She suffered an embarrassing blow when economist Mark Zandi who signed off on Warren’s math calculations came out against her plan. He said, "I’m skeptical the wealth tax will generate the same amount of revenue after considering all her plans together. . . . I am not a fan of Medicare for All. We have 160 million people who have private insurance and are pretty happy with what they have. Why change that?” Yikes.
Former auto-industry czar Steven Rattner adds his voice to the chorus of critics. We spend an awful lot already on health care, he says about $52 trillion over the next decade, “currently split among the federal government, the states and the private sector, with the federal government making up only about 29 percent of the total.” Rattner explains nearly all of that plus about $7 trillion more to cover all Americans would shift to the feds under Warren’s plan.
Rattner makes a point few others have identified: “Warren’s plans (mostly health care, but including education and other proposals) would change that historic relationship dramatically. New taxes and other revenues that would be imposed would increase Washington’s share of the economy to around 27 percent, a more than 50 percent increase from current levels.” It would behoove Warren and her supporters to consider how that may affect growth, job creation, wages and a host of other critical economic factors.
Rattner, as others, also finds fault with the math. He counts up the $12.6 trillion in new corporate taxes; $4.4 trillion of added taxes on wealthy Americans; a $800B military spending cut; and “savings” from immigration reform. Rattner finds: “That leaves $15.9 trillion, which includes a variety of the gimmicks that many other public officials have used futilely to try to make their budget math work, like tougher Internal Revenue Service tax enforcement.”
Rattner is being generous since there is every reason to doubt that a President Warren would get the military cuts or comprehensive immigration reform. It is even more far-fetched to think the rich won’t evade a good chunk of the $4.4 trillion in wealth taxes.
Aside from the math, Warren avoids the biggest and most consequential cost: The opportunity cost. Instead of selling and, if elected, trying to enact an unattainable plan, she could be building consensus and then fighting to enact much needed, attainable and significant reforms.
Rattner points out, “We can improve the Affordable Care Act. Spending on infrastructure and research and development — two critical government functions — should be increased.” Warren, however, will be out panning for gold, chasing after riches (from a tiny segment of the population, whom we better hope doesn’t lose money or give it away and leave health care without a funding source) and dreaming up elaborate scheme when winnable fights are delayed. (When during the fight for Medicare-for-all is she going to carve out space to fight for comprehensive immigration reform, which itself might be impossible?)
Instead of a tax on the wealthy that will never pass, will be open to constitutionally suspect and will be reduced by clever accountants (gifts to children, overseas transfers, etc.), she could be pushing for feasible changes such as narrowing or eliminating the difference between wage and capital-gains tax rates or ending the “step up” on assets at death. Instead of losing a Medicare-for-all fight, she could be winning on extending Medicaid to the remaining states and passing a workable drug-cost-control measure.
Warren likes to say Democrats should nominate someone who will “fight” for “big, structural change." Actually, they should run from a candidate who is going to lose to Trump and/or waste political capital tilting at windmills.
The more vulnerable someone is — a "dreamer," a chronically ill child, a mother living in poverty — the less patience he or she may have with someone shooting for the moon and the stars. These Americans have heard extravagant promises before; they deserve someone who is going to improve their lives as much as possible and as quickly as possible. For them, these issues can be matters of life and death, not fodder for an abstract debate.