April 1, 2020

Windmill Tilting

By Stephen Tuttle | Jan. 19, 2019

Modern Democrats have always been a fractious bunch more likely to coalesce against something than for anything. But we now have a small new group in the U.S. House of Representatives with big plans.
Disciples of Bernie Sanders and advocates of what some call democratic socialism, these Dems like free tuition at public universities and colleges and cradle-to-grave healthcare sometimes called universal Medicare. It's easy enough to nod our heads in agreement with the ideas; free always sounds good.
Until we see how much free actually costs.
Free tuition? Somewhere around $75 billion annually. Add in room and board, as some would, and the cost increases another 60 percent. And the costs escalate as tuition increases. 
Healthcare for everybody is much pricier, somewhere between $14 and $17 trillion over the next decade. Nobody knows for sure since nobody has a good idea of how such a thing would work.
Together, the two items would increase the national budget by about 30 percent. That's a budget that was already $1.5 trillion in the red last year and is headed for worse this year. Our national debt is now a nearly incomprehensible $22 trillion. (For those of you who like large numbers, that's $22,000,000,000,000.)
We're told we could pay for the healthcare with a transaction tax on activity on Wall Street, and for the tuition with a tax on the top income earners. The transaction tax sounds like something that would be passed along to consumers, and the tax on high earners sounds like something they'd find a way to avoid.
At the center of these discussion is newly elected Democrat Alexandria Ocasio-Cortez, 29, of New York. The youngest woman ever elected to Congress and a media magnet, she recently mentioned the idea of a marginal tax of up to 70 percent for those earning more than $10 million annually. The tax would only apply to earnings above that $10 million threshold, and only about 16,000 Americans are in that income bracket.
(Here's an interesting aside: The youngest person ever elected to Congress was 22- year-old William Charles Cole Claiborne of Tennessee. He won the right to fill the seat vacated by Andrew Jackson and was re-elected at 24. Both times he was
unconstitutionally too young — the constitutional minimum age is 25 — but the House elected to seat him anyway.)
As Ocasio-Cortez and Nobel Prize-winning economist Paul Krugman have pointed out, we used to have just such a high marginal tax rate on high earners in the 1960s, with no apparent harm to what was then a booming economy. But those were much different times, especially politically.
These are interesting ideas and conversations, but they are essentially meaningless. The one reality in Congressional politics is simple math; you need 219 votes in the House and 60 votes in the Senate, or your grand plans are already dead. There might be enough votes in the new House for some kind of tax increase for the super-rich, but there are nowhere near 60 votes in the Senate. The debate, such as it is, is just for fun.
The Democrats would be wiser to take a page from what used to be conservatism and tackle the already out-of-control budget deficits, instead of adding to them. It's not as if there's no room to work.
They could, finally, pass legislation that actually adds some significant teeth to laws against Medicare fraud and then provide the personnel to enforce them. That we continue to read about tens of billions in annual fraud is absurd. They could mandate negotiated drug prices for those covered by Medicare, saving billions more.
Instead of free tuition, they could start a bit more modestly and fix the out-of-whack student debt horrors. And they could find out why public colleges and universities keep raising their tuitions well beyond inflation rates.
Instead of the inevitable investigations of the president, Democrats would be better served investigating and reforming a defense procurement system so wildly out of control that the Pentagon itself finally admitted they have no real idea how much anything costs or where all that money goes.
The F-35 fighter, 16 years in development and still not ready, is billions over budget. Our new littoral ships, submarines, tanks ... all late and way over budget. We can't even agree on costs. The Pentagon says a new nuclear bomb will cost $7.5 billion; the General Accounting Office (GAO), using the same numbers, says it's $10 billion.
The Pentagon will actually be audited for the first time in 70 years. Good grief.
There is a window of opportunity here for some positive baby steps on issues that might even generate bipartisan support. “We actually did something” would be a good 2020 campaign slogan.
Alas, Democrats have never seen a windmill at which they wouldn't tilt. And they now see windmills everywhere.


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