Laura Meckler of the Wall Street Journal reports that Sen. Bernie Sanders’ proposals to date would increase federal spending $18 trillion over ten years, “an increase of about one third in total federal outlays.”
There are a number of reasons for skepticism concerning these estimates, but missing from the usual list is the fact that regulation is a substitute for government expenditure.
According to Meckler, the $18 trillion estimate covers the following proposals and is believed more likely to under- than overestimate actual outlays:
- Single payer health care ($15 trillion, based on analysis of HR 676 by Gerald Freidman, University of Massachusetts at Amherst)
- Increased Social Security benefits by on average $65 per month ($1.2 trillion)
- Increased expenditures to repair or rebuilt roads, bridges and airports ($1.0 trillion)
- Tuition-free public colleges ($750 billion)
- Paid family and medical leave ($319 billion)
- Prevent companies from cutting defined-benefit pensions ($29 billion)
- One million jobs for disadvantaged youth ($5.5 billion) (Employ Young Americans Now Act, HR 2714, S 1506, 114th Congress)
The italicized proposals appear to be primarily regulatory — that is, paid for by regulatory mandates on employers, not funded by federal expenditures. Thus, readers may reasonably misconstrue Meckler’s estimates as increases in government expenditures rather than regulatory mandates. (Meckler discusses budget outlays, not social opportunity cost.)
A review of Sanders campaign website includes several proposals not mentioned by Meckler, and many of them are primarily regulatory (in italics):
- Increase the federal minimum wage to $15.00 per hour by 2020 (#2, #5)
- Enactment of the Paycheck Fairness Act (S. 84, 113th Congress) (#6, #1)
- Universal childcare and prekindergarten (#11, #4)
- Enactment of the Employee Free Choice Act (#12) (HR 1409, S. 560, 111th Congress) Congress)
- Expanded funding for Planned Parenthood (#2)
- Expanded funding for the Women, Infants and Children (WIC) program (#8)
- Enactment of comprehensive immigration reform (#1)
- Enactment of the DREAM Act (#3)
- Expansion of the Deferred Action for Childhood Arrivals (DACA) program (#4)
- Substantially increase funding for the Legal Services Corporation (#5)
- “Substantially increase prevailing wages that employers are required to pay temporary guest workers” (#6)
How does Sanders propose to fund these new programs? With respect to her list, Meckler writes:
To pay for it, Mr. Sanders, a Vermont independent running for the Democratic nomination, has so far detailed tax increases that could bring in as much as $6.5 trillion over 10 years, according to his staff.
A campaign aide said additional tax proposals would be offered to offset the cost of some, and possibly all, of his health program. A Democratic proposal for such a “single-payer” health plan, now in Congress, would be funded in part through a new payroll tax on employers and workers, with the trade-off being that employers would no longer have to pay for or arrange their workers’ insurance.
Unlike cost estimates, projected revenue increases are virtually certain to overestimate actual tax collections because taxpayers’ adaptive responses are not taken into account. And Meckler’s estimates rely on information obtained informally from Sanders’ staff, not from what the Sanders campaign has made public. Reviewing the Sanders campaign website, only three taxes are mentioned, and no revenue estimates are provided for any of them:
- Enact a progressive estate tax [sic, actually an inheritance tax] on those who inherit more than $3.5 million (#1)
- “[S]top corporations from shifting their profits and jobs overseas to avoid paying U.S. income taxes” (#1)
- Lift the $250,000 cap on Social Security taxes (#8)
Meckler correctly surmises that Congress would be extremely unlikely to go along:
Enacting his program would be difficult, if not impossible, given that Republican control of the House appears secure for the foreseeable future. Some of his program would be too liberal for even some centrist Democrats. Still, his agenda articulates the goals of many liberals and is exerting a leftward pressure on the party’s 2016 field.
The Sanders program amounts to increasing total federal spending by about one-third—to a projected $68 trillion or so over 10 years.
But this assumes that Sanders would need congressional approval. For many of these proposals, he might choose to accomplish them by regulation instead.