Elizabeth Warren has promised a plan to pay for her universal healthcare plan she has touted.
The CBO estimates Warren needs to find $32 trillion over the first 10 years and would need to increase federal taxes by 70%.
Warren took heat in the last Democratic party nomination debate for dodging questions on how she would pay for universal healthcare and if it would include a tax raise for the middle class.
Forbes reports Democratic presidential hopeful Elizabeth Warren says she’ll disclose her plan to pay for universal, public health care within the “next few weeks.” But finding the $32 trillion she’ll need for the first 10 years alone is neither easy nor obvious. And the money might well have to come from outside of the current tax system.
Warren has two problems: The sheer cost of the Medicare for All plan she has endorsed and the financing constraints she has created for herself.
Let’s start with the cost: My colleagues at The Urban Institute estimate that a universal government health plan of the sort proposed by Sen. Bernie Sanders (I-VT) and endorsed by Warren would increase federal health care spending by a net of $32 trillion over a decade. Such a plan would replace all private insurance with single-payer government insurance with no premiums and very limited co-payments.
A 70 percent tax hike
For context, the Congressional Budget Office estimates that under current law the federal government will raise about $45 trillion in revenue over the next decade. So Warren (and, for that matter, Sanders) would have to increase federal taxes by 70 percent to pay for health reform. Or, to put it another way, she’ll have to raise taxes by about 10 percent of the nation’s total economic output. She also could find the money by cutting spending, though according to CBO estimates, she could eliminate the entire discretionary spending budget and fund only half the cost of Medicare for All.
Keep in mind the $32 trillion represents a net increase in government costs. At the same time, the cost of privately-paid health care (through insurance or out-of-pocket spending) would shrink dramatically. Thus, much of the tax increase that Warren needs would be offset by a decline in personal health care spending. And some of the reduction in health spending by employers would result in higher wages or larger business profits that would be subject to tax. Still, most of the $32 trillion will have to come from unpopular tax hikes.
And she needs to find the money under several self-imposed constraints. To start, she has promised that any tax hikes on low- and middle-income households will total less than their current out-of-pocket health care costs. “I will not sign a bill into law that does not lower costs for middle-class families,” she said at a recent debate.
This article was written by the staff of TheConservativeOpinion.com