Warren vows no middle class tax hike for $20T health plan
WASHINGTON (AP) — Elizabeth Warren on Friday proposed $20 trillion in federal spending over the next decade to provide health care to every American without raising taxes on the middle class, a politically risky effort that pits the goal of universal coverage against skepticism of government-run health care.
The details of Warren’s “Medicare for All” plan aim to quell criticism that the Massachusetts Democrat and presidential candidate has been vague about how she would pay for her sweeping proposal. Her refusal to say until now whether she would impose new taxes on the middle class, as fellow progressive White House hopeful Bernie Sanders has said he would, had become untenable and made her a target in recent presidential debates.
However, her detailed proposal was quickly attacked by her moderate rivals, including former Vice President Joe Biden, whose campaign said it amounts to “mathematical gymnastics.” Some independent experts also questioned whether her numbers were realistic.
In a 20-page online post, Warren said a cornerstone of her plan would require employers to transfer to the government almost all the $8.8 trillion she estimates they would otherwise spend on private insurance for employees.
“We can generate almost half of what we need to cover Medicare for All just by asking employers to pay slightly less than what they are projected to pay today, and through existing taxes,” she wrote.
Campaigning in Iowa, Warren said Friday her plan was drafted with help from top health care experts and economists. “If Joe Biden doesn’t like that ... I’m just not sure where he’s going,” she said.
Companies with fewer than 50 employees that don’t already sponsor coverage would be exempt from the proposal. And in a nod to unions whose support will be key in the Democratic primary, Warren said that employers already offering health benefits under collective bargaining agreements will be allowed to reduce how much they send to federal coffers — provided they pass those savings on to employees.
Democrats have spent decades debating the proper role of government in health care, and the complicated politics surrounding the issue quickly resurfaced after Warren released her proposal. Biden, who favors building on the Affordable Care Act, slammed Warren’s plan as eliminating private insurance coverage and said it still amounts to a tax increase on workers.
President Donald Trump has branded Medicare for All as socialism.
For all the attention being paid to Warren’s proposal, Sanders is the chief architect of Medicare for All. He has previously released several options to pay for it, including a 4% income tax “premium” that kicks in after the first $29,000 for a family of four — very much affecting the middle class.
Politics aside , some independent experts raised doubts about the Warren campaign’s estimates.
“They are making more aggressive assumptions about the same things we already made aggressive assumptions about,” said John Holahan, an economist at the Urban Institute who co-authored a recent cost analysis that the Warren campaign is using as a starting point for its estimates.
And then there’s the task of passing such legislation through Congress. A Republican-controlled Senate is unlikely to approve anything approaching Medicare for All. And if Democrats took the Senate majority, the party almost surely won’t have enough votes to break a filibuster.
“There’s the practical application of getting 60 people in the Senate who are going to vote for this,” said former Iowa Gov. Tom Vilsack, who has consulted Warren on rural policy.
A critical question for Warren is whether her $20 trillion cost estimate is accurate. The Urban Institute think tank recently pegged the cost closer to $34 trillion over 10 years.
If Warren is underestimating the cost by that much, her predictions about needed tax revenue would come up well short.
“This seems like an exercise to low-ball the revenues needed to actually make this enormous transition,” said Emory University economist Ken Thorpe, who has done his own estimates of Medicare for All.
How Warren’s proposed employer contribution would work in the real world will get close scrutiny. It could create winners and losers among companies depending on their health care costs, which can reflect such factors as the age of the workforce and the generosity of benefits.
“It’s going to lock in inequities based on companies that have an older workforce with better benefits,” Thorpe said.
If the transfers from employers to the government don’t raise enough money, Warren said she would make up the difference by imposing a supplemental contribution requirement for big companies “with extremely high executive compensation and stock buyback rates.”
All told, Warren estimates she could generate $20.5 trillion in revenue through a combination of, among other things, higher levies on capital gains and other investments and new taxes on the wealthiest 1% of Americans.
Some of her other revenue estimates also could hit political snags. Many lawmakers may be reluctant to side with Warren’s call to raise $800 billion over 10 years by eliminating a Pentagon contingency fund used for anti-terrorism operations. Another $400 billion represents dividends from an immigration overhaul, a legislative feat that has eluded the past three presidents.
And a whopping $2.3 trillion would come from stronger enforcement of existing tax laws — money that would have to be identified and collected before it could be used.
Over the weekend, Warren and more than a dozen other candidates will be in Iowa, which holds the nation’s leadoff presidential caucuses in three months. Health care remains a dominant issue as the first votes of the Democratic contest near.
Associated Press Writer Thomas Beaumont in Des Moines, Iowa, contributed to this report.