President Bernie Sanders would dig an $8 trillion hole

October 12, 2015

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A Bernie Sanders White House would be $8 trillion in the hole over a decade. The socialist U.S. presidential hopeful wants to shake up the U.S. economy with dramatically more spending. His promises from free college tuition to a government health system, which he is likely to outline during Tuesday’s Democratic presidential debate, would cost far more than additional taxes would bring in.

The Vermont senator’s most expensive idea is to convert the American healthcare market to a national system with the government as the single payer. Sanders would essentially extend the current Medicare program, which is for retired people, to everyone. Breakingviews calculates that this would cost some $9.6 trillion more than current projections over the usual 10-year budget period, based on 2010 healthcare spending and other assumptions including a 25 percent discount thanks to Medicare-style negotiating power and price controls.

Sanders wants another $1 trillion to spend on infrastructure. U.S. roads, bridges, trains and the like need investment, but it’s still a hefty sum. And Breakingviews estimates that his call for free public college for everyone who wants it will cost almost as much again, while universal daycare will weigh in at around $500 billion. Along with four other proposals, this yields $12 trillion in new spending. That’s about 25 percent more than currently projected over 10 years.

The candidate running under the slogan “Feel the Bern” isn’t shy about boosting government revenue, too. He would institute a Wall Street trading tax, aiming to raise $1.5 trillion over 10 years. His corporate tax plan would eliminate most loopholes and deductions but leave today’s 35 percent rate intact and applicable to global profit, which Breakingviews calculates would bring in another $1 trillion. Lifting the income ceiling for Social Security payroll tax would bring in a similar amount. All-in, Sanders would lift revenue by about $4 trillion over a decade.

It may be he has other tax increases in mind beyond what he has already mentioned, or thinks some of the spending will boost GDP growth and hence revenue. But $8 trillion isn’t the kind of money easily found between couch cushions, even in the lofty expanse of the U.S. economy. If Sanders wants to realize his socialist dream, he’ll need much higher taxes to achieve it. Coming clean on that might reverse the trend that has narrowed his polling gap with front-runner Hillary Clinton.

22 comments

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The expansion of medicare to all people would be accompanied by an increase in medicare taxes, he has admitted this and its also pretty common sense. Medicare for all may cost 10 trillion over 10 years but Americans are projected to spend 42 trillion of 10 years with out current system. Thats a fair amount of money freed up for spending and growth.

Posted by ksmzao | Report as abusive

Bernie Sanders health care plan is estimated to SAVE $5 trillion over 10 years, I don’t know where you’re getting the $8 trillion from.

http://www.huffingtonpost.com/gerald-fri edman/the-wall-street-journal-k_b_814306 2.html

Posted by Berner | Report as abusive

Based on Sanders interviews you can expect the following tax increase proposals and their stated uses.
The wall street Robin Hood tax you mentioned would go towards education (states would have to match some of the fuds).
Closing the deferment and carried interest loopholes would be used for infrastructure and to reduce the deficit.
The removal of the social security tax cap would be used for social security only.
An increase of the top tax rate to 40 % or additional brackets for mega earners would be used to eliminate the deficit and start paying down the debt.
The big question is health care, but you can expect the medicare / medicade tax to double.
So if your income is less than 120k a year you would be looking at a 3-4% tax increase. Hope that helps.

Posted by Daolong | Report as abusive

Oh, I forgot to mention that the medicare / medicade payroll tax increase has not been mentioned specifically by Sanders in his interviews. That number comes from a study the American Medical association did for Congress a few years ago that estimated the cost of putting a Bismarck health care system in place. Single payer systems tend to actually be cheaper.

Posted by Daolong | Report as abusive

This article was B.S. two weeks ago when the WSJ tried to spin the numbers to 18 trillion. As is, at this moment and compensating for no change of the program over the next decade, there will be 18 trillion in new spending on health care. The Sanders plan actually reduces that allocated raise in spending to only 13 trillion over the next decade, thus actually banking a 5 trillion dollar savings in that period of time.

Posted by JKirk | Report as abusive

Breaking “views” sounds like breaking news which is (intentionally?) confusing for the reader. This is a “breaking” opinion, whatever that might be… Perhaps something of an unfounded unfortunate knee-jerk?

Posted by NYU87Journalism | Report as abusive

It’s clear Rueters made a big assumption in calculating the cost of Sanders plan in that they assumed the cost would be similar to an extension of Medicare. However a single payer system would operate very differently. Comparing US healthcare cost to any other country shows that the average American would save a significant amount of money under Sanders plan. See the charts in the link below:

http://www.pbs.org/newshour/rundown/heal th-costs-how-the-us-compares-with-other- countries/

Posted by samsstats | Report as abusive

Hello, Mr. Indiviglio:

How do you address the following by former U.S. Sec’y of Labor, Robert Reich, written more than a week ago, which addresses the core elements of your argument as set forth by the Washington Post at about that same time?

http://www.alternet.org/election-2016/ro bert-reich-washington-posts-pathetic-att empt-attack-bernie-sanders

With appreciation.

Posted by tdplumer | Report as abusive

Another dumb senator – time to impeach 535 clowns + I Criminal-in-Charge for treason, fraud

Posted by jackdanielsesq | Report as abusive

Things Bernie wants for this country is good for Americans…But bad for corporate investors who want all profits and benefits and prosperity to go to the top…This is the GOP mantra….I know Bernie would have a hard time getting these things passed but I would be happier knowing I had someone in office fighting for us instead of selling us out (Obama comes to mind)..So let the industry Hacks like the writer of this article keep trying to bring him down they are scared of his movement…They will tell many lies..But the truth is we know the truth and we know these industry shills are nothing but trolls for the industry..They dont scare us with their lies we will vote for BERNIE….anyway.

Posted by akita96th | Report as abusive

Better to spend 8 trillion making the USA better than spending the same amount making Iraq worse.

Posted by wdan | Report as abusive

Go Get ’em Bernie – in my 56+ years on this planet one of the two presidential candidates I’ve supported! So taxes will rise to cover health care – perhaps that will be accompanied by the elimination of what I currently pay each month for the privilege of being able to get sick without going broke! Improving the bridges and highways will bring about an increase in blue collar employment – what’s wrong with that?
As for Hillary, you can tell when she lies, her lips move … she sways with the winds and changes her story to try and adapt to what’s going on.
As a long time leftist I’ll take a good old socialist any day of the week – I see no negatives with Bernie – I just hope that the democratic machine doesn’t push him out of the way to make room for one of the republican idiots like Trump

Cheers

Steve

Posted by MikeEaster | Report as abusive

So the US would hit the 25 trillion mark – gooooooo Bernie.

Actually I do wonder at what point the world will say stop…. just stop with the debt.

Posted by SR37212 | Report as abusive

You forget to mention the fact that Bernie’s plan will actually SAVE Americans money:
https://www.washingtonpost.com/blogs/plu m-line/wp/2015/09/15/no-bernie-sanders-i s-not-going-to-bankrupt-america-to-the-t une-of-18-trillion/

Posted by EuroYankeeBlog | Report as abusive

“Breakingviews calculates that this would cost some $9.6 trillion more than current projections over the usual 10-year budget period, based on 2010 healthcare spending and other assumptions including a 25 percent discount thanks to Medicare-style negotiating power and price controls.”

This essay illustrates either the deficiencies of Indiviglio’s BA in economics or his disingenuous logic.

Currently, the US population spends $3.8 trillion ANNUALLY on health care via private insurance plans. Anyone with a calculator can compare the delta and savings represented by a ‘medicare-style’ plan, based on his figures.

Posted by wilhelm | Report as abusive

for a fact-based analysis of medicare costs, see the Kaiser Foundation study:

http://kff.org/medicare/fact-sheet/medic are-spending-and-financing-fact-sheet/

Posted by wilhelm | Report as abusive

This guy is so wrong and so incomplete on so many levels I don’t know where to start. This is not reporting….this is a hit piece. Corporate media hit piece…thank you very little.

Posted by Buckage23 | Report as abusive

Indiviglio is the one who needs to come clean. In his analysis of the financial impact of Sanders’ economic plan he failed to include the cost saving impact of eliminating the trillions spent each year on private health insurance premiums. His failure to include this information feeds the misinformation mill that seeks to maintain the most hideous healthcare funding system in the modern world.

Posted by boblib | Report as abusive

These are the same conservative tools who said Obamacare would break the country, Iraq would save us money, and the XL pipeline would be the only thing keeping us from $200 per barrel oil (never got built and oil fell to $43 per barrel).

Conservative political predictions on the economy are seldom right.

Posted by Solidar | Report as abusive

These conservative pundits are the same people who said America would recover the 3 trillion dollars we spent on Iraq…. and then some.

Any day now, folks.

Posted by Solidar | Report as abusive

the added cost would be well spent and would replace costs for health care which would occurr anyway.. the chart used and the numbers and title for this article are misleading and fail to account for replaced expenses.. single payer health care is financially the best option.. businesses of all types would gain from a healthier workforce and no longer have costs associated with employee medical and injuries sustained on the job would also be covered.. not having to worry about a child or spouse becoming ill or injured will provide for a higher quality of life.. the only stumbling block to this sensible intelligent proposal by Bernie Sanders is a foolish Republican Congress.. hopefully we can replace these morons in the election to come..

Michael Garcia

Posted by MichaelGarcia | Report as abusive

Breaking news? More like broken news.

Posted by jbdenver | Report as abusive