She deserves credit for finally producing a plan for that. But even if the numbers added up—and they don’t—it might well tank the American economy.
Sen. Elizabeth Warren Friday fulfilled her pledge to propose a specific plan to finance Medicare-For-All. She deserves enormous credit for abandoning her earlier dismissals of the $30 trillion financing question and producing a plan that spells out the required new taxes. However, promising to shield middle-class families from new taxes forces Warren to propose an unrealistic level of health-care savings, as well as new taxes on businesses and investors that are nearly unprecedented in the modern economy. A more realistic accounting of this plan would likely leave a substantial funding hole even before the questions about how the economy would respond to this avalanche of taxes.
Before diving into the plan itself, it is worth noting that the current Medicare system already faces a surging annual cash shortfall that is projected to total $44 trillion over the next 30 years–plus an additional $28 trillion in resulting interest costs–that will need to be financed with general revenues. Warren’s standard of “paying for” Medicare-For-All refers only to financing the additional federal costs of her new proposal. It would not reduce the federal government’s current health care deficits that are already driving long-term federal deficits. And in fact, the large Medicare-For-All taxes would leave few remaining options to close this baseline gap. Perhaps candidates should figure out how to pay for the current Medicare system before expanding it.
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