Happily for Biden, the dramatic events of the past three months have upended the political landscape. With the primary debates now a distant memory, he has a second chance to lay out a new-and-improved policy agenda that is as radical as it is centrist, one that can serve as a foundation not only for winning the election but also governing the country thereafter.
So what would a radically centrist Democratic platform look like? Here are four ideas that are anything but mushy middle:
Obamacare for All
As citizens of Germany, Switzerland and the Netherlands know, it is possible to ensure that everyone has high-quality, affordable medical care through a regulated system of private insurance and private health providers. Here in the United States, we already have the basic infrastructure to do it as well: the Obamacare exchanges.
Here’s how it would work: Give every American household a voucher to buy a comprehensive policy on a state or regional exchange for a premium of no more than 10 percent of the previous year’s income. Co-payments and deductibles also would be capped. Premiums would be lower for the elderly and waived for those with disabilities or households with incomes under 200 percent of the federal poverty level. Medicare, Medicaid and employer-provided insurance would all fade away.
Let’s start with Medicaid, the health insurance plan for poor people that severely limits their choice of doctors, delivers disappointing health outcomes and, because it pays so little to providers, forces hospitals and doctors to overcharge everyone else. So why not let poor people choose from a variety of private insurance plans that compete for their business, just as happens for other Americans?
We already do that with the Medicare Advantage Program, which provides a single comprehensive policy to the 34 percent of seniors who select it and costs no more than traditional Medicare. With its separate programs for hospitals (Part A) and doctors (Part B) and drugs (Part D), each with different financial arrangements, traditional Medicare has become a confusing anachronism that creates perverse incentives and makes it hard to manage care for chronic conditions.
Getting health insurance from employers is another idea whose time has come and gone. Companies that offer it find themselves at a competitive disadvantage to chintzy companies that don’t. And it is based on a highly regressive tax loophole that costs the Treasury $150 billion a year. In an economy in which job switches and layoffs are common and millions of people work for themselves, tying health care to employers also discourages entrepreneurship, creates job lock and adds to economic insecurity.
With everyone getting insurance from the same exchanges, there would be dozens of insurers competing vigorously for customers in every state on the basis of price, service and health outcomes. The existing Medicare apparatus could be empowered to set caps on what doctors, hospitals and drug companies could charge and on insurance company profits. Wages would rise as companies no longer have to pay for insurance — that’s the consensus among economists. And having been relieved of their rapidly rising Medicaid costs, states could redirect hundreds of billions of dollars to education, infrastructure, housing and social services.
By my rough calculation, as much as $1 trillion of health-care spending would be shifted from states, businesses and households to the federal government, which, like in every other advanced country, could pay for it with a value-added tax — in effect, a national consumption tax. The current Medicare payroll tax could be abolished.
Right now, we tax corporate profits twice — once, at the corporation when the profit is made, and again when any of that profit is distributed to shareholders in the form of dividends or capital gains. This double taxation is economically inefficient and leads to rampant tax cheating.
The better solution is to tax all business profits — whether earned by a corporation, a small business, a partnership or sole proprietorship — at the same rate, and then give owners and shareholders a proportionate tax credit that they can use to offset personal income tax obligations. Experts refer to this as “integrating” the corporate and personal income taxes.
In the past, integration proposals from the business lobby were designed to reduce tax revenue and provide a windfall to businesses and the people who own them. A radical centrist version would do just the opposite.
The business profits tax could be set at 30 percent, well above the current 21 percent and close to the average in other industrialized countries. At the same time, the top individual tax rate could be raised from its current 37 percent to 40 percent and be applied not only to wage and salary income, but also to dividends and capital gains, now taxed at only 20 percent.
The same 40 percent rate also could be applied to inheritances valued at more than $500,000, even as the now hollowed-out estate tax is phased out. Unrealized capital gains, however, would be taxed at death, closing a gaping $50 billion-a-year loophole.
Under such a tax code, corporations would no longer be at a competitive disadvantage to LLCs and family-owned businesses. Corporate executives, business owners and private-equity managers would no longer pay a lower tax rate than the middle-class workers they employ. And billionaires would no longer be able to pass on fortunes to their heirs tax-free.
End class segregation in public schools
Although the Supreme Court declared that racial segregation of public schools was unconstitutional, it has never barred states from segregating public schools by class. And in too many metropolitan regions, they amount to much the same thing, with poorer black and Hispanic students clustered in failing inner-city school systems and richer, white students attending higher-performing suburban schools.
Because public schools receive much of their funding through local property taxes, schools in wealthier districts tend to have more resources and better teachers than poorer ones. But even in states where funding is relatively equal, there is ample evidence that segregating poor children in the same schools deepens their educational disadvantage. In class as in race, separate is inherently unequal.
It doesn’t have to be this way. As a condition of federal education funding, Congress could require states to create larger metropolitan-wide school systems with economically and racially diverse student populations that can equalize the distribution of resources and teaching talent. Using magnet schools, school choice, extensive busing networks and lotteries for the most sought-after schools, these school systems could ensure that no school winds up with a population that is overwhelmingly rich or poor.
National service, national dividend
The greatest threat to American capitalism and American democracy is the erosion of our social capital, the trust and responsibility we feel for each other and for the institutions that hold society together.
One way to begin rebuilding social capital would be to require all citizens to devote two or three years to national service sometime during their lifetime. Service could be performed when people are young, or after they retire, or sometime between. It could be provided through government programs such as the military, the Peace Corps or a reinvented Civilian Conservation Corps, or through an authorized nonprofit entity such as Teach for America, a local homeless shelter or arts group. Not only would such service improve the lives of our fellow citizens, but it also would give all of us a chance to meet, work with and live among people who are different from ourselves.
National service would reinforce the idea that we all have obligations to and responsibility for the country and each other. But it could also reinforce the idea that each of us has an equal claim on the nation’s bounty, tying national service to a national dividend that every citizen would receive. One way to do that would be for the government to set up a trust fund for every child born in the United States, to which it would contribute $2,000 every year until the child reaches 18. The money would be invested in a broad portfolio of U.S. stocks and bonds, so that by the time they set out in life, every young American would have around $50,000 that could be used to pay for college, start a business or put a down payment on a house.
I realize that at a moment when our politics is so polarized and the legislative process so dysfunctional, it sounds positively naive to imagine something so communitarian as national service tied to a national dividend — or for that matter, any of the other ideas on this list. But that is precisely why they would be so politically appealing, tapping into the deep craving among voters for initiatives that are practical and unifying and offer hope for the future. The administrative and financial details can be worked out later. For Biden, the more immediate challenge is to drag the political conversation out of an unsatisfying and unproductive rut by offering a set of bold, fresh ideas that promote equality and reinforce the feeling that we are all in this together.