The “Progressive Agenda” is Fiscally Responsible

The “Progressive Agenda” is Fiscally Responsible

Written by Vik C.
Published 11 December 2018

Key Points:

  • We are currently planning to spend $45.2 trillion over the next decade on healthcare as a country.
  • A single payer Medicare for All system would cost $32.6 trillion over the next decade, saving us $13.2 trillion.
  • Freezing defense spending at 2017 levels would save us $780 billion over the next decade.
  • Reversing the Trump tax cuts would bring in an additional $1.9 trillion of revenue.
  • Reversing the Bush tax cuts would bring in an additional $3.3 trillion of revenue.
  • Closing three corporate tax loopholes (exclusion of rental income, capital gains, and deferral of controlled foreign corporations’ income) would bring in another $2.72 trillion of revenue.
  • If the entire “progressive agenda” is implemented, we would save $18.74 trillion over the next decade.
AP / Damian Dovarganes, via Prospect.org

It is a wonderful time to be an establishment journalist. Our government is currently in shambles, and the 24/7 news cycle is easily filled on a daily basis with twists and turns rocking the Trump presidency. We must all be thankful to our system of government which has withstood all of this upheaval. It is a testament to the intellect of our founding fathers that they were able to create a system of government which can weather such a storm and still stand strong.

However, certain members of the establishment media continue to behave as they have in the past: continuing to attack the ideals of liberalism and the progressive platform while doing nothing to hold to account the many other inane excesses that the American taxpayer has been forced to foot the bill for in the postwar era.

One of these instances was an interview that Jake Tapper of CNN did with Alexandria Ocasio-Cortez. I urge everyone who reads this to watch the full interview and form their own opinions on it because there are certainly intelligent and cogent points discussed in there. However, there is one part of the interview where Tapper attempts to ambush Ocasio-Cortez with a question about paying for her “progressive agenda”. In it he comes up with a number for $40 trillion over a decade for the entire plan heralded by Ocasio-Cortez and others of her mindset.

Tapper goes on to say:

Your platform has called for various new programs, including Medicare for all, housing as a federal right, a federal jobs guarantee, tuition-free public college, cancelling all student loan debt. According to nonpartisan and left-leaning studies friendly to your cause including the Center on Budget and Policy Priorities or the Tax Policy Center, the overall price tag is more than $40 trillion in the next decade. You recently said in an interview that increasing taxes on the very wealthy plus an increased corporate tax rate would make $2 trillion over the next ten years. Where is the other $38 trillion going to come from?

CNN anchor Jake Tapper presses Alexandria Ocasio-Cortez on the fiscal responsibility of the “progressive agenda” in September 2018.

I will be frank here about Ocasio-Cortez’s response; it was not the most specific nor was it something inspiring. However, considering that Tapper seemingly pulled this number out of nowhere in his rush to ambush and attempt to discredit her and the entire “progressive agenda”, I do not blame her for not having a fully formed and calculated response. Throw in the fact that she is one of the youngest candidates for the House of Representatives ever, that she does not have nearly as large a staff or office budget to hire economists and analysts to do their research and present the information to her as current politicians do, and that she originally came on the show to talk about Trump’s horrifying response to the death toll due to Hurricane Maria in Puerto Rico, it is completely understandable that she did not have a response fully formed or ready for such a question.

However, her response was still decent, and again I urge everyone to watch the full interview, but I will just briefly quote from near the end of her first response. Ocasio-Cortez believes that “these investments are better and good for our future.”

Such an exchange between the two goes on about three times in a row where Tapper continues to press Ocasio-Cortez on this so-called “left-leaning analysis” that produced this $40 trillion aggregate as Ocasio-Cortez continues to refuse to give him the satisfaction of successfully ambushing her. She provides very important and extremely valid context for why these investments in the American people are the right thing to do and would help the American people in the long run. Again, considering that Tapper fully intended to ambush her, I would say that she gave a decent answer. I think it would have been more powerful if she had said something to the effect of “I need to research this number further and will get back to you”, but she refused to be kowtowed by the establishment media, and she deserves all of the credit for that. We are so used to seeing Democrats falter and stumble and give in to the establishment media that this is a welcome surprise that Ocasio-Cortez remained with her head on straight and refused to do the same.

In the end, after this back and forth, Tapper ends with this before moving on to talk about the issues related to the sexual assault allegation laid against then-Supreme Court nominee Brett Kavanaugh:

I’m assuming I’m not going to get an answer for the other $38 trillion, but we will have you back and maybe we can go over that.

Ocasio-Cortez was not able to provide a funding mechanism for this price tag, but in this analysis, I intend to do so. Let us start with what is probably the only graphic of substance that CNN provided in this interview:

A graphic shown during Tapper’s interview with Ocasio-Cortez.

In this graphic, the numbers do add up to what Tapper had said; the total comes out to be $40.1 trillion. However, for the Medicare for All price tag, I am actually going to use the Koch-funded conservative Mercatus Center’s estimate of $32.6 trillion over the next decade.

In 2016, the Center for Medicare and Medicaid Services (CMS) administered by the Department of Health and Human Services calculated that the total national cost of healthcare was $3.3 trillion. In 2017, CMS calculated that the national aggregate expenditure on healthcare was $3.5 trillion. In the same study, CMS calculated that in 2026, the country will spend a total of $5.7 trillion on healthcare. Now, let’s take a minute to note that this is projecting the current system of an intermingled and very confusing system of public and private healthcare in this country and that this analysis was completed during the Trump administration, not the Obama administration.

Conservative and establishment media continually tells us that if we move towards single payer, we would spend more money, but CMS itself says that this is blatantly false. CMS expects that the national healthcare expenditure will rise 5.5% each year until 2026. This represents a total national healthcare expenditure of $45.2 trillion over the next decade! Let us take a moment to appreciate the sheer magnitude of this number and to compare it with the given numbers for single payer.

Tapper claims that the CBPP and TPC came up with an aggregate of $40.1 trillion over the next decade for the entire “progressive agenda” with $32 trillion for just healthcare. That means that if we switch from the current system of public and private insurance to a single payer Medicare for All system, as a country, we would save a total of $13.2 trillion over the next decade just on healthcare and a total of $5.1 trillion over the next decade by implementing the entire “progressive agenda”, including Medicare for All, over the next decade just from switching to single payer! Honestly, this should be the end of this discussion, period. Just by switching our healthcare system to that promulgated by progressives, we save over $5 trillion as compared to what Tapper claims would cost us for the entire “progressive agenda”.

Clearly, we have the money for the entire “progressive agenda” because we are either spending it right now or we are planning to spend it over the next decade, and in fact, by not implementing the “progressive agenda”, by Tapper’s estimates, we are wasting $5.1 trillion. That is $5.1 trillion over the next decade of American money which we are tantamount to setting on fire by not implementing this agenda.

If Tapper and the Mercatus Center are correct, we need to find on average $4.07 trillion per year to finance the “progressive agenda”. I’ve already proved above that we can save way more than spend, but now let’s look at actually financing it in other ways just for additional revenue as required.

I’ve already accounted how switching to Medicare for All would save us money, but to reiterate, the country already spent $3.5 trillion last year. By switching to Medicare for All, we would roughly only spend $3.26 trillion a year by the Koch-funded conservative Mercatus Center’s estimate. This means that we need to account for another $8.1 trillion over the next decade to meet a combination of Tapper’s and the Mercatus Center’s estimate.

The number one area of waste in the federal government is the Pentagon. By a Washington Post analysis, over a five year period, the Pentagon lost $125 billion and then buried the evidence so that Congress would not slash their funding. This is horrible misconduct. In addition, the Pentagon is the only area of government that is not audited. We must change this. Also, Congress throws money at the Pentagon and forces them to buy weapons that the Armed Forces themselves do not want or need every year to satisfy the defense contractors who lobby them. Obviously, this is another waste of taxpayer money. As such, to prevent more waste in the Pentagon, I propose that we should freeze defense spending for the next decade at 2017 levels: $583 billion per year. The CBO currently estimates that we will spend an additional $883 billion over the next decade on defense if we do not freeze it at 2017 levels. The Pentagon has so much money that they are literally wasting it, so they can definitely function on this.  After this, we need to find another $7.2 trillion.

If we reverse the 2017 Trump tax cuts that were a giveaway for the wealthiest and the corporations, we would save another $1.9 trillion over the next decade, according to the CBO. That leaves us with finding $5.3 trillion. If we reverse the Bush-era tax cuts, which were made permanent by the Obama administration and were another giveaway to the wealthiest and corporations, we would save another $3.3 trillion over the next decade, also ccording to the CBO. We need another $2 trillion to come to a balance on the entire “progressive agenda” now. If we close just three corporate tax loopholes: exclusion of rental income, capital gains, and deferral of controlled foreign corporations’ income, in ten years, we would receive another $2.72 trillion. This not only balances the budget on the entire “progressive agenda” over the next decade even if we ignore all the savings from switching to Medicare for All, but it also actually brings in an additional $720 billion over the next decade for the federal government to spend.

Yes, the “progressive agenda” can be paid for, and it would actually save money. If we only switched to Medicare for All and ignored the rest of the “progressive agenda”, we would save $13.2 trillion over the next decade, and if we implemented the entire “progressive agenda”, just from switching to Medicare for All, we would save $5.1 trillion over the next decade without any additional sources of revenue. And even if you wanted to keep the current expenditures as they are for whatever reason, there still is enough money that we can actually increase government revenue by $780 billion over the next decade just by freezing defense spending at 2017 levels, reversing the Trump and Bush tax cuts, and closing only three corporate tax loopholes.

Let’s revisit the aggregates. As of right now, we are planning to spend $45.2 trillion over the next decade on healthcare alone. We are planning to spend a total of $6.72 trillion over the next decade on defense. We are planning to actively forego $1.9 trillion over the next decade because of the Trump tax cuts. We are planning to actively forego $3.3 trillion over the next decade because of the Bush tax cuts. Just three of many loopholes in the corporate tax code (exclusion of rental income, capital gains, and deferral of controlled foreign corporations’ income) account to $2.72 trillion in lost income over the next decade. All of these costs tell us that we are currently planning to waste $58.84 trillion over the next decade.

In fact, if we implemented this agenda, we would have $18.74 trillion over the next decade to pay off much of our nearly $22 trillion national debt. That’s about as fiscally conservative as it gets.

Despite all of the rhetoric against it, the United States could very feasibly pay for the “progressive agenda.” Contrary to what numerous mainstream news outlets imply, there are robust data to support conclusion. So for anyone who says that these programs are “pie in the sky”: if that’s the case, then we can have our pie and eat it, too.

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