By Brian Riedl
Thursday, December 15, 2022
The progressive movement, we are often told,
represents the future of American politics. It boasts millions of passionate
(mostly younger) activists and generally dominates universities, think tanks,
Hollywood, and the media. Progressive politicians such as Bernie Sanders,
Elizabeth Warren, and Alexandria Ocasio-Cortez are hailed as national
celebrities, fawned on in traditional media, and able to command a massive
social-media presence.
The progressive movement has energy and numbers. It has
bold ambitions and rhetoric. What it does not have is coherent policy
proposals. This is the inescapable conclusion after one carefully reviews
leading progressive bills and proposals to nationalize health care, tax the
rich, slash defense, and reduce net carbon emissions to zero. The issue is not
that their blueprints are misguided or would shift policy in the wrong
direction, but rather that they contain virtually no policy substance
whatsoever. They are vaporware: empty gimmicks and messaging bills that lack
the minimum specificity to be implemented even if enacted. Most proposals make
brash and expensive promises and then appoint a future commission or government
agency to figure out how to make it all work.
A movement filled with millions of committed activists
and led by ambitious academics, economists, scientists, think-tank fellows, and
politicians cannot simply have forgotten how to turn aspirations into
legislative proposals. Such attempts at policy entrepreneurship seem instead to
have collapsed under the weight of their internal contradictions, operational
unworkability, political infeasibility, and even disregard for basic
arithmetic. Let’s examine four prominent issues.
Health care. Medicare for all, which is perhaps
the central aspiration uniting America’s progressive movement, is less a policy
than a talking point: “If Europe and Canada can do it, why can’t we?” In
reality, no country provides the progressive vision of timely and nearly
unlimited access to a wide array of health procedures and technologies that are
completely free at the point of service. Every universal-health-care system
imposes some combination of care-rationing, technology limitations,
out-of-pocket expenses, and major coverage exclusions such as that of
prescription drugs.
Nor is the American medical infrastructure compatible
with single-payer health care. Nations such as the United Kingdom nationalized
health care when it was a small portion of their economy and then contained
costs by building a modest infrastructure over several decades. No country
first built a massive, sprawling health system that consumes nearly 20 percent
of the economy — with large and roomy hospitals, widely used and expensive
technologies, and an extensive drug — research sector — and then decided to
save money by drastically reducing payments below the cost of running this vast
system. In short, Medicare for all would be far more complicated than simply
pasting the Canadian system into legislation.
The two leading Medicare-for-all bills, authored by
Senator Bernie Sanders (I., Vt.) and Representative Pramila Jayapal (D.,
Wash.), must solve two fundamental challenges: achieving efficiency savings to
avoid expanding national health expenditures, and shifting health-care
financing to the federal government.
Reining in national health expenditures is especially
important because the two proposed bills also expand health-care access, at a
cost of roughly $7 trillion over the decade. So, even maintaining today’s level
of national health expenditures requires building a substantially cheaper and
more efficient system of paying doctors and hospitals. This endeavor (including
the pricing of more than 10,000 medical procedures) is enormously complicated
and controversial. Paying providers too much would surrender the efficiency
savings required to make health care affordable; paying them too little would
drive them out of business, causing shortages that would require rationing.
By what magic payment formula do the Sanders and Jayapal
bills achieve the trillions of dollars in promised health-care savings? They
provide no formula. They punt. The bills simply assign the Department of Health
and Human Services to figure out a new provider-payment system, with no
innovative guidance.
An analysis published in the journal Health
Affairs reveals the sheer emptiness of these bills. It explains how
the Jayapal bill promises countless new benefits yet fails to specify the
“policies, procedures, guidelines, and requirements related to eligibility,
enrollment, long-term care eligibility, provider participation standards and
qualifications, levels of funding, provider payment rates, planning for capital
expenditures and health professional education, and regional planning
mechanisms.” In other words, the bill distributes new benefits like candy, with
barely any consideration of how to operate or finance this generous new
health-care system.
The second challenge is replacing the $32 trillion
scheduled to be spent over the decade by state governments and by the private
sector on health premiums, co-pays, and out-of-pocket expenses with an equal federal
tax to fund health care. Again, the Sanders and Jayapal bills punt. They have
no finance sections. They would dump the $32 trillion cost into the national
debt, absurdly pushing annual budget deficits past $5 trillion within a decade.
Omitting the required new tax is essentially a white
flag. Last decade, Vermont enacted and then had to repeal a single-payer health
law when its elected officials failed to come up with a tax that was remotely
acceptable to voters even in the state that elected Bernie Sanders to the
Senate. The Committee for a Responsible Federal Budget has calculated that
financing a Sanders-style Medicare-for-all system nationally would require
choosing between options such as a new 32 percent payroll tax, a 25 percent
income surtax, and a 42 percent value-added tax. No wonder these bills are
silent on pay-fors: “Free” health care is quite expensive.
Without a new provider-payment system that brings the
promised massive efficiency savings and a new federal tax to replace state and
private — sector health spending, these leading Medicare-for-all bills are mere
wish lists for universal benefits — without any plausible system of delivering
or financing them.
Tax the rich. Progressives aggressively demand
dramatic tax increases on upper-income families and corporations as a matter of
economic justice and to finance their extravagant agenda. Limiting all new
taxes to the elite allows progressives to promise the middle class
European-size social — welfare benefits as a free lunch. This promised
tax-the-rich utopia, however, has no basis in mathematical reality, which is
why most progressive spenders never back up the rhetoric with specific, scored
tax-hike proposals.
None of the leading Democratic presidential candidates in
2020 presented tax plans that would have approached paying for their exorbitant
spending promises. President Biden has already enacted $4.8 trillion more
spending than new taxes. Even the $116 trillion cash shortfall faced by Social
Security and Medicare over the next three decades is often dismissed as
solvable by taxing the rich — again, in the absence of a specific proposal to
support it.
This is because the math is unforgiving. Let’s consider
every popular progressive tax proposal. On the individual side, let’s combine
eliminating the wage cap for Social Security taxes with eliminating all
itemized tax deductions and imposing a 50 percent income-tax bracket on
families earning more than $400,000. For investors and corporations, let’s
include taxing millionaire capital gains as ordinary income (and at death),
restoring the 35 percent corporate-tax rate, taxing financial transactions, and
imposing a new “bank tax.” Add Senator Sanders’s proposed 8 percent wealth tax
and 77 percent estate-tax rate. This overall agenda would layer tax upon tax
and hit upper-income families, investors, and corporations with the highest tax
rates in the developed world. Yet the total revenue — optimistically estimated
at $10.8 trillion over the decade, before any economic drag — would not even
close the $15.7 trillion projected ten-year deficit, much less provide the tens
of trillions of dollars necessary for progressive priorities such as Medicare
for all, job guarantees, a Green New Deal, and new social programs.
Progressives continue to sell American socialism as a
free lunch to be provided by the wealthy, but this tax-the-rich utopia will
remain an empty talking point because the numbers do not add up.
Defense. Progressive proposals to aggressively
shift defense spending toward other priorities are even less serious. Defense
spending adjusted for inflation has been falling since 2008, and it is now just
13 percent of total federal spending (compared with 19 percent during the 1990s).
So, rather than just reversing recent increases, the Congressional Budget
Office notes that trimming $1 trillion from the projected $9 trillion ten-year
defense spending would require fundamentally reorganizing, repurposing, and
reimagining America’s military apparatus and national-security strategy. This
includes abandoning full-ground-war counterattack capabilities, skipping a
generation of weapons technology, revisiting international-security
commitments, and even laying off 400,000 active-duty personnel.
For all the progressive calls to slash defense spending
by 10 percent, 20 percent, or more, no serious proposal exists. Congressional
Democrats formed a Defense Spending Reduction Caucus to draft the People over
Pentagon Act of 2022. This bill comprises just 333 words and offers no specific
defense savings. Instead, it mandates that the U.S. military immediately cut
$100 billion annually ($1 trillion over the next decade) and completely
overhaul national security. It instructs the defense secretary — I am not
kidding — to check the CBO website for ideas about how to do so. With the
possible exception of Senator Sanders’s 140-word proposal to slash defense
spending by 10 percent by cutting each relevant account equally, a lazier or
less serious bill is difficult to imagine. Progressives have not done their
homework on military reform.
Climate. While the climate crisis may be real, the
progressive movement to combat it is mostly hot air. Its lawmakers, leaders,
and activists can cite climate-doomsday scenarios chapter and verse. Yet when
pressed for specific climate solutions, including methods to manage economic
impacts and estimates of effects on global temperatures, the progressive
movement is rarely able to answer. The plan is to assign someone to come up
with a plan.
The infamous Green New Deal resolution merely set goals
of net-zero carbon emissions by 2050. The House’s 100% Clean Economy Act of
2019 and the Senate’s Clean Economy Act of 2020, with 170 and 33
co-sponsors, respectively, offer no blueprint either. They also simply direct
the federal government to design a plan to achieve net-zero emissions by 2050.
In 2019, Congress established the House Select Committee
on the Climate Crisis to “investigate, study, make findings, and develop
recommendations on policies, strategies, and innovations to solve the climate
crisis.” This 16 — member bipartisan congressional committee held dozens of
hearings over the next three and a half years. One would hope that such a
committee, with significant financial resources and the ability to summon the
nation’s top experts, would come up with specific, feasible legislation to
solve the climate crisis. Instead, the committee wrote a report recommending
that someone else draft legislation to set a nonbinding goal
to reduce emissions. This would presumably be followed by federal agencies’
finally looking for ideas of exactly how to reduce emissions
to meet that goal. To sum up, Congress created a special committee that wrote a
plan to assign someone to draft a legislative plan that would ask someone else
to come up with a plan. There is still no legislative blueprint to achieve
progressives’ long-standing climate goals.
Serious policy scholars understand that if there were
painless “easy answer” solutions, they would have been enacted by now. Most
policy options involve balancing costs and benefits and using our political
values to assess those trade-offs. The progressive movement largely rejects
this framing, selling astonishing fantasies as straightforward and obvious
solutions that have no drawbacks and are opposed only by a cabal of sinister
bad-faith actors. But Congress cannot enact empty slogans, and progressives’
utopian proposals cannot become legislation because they are contradictory,
unworkable, or mathematically impossible.
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