After months of this pressure, on Friday, she finally released her comprehensive Medicare-for-all plan, which promises lower costs for everyone, paid for by taxes on corporations and the rich.
The good news is, the math adds up, as long as you buy her assumptions. The bad news is that Warren’s assumptions are crazier than keeping a pet rhinoceros, after which, who cares that her calculator works? This is to actual policymaking as the plastic noodles in a ramen-bar window is to lunch.
To wit: Warren says she can deliver a generous Medicare-for-all plan with only $20.5 trillion in additional federal spending. That’s a quarter to a third less than any serious estimate of the plan from outside her campaign. How will she get there? Why, by slashing administrative costs and then mandating that everything else cost less. Warren is not exactly the first progressive reformer to have this same idea, and if she pushes forward with it, she will be but the next in a long line to discover that she can’t make it work, politically or economically. As Philip Klein of the Washington Examiner dryly noted, Warren could just as well have written that Mexico was going to pay for her big, beautiful plan.
Warren’s revenue ideas are, if anything, even more exquisitely incredible. Take her proposed wealth taxes — no, not the 3 percent ultra-millionaire wealth tax she has already pledged for other things, but an entirely new 3 percent tax on all wealth over $1 billion. The tax would, Warren says, raise $1 trillion over 10 years.
The assumption is typical of her whole plan. Because on one level the math does work: The United States has about 600 billionaires, and by my calculation, the total value of their wealth-taxable assets would be something under $3 trillion. Three percent of that, collected 10 times, should indeed yield nearly $1 trillion.
On another, more important level, the idea is ludicrous in terms of the tax code and basic common sense. After adding in the ultra-millionaire’s tax and factoring in the other capital taxes Warren wants to levy — on financial transactions, on unrealized capital gains, on corporations — we’d be asking every billionaire to hand over more than two-thirds of their total wealth over a 10-year period. If the government actually managed to collect it, their fortunes would rapidly erode — and so would tax collections. The plan might be a good way to smash wealth, but it’s a terrible way to fund the nation’s health-care system.
The best you can say for all of this is that none of it will happen. If Warren makes it to the White House, and tries to pass a plan, the Congressional Budget Office will eventually attach more reasonable numbers, with more defensible assumptions, sparking an even more spectacular political blowback than the one that greeted Friday’s announcement. Outside of the progressive Twitterati, there isn’t necessarily an enormous constituency for spending $20.5 trillion to herd every American into a national health insurance program; there would be even less support for spending what Warren’s plan would actually cost.
And even if she somehow pushed her program through, there’s a good chance that courts would strike it down, because so many of the revenue-raisers may be unconstitutional. Between the problems with her wealth taxes (Article I, Section 9), her plan to divert employer premiums to the government (ex post facto taxation of health benefits) and her requirement that state and local governments toss $3 trillion into the kitty (anti-commandeering doctrine), Warren would be a couple of adverse court decisions away from a $15 trillion hole in her $20 trillion plan.
Stripped of the Warren plan’s math-like veneer and the unreasonable reasoning, this is all rather embarrassing — or to steal a phrase, more of a slogan than a plan. It’s certainly not one of the highlights of Warren’s campaign.