Suppose you’re a hardcore fiscal conservative. You don’t give a hoot about social issues, and you don’t follow any of this nonsense about identity politics or insiders and outsiders. All you care about is getting the nation’s fiscal house in order.
Are you sitting down? I hope you’re sitting down. Because the candidate you should vote for might surprise you.
According to a new report from the nonpartisan Committee for a Responsible Federal Budget, the most fiscally conservative presidential contender left standing is . . . Hillary Clinton.
You’re probably used to thinking of Clinton as just another spendthrift liberal, oblivious to fiscal restraint. And it is true that she wants to expand the footprint of the federal government.
By a lot.
Consider her “New College Compact,” which would substantially reduce higher-ed costs for new students and lower debt for past ones. She also plans to expand the Affordable Care Act. Her proposed expansions and investments in clean energy, early-childhood education, family leave, veterans’ services and infrastructure look pretty costly, too.
On the other hand, Clinton also proposes a lot of tax changes and other policies that would raise revenue or save money.
These include imposing a surtax on personal income over $5 million; raising rates on medium-term capital gains; limiting the value of tax breaks; changing the immigration system; taxing carried interest as ordinary income; raising the estate tax rate; imposing a risk fee on large financial institutions; and some vague, as-yet-unspecified changes to the corporate tax code.
Here’s the bottom line for the nation’s bottom line: Clinton’s spending increases and other proposals that cost money have a total price tag of about $1.8 trillion over the next decade. But her offsets, which come mostly from tax hikes, would save an estimated $1.9 trillion over that same period (or closer to $1.6 trillion if you don’t count those as-yet-unspecified business tax proposals).
The net fiscal impact of her plans, then, is pretty close to zero.
To be clear, she’s not likely to reduce the federal debt. That presumably would be a more attractive outcome for the strictest of fiscal conservatives — including the number-crunchers at the Committee for a Responsible Federal Budget, who based their estimates partly on existing analyses from the Congressional Budget Office, Tax Policy Center and other outside research groups.
“While Secretary Clinton would not worsen the fiscal situation, she also unfortunately does not offer concrete proposals for improving it,” laments the organization’s report. “With debt at post-war record-high levels and projected to grow unsustainably, simply remaining on our current course is not enough,” it adds.
Still, contrast Clinton’s plan with those offered by, oh, every other presidential candidate in the race, all of whom would blow multitrillion-dollar holes in the budget.
Bernie Sanders proposes to expand the reach of the federal government far more than Clinton would, and he promises to offset his spending increases with commensurate tax hikes. Many of the underlying assumptions his campaign used to get these numbers to add up, however, are way too optimistic.
An earlier Committee for a Responsible Federal Budget analysis estimated that the net budget shortfall resulting from all of Sanders’s proposals would add somewhere between $2 trillion and $14.8 trillion to the federal debt over the next decade, depending on how quickly you assume health-care costs will rise.
On the Republican side — the party allegedly devoted to fiscal responsibility — things look just as bad. The GOP candidates all offer massive, across-the-board tax cuts that they don’t even attempt to pay for.
Donald Trump would cut tax revenue dramatically, while simultaneously raising spending on programs such as veterans’ health care. The Committee for a Responsible Federal Budget ballparks the total cost of his proposals at $11.7 trillion to $15.1 trillion over the next decade, again depending on what underlying assumptions you make.
Likewise, Ted Cruz’s various proposals — which include tax cuts, a repeal of Obamacare and a bigger military — would add between $2.7 trillion and $21.3 trillion to the federal debt.
John Kasich, who somehow fancies himself the lone fiscal grown-up in the race, remains the only candidate who has released so few details that none of the major budgetary watchdog organizations has even attempted to score his policies. Given that his tax plan looks a lot like Jeb Bush’s, however, we can assume he’d add trillions in red ink, too.
Without fail, these candidates claim that ludicrous levels of economic growth will paper over their budgetary shortfalls. As I’ve observed before, though, the more growth a politician promises, the worse their economic plan tends to be.
Maybe when (if) voters start to notice this, Clinton will finally receive the praise she’s been due, from arithmetic fans and fiscal conservatives alike.