Howard Schultz, the former Starbucks CEO considering a run at the White House as an independent candidate, believes the federal debt is the nation’s “greatest threat,” thinks America cannot afford to give all its citizens free health care, and has argued for cuts to government entitlement programs, such as Social Security and Medicare.
Schultz appeared on CNN for a town hall event on Tuesday night as he considers his presidential bid, but was not specific about his solutions to a number of policy issues, including how he would improve the Department of Veterans Affairs and what the top tax rate on earners should be.
“I will fix the VA, because it’s about leadership, it’s about character, and it’s also about the temperament of humility to listen to people who are smarter than you, who have more experience than you, to help solve this problem," Schultz said.
Schultz’s aides have not responded to numerous requests for clarity on his call to “go after” Social Security and Medicare, refusing to answer questions about whether he believes the retirement age for Social Security should be raised or if the Medicare eligibility age should be higher than 65.
Schultz has attacked a number of tax proposals that have become increasingly popular on the Democratic left, including Rep. Alexandria Ocasio-Cortez’s proposed 70 percent marginal tax rate on those earning above $10 million and Sen. Elizabeth Warren’s proposed wealth tax on those with more than $50 million in assets.
The former Starbucks CEO has characterized his potential presidential run as appealing to a moderate “silent majority” of voters disaffected with both political parties, whom he sees as veering to the left and the right, leaving open the center. Others say that “silent majority” does not exist.
Schultz has embraced social liberalism on a number of issues, including promoting diversity in corporate culture and LGBT rights, while also rejecting Democratic plans such as “Medicare for all” and the Republican tax law of 2017 as prohibitively expensive. On immigration, Schultz has said he opposes Trump’s proposed wall along the U.S.-Mexico border and believes in protecting the 800,000 immigrants brought to this country as children, known as Dreamers.
“We’re living at a most fragile time,” Schultz said Sunday on CBS’s “60 Minutes.” “Not only the fact that this president is not qualified to be the president, but the fact that both parties are consistently not doing what’s necessary on behalf of the American people and are engaged, every single day, in revenge politics.”
Here are some of the policies that Schultz has promoted that he may believe can power him to the White House.
The debt is the “greatest threat” to America. The federal government’s debt burden has ballooned to $21 trillion, with debt as a share of the overall U.S. economy expected to rise to 105 percent by the end of 2029, according to a report published Monday by the Congressional Budget Office. Annual federal deficits are nearing $1 trillion, or around 4 percent of the total economy, the CBO said. That’s a historically high number, given that deficits typically fall in periods of low unemployment and economic growth, which the United States is currently experiencing.
Schultz has said he would make reducing the deficit one of his top priorities as president, calling it “the greatest threat domestically to the country . . . hanging over the cloud of America and future generations.”
Budget hawks have applauded Schultz’s stance on the government’s red ink, with some saying that both parties have abandoned fiscal discipline. “Republicans talk about deficit reduction and worsen the red ink, and Democrats are competing with each other for who can add the worst debt,” said Brian Riedl, a budget expert at the Manhattan Institute, a right-leaning think tank. “It’s nice to have somebody in the race talking about making difficult decisions to keep the country from going bankrupt.”
But many liberals reject the notion that the deficit poses an imminent danger to the nation, as economists point out that both interest rates and the current risk of inflation remain low.
Environmental activists have in particular scoffed at the notion that the debt, rather than climate change, is the biggest threat to America. “One of the greatest problems facing America [is] . . . an oligarchy that has little incentive to actually solve the crises of skyrocketing inequality, structural racism and the climate change,” said Waleed Shahid, communications director at Justice Democrats, a left-wing group.
A poll from the Pew Research Center found just 48 percent of Americans believe the deficit should be a “top priority” for the president and Congress, with the economy, health care and terrorism leading the pack instead.
He opposes proposed higher taxes on the wealthy. Despite his calls to reduce the deficit, Schultz has blasted as unrealistic plans by Ocasio-Cortez (D-N.Y.) and Warren (D-Mass.) to raise trillions in tax revenue from the wealthy to pay for federal programs like health care, infrastructure and education.
“I’m not considering this to win the Twitter primary,” Schultz told Axios in explaining his opposition to the liberal firebrands' plans. “I believe that lifelong Democrats and lifelong Republicans are looking for a home, and they’re not spending hours and hours on Twitter.”
Two left-leaning economists found that Warren’s wealth tax would raise close to $3 trillion over 10 years, while Ocasio-Cortez’s could raise close to $1 trillion. Schultz would personally pay an additional $91 million in taxes under Warren’s wealth tax, according to a calculation based on Forbes' ranking of the richest Americans. His wealth still would have grown by about 25 percent under Warren’s tax from 2017 to 2018, Ernie Tedeschi, a former economist in the Obama administration, said on Twitter.
Conservatives have attacked both plans as likely to discourage entrepreneurial risk-taking and private enterprise. America has had marginal tax rates well over 70 percent for much of the 20th Century, while several European countries, such as Switzerland, have wealth taxes.
Medicare and Social Security. Schultz has called for reducing the federal debt by targeting entitlement programs, but he’s been vague about the details. The two biggest entitlements are Social Security and Medicare.
“We have to go after entitlements,” Schultz has said. “ . . . It’s not about redistribution, it’s about facing these hard truths and dealing with significant problems.” Schultz’s aides did not respond to questions to identify how much the former Starbucks CEO would want to cut Medicare or Social Security.
Social Security keeps 22 million Americans out of poverty, including 1.1 million children, with an average benefit of $18,000, said Alex Lawson, executive director of Social Security Works, an organization that supports the program. Lawson pointed to federal statistics showing Social Security is expected to remain flat as a percentage of gross domestic product through 2090.
“There’s been a notorious and outrageous propaganda campaign waged by billionaires who see $2.9 trillion sitting in trust for U.S. workers,” Lawson said. “Schultz can’t stand that Wall Street can’t get their greedy little hands on that pot.”
He opposes Medicare-for-all plans. Schultz has also attacked Democratic politicians who have embraced “Medicare for all,” a proposal to nationalize the health insurance industry.
Medicare for all would move every American to a single government-run insurer that charges no deductibles or premiums. Doing so would significantly increase government expenditures — by as much as $33 trillion over a 10-year period, according to one conservative think tank’s estimate. It would offer health insurance to the Americans who lack it and prevent millions more from being forced into medical bankruptcy.
Such a plan would require enormous tax increases to finance, although supporters maintain that they would be offset by zeroing out every family’s spending on premiums and deductibles. Supporters also say Medicare for all would lower overall health-care spending in America, even though government spending on health care would increase.
“That’s not correct. That’s not American,” Schultz said when asked about Sen. Kamala D. Harris’s (D-Calif.) embrace of the plan. “What’s next? What industry are we going to abolish next? The coffee industry?”
Schultz has also said he opposes Republican plans to repeal the Affordable Care Act, passed under President Barack Obama. “The Republicans want to get rid of the Affordable Care Act. I don’t agree with that,” Schultz said. “The Affordable Care Act should stay and be refined. To think to get rid of the insurance industry, this is the situation, it’s far too extreme from both sides.”