Bernie Sanders, the self-described socialist from Vermont, has proposals for expanded health care and “college for all” and is enjoying a honeymoon experience with new and liberal voters but his lack of a workable plan to make his ideas a reality will catch up to him in the end.
Mr. Sanders proposes that the federal government pay health care costs instead of private insurers, that Social Security be expanded, that student loan interest rates be reduced and college education made free.
His ideas require increased federal taxes for middle income and high income earners. The Economist estimates that federal income taxes would rise to 67 percent on households earning $10 million a year or close to the 70 percent top rate enjoyed in the robust economy of the 1970s.
Income taxes and Social Security taxes on households earning $250,000 a year would have to rise sharply, as well. In 2014, Vermont, his home state, rejected a single-payer plan for health care because the taxes would be too much.
The Committee for a Responsible Federal Budget estimated that Mr. Sanders’ plans overestimated tax revenue which will create a $3 trillion shortfall in a decade. Dr. Kenneth Thorpe, chair of the Department of Health Policy and Management of Emory University, estimated that all the “Bern” plans were underfunded by nearly $1.1 trillion a year. If correct, then even higher taxes would be needed to fund the proposed plans.
The “College for All” proposal would eliminate student debt and make public college education free. However, Mr. Sanders does not address private college tuition. At least 73 percent of college students attend public institutions of higher learning.
If public colleges become free, that percentage will rise and, if so, won’t the plan cost taxpayers even more? The federal government already pays almost $70 billion a year in grants to subsidize tuition to make public and private colleges more affordable.
According to Mr. Sanders, “The federal government will provide $47 billion a year to the states to eliminate undergraduate tuition and fees at public colleges and universities,” representing 67 percent of the cost at public colleges and universities, which requires states to pony up “the remaining 33 percent of the cost.” How will he force the states to contribute $23 billion a year more for higher education?
Furthermore, in the last decade, expenditures by the federal government for education grew more than 160 percent from $35 billion to over $95 billion, with the majority of the increase in federal financial aid for college students — $48.0 billion/year, plus $10 billion/year more in tax breaks — according to a researcher and the Office of Management and Budget. (“Losing Out on Higher Education Costs,” George Krumbhaar; Budget of U.S. Government, FY2007).
Mr. Sanders claims that his education proposals would be “fully paid for by imposing a Robin Hood Tax on Wall Street … a Wall Street speculation fee on investment houses, hedge funds and other speculators of 0.5 percent on stock trades (50 cents for every $100 worth of stock) … this provision could raise hundreds of billions a year … to make tuition free at public colleges and universities [and] create millions of jobs and rebuild the middle class of this country.” These are laudable goals but they can only be accomplished with a workable plan.
This “Robbin’ Hood” tax is a financial transaction tax (FTT) and it can raise revenue and discourage short-term stock speculation and risky derivatives dealing. Nations with leading financial markets like England and Singapore impose a FTT.
The Joint Committee on Taxation estimated a FTT would raise more than $35 billion a year. That is a far cry from “hundreds of billions a year,” which means the total revenue from the FTT tax would have to be devoted solely to students attending public colleges, and more financial support from Washington and the states would be required.
Mr. Sanders proposes no reasonable mechanism for the federal government to reduce the interest rate of student loans. Nancy Pelosi once proposed cutting student loan interest rates in half but it never went anywhere in Congress due to the cost of the measure.
Mr. Sanders is very skilled at pointing out inequities and then challenging people to get involved and become part of the solution. That is a very good thing. His proposed FTT is a very good idea.
However, the people need ideas with plans that have a reasonable chance of being accomplished. We need steady and pragmatic leadership to implement sensible plans that contain good ideas.
Hillary Clinton is a proven leader and was a practical lawmaker in the Senate. Hillary Clinton is usually criticized for being too “hard-edged” and too much of a politician. Well, this nation needs a political leader who is tough and who understands politics or nothing good will be accomplished over the next four years.
Ms. Clinton was honest and straight when she said, “I am not making promises I cannot keep.” She has the experience of negotiating with the leaders of the world as Secretary of State and is the only candidate who promised to maintain Affordable Care for working Americans.
She has sensible ideas about immigration and economic policy. Will America realize that a vote for Mr. Sanders most likely will be the equivalent of a vote for the GOP candidate or will we just realize that we cannot afford a four-year “Weekend at Bernie’s?”