If Kamala Harris follows through on the proposals she supported when she first ran for president, the federal budget will be in even greater trouble than it already is.
Harris went overboard during her failed 2020 campaign for president, spending $40 million despite dropping out before the first primary vote was cast. Her policy positions have demonstrated a similar level of fiscal discipline.
For example, she co-authored Sen. Bernie Sanders’s socialist “Medicare for All” health care bill, which the left-leaning Urban Institute estimated would cost $34 trillion over 10 years.
As a senator, Harris also introduced legislation advocating for a refundable tax credit of up to $3,000 a year for low- and moderate-income families, with the exact amount subject to income restrictions. This would be in addition to, not a replacement for, all existing welfare programs and tax credits for families. The international think tank Tax Foundation has estimated that the new tax credit would cost $2.7 trillion over a decade.
She wanted people to receive $2,000 a month from the federal government for the entirety of the pandemic emergency. That proposal would have cost $21 trillion over just three years.
Even under the most optimistic scenarios for Democrats, congressional majorities are unlikely to be large enough to support a massive health care overhaul that would throw 180 million people off their private insurance plans. The portal Axios said Wednesday (24) that Harris plans to pursue “parts of Joe Biden’s domestic agenda that never reached the finish line.”
On several occasions during the “Build Back Better” debate (the Biden administration’s proposal that sought to increase national public investment in social, infrastructure and environmental programs), the price tag for this agenda was cited as exceeding $6 trillion. Harris wants universal preschool and more federal spending on eldercare and childcare. She has said she wants everyone to have paid family leave.
Biden has promised not to raise taxes on people making less than $400,000 a year, which is 98% of taxpayers. Harris has not said whether she will keep that promise.
If he does, his campaign is promising European levels of welfare programs without European levels of middle-class taxation. That means huge deficits.
Harris has said she supports raising the corporate tax rate to 35 percent from 21 percent, which would make the U.S. rate the highest among the world’s major powers. On a personal level, she wants to raise the top marginal rate to 39.6 percent and tax capital gains, at least for some taxpayers, at the same rate as ordinary income.
She also supported financial transaction taxes and an expanded inheritance tax. These tax increases would not come close to raising the revenue her plans call for, but they would do much to slow economic growth by reducing investment in the country.
Under the Biden-Harris administration — and don’t let the left erase this brand that Democratic administrations have worn for years — the national debt is growing even faster than the already huge gap between revenue and spending was expected.
The Congressional Budget Office (CBO), which provides budgetary and economic information to the US Congress, revised its deficit estimate from $400 billion for the current fiscal year to $1.9 trillion.
Republicans have also been fiscally irresponsible, both in government and in campaign promises. The bullet list that is passing as the GOP platform this year canonizes that irresponsibility, promising “big tax cuts” coupled with no cuts to Social Security or Medicare, the entitlement programs that are driving the debt.
The platform’s promise to “control unnecessary spending” doesn’t include details on how that would actually happen.
However, it remains the case that there is no tax cut package that Republicans could propose that would cost $21 trillion over three years, because the federal government only collects about $4.5 trillion in annual revenue.
It’s hard to imagine one that could cost $34 trillion over ten years. Leaving the insolvent status quo in place is bad, but adding tens of trillions to it with new government programs is even worse.
Republicans would be wise to take advantage of Harris’s fiscal irresponsibility by proposing a real spending reform agenda that gives voters a clear choice between growing deficits and basic decency.
Continued deficit spending by the federal government, despite low unemployment and a growing economy, contributes to inflation and creates upward pressure on interest rates, crowding out private investment and making mortgages less affordable.
We’re not holding our breath for a more sober Republican fiscal platform right now. But in a competition to break the bank, Harris seems likely to take the lead.
©2024 National Review. Published with permission. Original in English.
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