When proponents of Medicare-for-all are asked how they plan to pay for their vastly expanded entitlement program, they typically stress that such a system would save hundreds of billions of dollars because it cuts out the administrative services and profits in the private health-care industry. The government would also be able to use the size of its customer base against drug companies, forcing them to lower prices: Overall, according to one generous estimate by the conservative-leaning Mercatus Center, such a reduction would lower national spending by $2 trillion over the next 10 years.
Of course, that’s not nearly enough for the government to cover the entire cost of health care. The Mercatus Center found that, even with those savings, a Medicare-for-all system would add some $32.6 trillion in spending over the course of 10 years. So how would we cover those costs under Medicare-for-all? Simple, its proponents argue: through taxes. Sure, this might be a huge raise in the average person’s payment to the government, but taxpayers would also be getting rid of other monthly payments in the form of health insurance premiums. The average consumer’s costs would stay about the same, the system would be more efficient and it wouldn’t add any more debt to the government because taxpayers are covering it.
But this poses a whole other round of questions that are rarely asked of progressives. If health-care costs continue to rise — as they have for decades in every country regardless of the structure of its health-care system — how are we supposed to structure our tax collection to pay for a single-payer system? Will we automatically keep raising taxes to match health-care costs? How do we guarantee that lawmakers regularly update what will inevitably be an unpopular tax burden so that health-care spending doesn’t result in massive deficits in our federal budget?
The answer shouldn’t surprise you: Progressives don’t know. Nor do they care. This they made abundantly clear in announcing this week their opposition to a common-sense rule designed to keep federal deficits to a minimum.
On Wednesday, a number of prominent progressives announced that they would not vote for a rule backed by Democratic leadership known as PAYGO, or “Pay As You Go,” which would require the incoming Congress to offset any new spending with either an increase in taxes or a cut in government spending. In other words, it’s meant to keep deficits from spiraling further out of control.
We know that PAYGO is a powerful tool that works to rein in spending given its success in the 1990s, which ended in a rare budget surplus. But this, apparently, is not a worthy goal for progressives.
“I do not understand why the Democrats don’t have the courage of our convictions and make the case that our policies will lead to growth,” said Rep. Ro Khanna (D-Calif.). “PAYGO is to protect members in vulnerable districts who can say that Democrats are for fiscal responsibility. I’m all for raising taxes on the 1 percent and multinational corporations and stopping our excessive spending on the bad wars. But we should make an economic growth argument in swing districts instead of thinking the ’90s playbook of fiscal responsibility will work."
Progressive favorite Rep. Alexandria Ocasio-Cortez (D-N.Y.) quickly chimed in on Twitter with her support: “PAYGO isn’t only bad economics, it’s also a dark political maneuver designed to hamstring progress on healthcare + other leg. We shouldn’t hinder ourselves from the start.”
We shouldn’t hinder ourselves on health care? Perhaps Ocasio-Cortez is due for her own “nobody knew health care could be so complicated” moment. The fact is, we are already hindered by the reality of our fiscal limits. The government simply cannot do everything without finding the resources to pay for it. Anyone who comes to this town unwilling to accept that is in for a rude awakening.
In any case, these progressives are signaling clearly that they have an agenda and they don’t want fiscal discipline to get in their way. We should be very skeptical of this firebrand progressivism, and it’s not just because interest on our national debt is already the fastest-growing federal expenditure. It’s because we shouldn’t trust politicians who promise radical changes without contending with the stark limits of government. Haven’t we learned anything from 2016?