,000 per year for every American adult, which he estimated would cost $2.4 trillion per year - or $24 trillion over 10 years. He has also proposed giving $100 in "Democracy Dollars" for every American voter to use to participate in the political system. 

Sen. Cory Booker, D-N.J., has proposed "baby bonds" for every newborn. Several candidates have expressed openness to the idea of providing reparations to the descendants of enslaved Americans.

For his part, Trump has boasted at rallies about spending trillions of dollars on the military and giving more than $28 billion in payouts to farmers affected by the trade war he sparked with China and other countries. Speaking to a conservative group in West Palm Beach, Florida, on Dec. 21, Trump praised his administration for securing more than $2.5 trillion in military spending, dismissing the idea that the increased funding had added to the growing budget deficit. 

"Let me tell you about budgets: I'm a big budget person, but when it comes to the military, there is no budget," he said.

In his 2016 campaign, Trump differed from other Republicans by brushing aside proposals to curb Social Security and Medicare spending, which members of his party had long argued were necessary to halt runaway deficits. He has pledged to get serious about fiscal discipline and reducing the deficit if reelected, but his campaign has not put forward a plan to cut spending. 

Democrats have said Trump's 2016 election and the policies he's pursued while in office require bold countermeasures that will level the playing field for middle-class Americans. They've sought to outdo one another by targeting primary voters concerned about issues including systemic racism, climate change and education.

An NBC News/Wall Street Journal poll released this month found that 56 percent of Democratic primary voters prefer candidates who propose "large scale policies that cost more" compared with 38 percent who like candidates pitching less-expensive policies that would bring less change but potentially be easier to pass into law.

With just a few weeks before primary voting begins, some of the more-moderate candidates are increasingly hopeful voters will be repelled by the rising price tags of the most ambitious proposals. Biden, who is leading the national race in most polls and leads with voters who prefer smaller-scale change, has repeatedly challenged his rivals to explain how they would pay for their spending programs.

Warren has been the most detailed in outlining the costs of her various plans and how she would pay for them. With a 2 percent "wealth tax" on fortunes exceeding $50 million and other tax hikes on the wealthy, Warren has said she would be able to fund a broad expansion of the federal government's social contract without raising taxes on middle-class Americans.

Warren advanced in the polls earlier this year as she released dozens of plans offering vast benefits to most Americans by redistributing wealth that has become increasingly concentrated among the rich. 

Calculators on her campaign website allow Americans to find out how much money they would save through her plan canceling student loan debt, and how much extra cash they would receive from her proposal to provide an extra $200 monthly for everyone receiving Social Security.

Her momentum appeared to stall after she was pressured to release her own plan for universal health care. Warren's $20.5 trillion proposal, her most expensive plan yet, would be funded through an array of taxes on the wealthy and corporations.

Both Sanders and Warren, who continue to face bipartisan questions about the costs and feasibility of their health-care plans, have said most Americans would pay less for health care under a government-run system that eliminates premiums, deductibles and the private insurance companies that collect them.

But over the course of the year, several Democratic candidates backed away from Medicare-for-all, citing its requisite tax increases and its upending of the private insurance industry.

"I believe this hits the middle class too hard," Sen. Kamala Harris, D-Calif., wrote in July about Sanders' proposal to pay for his Medicare-for-all plan with a 4 percent income tax on most families. Harris, who had proposed an ambitious agenda estimated at more than $12.3 trillion, dropped out of the primary this month. 

In addition to his Medicare-for-all proposal eliminating out-of-pocket health-care costs, Sanders has also pledged to have the government wipe out all $1.6 trillion in outstanding student loan debt. His proposal, announced in June, went even further than Warren's pledge to eliminate debt for 95 percent of the people who have student loans.

Sanders has pledged to pay for his agenda by reversing Trump's tax cuts and imposing a wealth tax and a series of tax hikes on the finance industry and more. He has acknowledged that his health-care plan would raise taxes on middle-class Americans, but he insists that would be offset by the trimmed costs.

Candidates have also touted 13-figure price tags as they've competed to show their visions for combating climate change.

Warren's $3 trillion plans include a tenfold increase in federal spending on clean-energy research and development. She also proposed a $10.7 trillion "green jobs plan" to invest in environmentally friendly industries. Buttigieg's $1.5 trillion plan creates a national extreme weather insurance program. Biden's $1.7 trillion plan aims to achieve net zero emissions of carbon pollution by 2050. 

Sanders has boasted that his plan, the most expensive at $16.3 trillion, would declare climate change a national emergency, eliminate fracking, and ban all imports and exports of fossil fuels.

Several candidates have pushed ahead with expensive plans by arguing that the cost of not acting far exceeds the price tag for their proposals.

"My opponents and critics say, 'Bernie, you're proposing to spend a lot of money on climate,' " Sanders said recently at a rally in Los Angeles. "And I say, 'What is the alternative?' "

Others have followed the example of Trump, who was able to win in 2016 by making broad promises that connected with voters while disregarding political structures of Washington policymaking, such as detailing how he would pay for it, said Michael Strain, an economist at the right-leaning American Enterprise Institute.

"These policies are so large and so different from what we've seen that it's hard to come up with a good estimate of how much they would cost and how disruptive they would be," Strain said of the Democratic proposals. "That creates political space for the candidates to argue the best-case scenario."