By Senate Finance Committee Chairman Chuck Grassley
A government-run health insurance system dubbed as “Medicare for All,” and the Green New Deal represent the Democratic Party’s most prized policy proposals. Both make sweet-sounding promises but will deliver a bitter economic reality.
Conservative estimates for the cost of a government-run health care system, like the one being proposed by Sen. Bernie Sanders, range between $32 trillion and $36 trillion. It would force Americans to pay more than double the taxes they now pay. It would also create new taxes and vastly expand existing ones.
This government-run health care plan would impose an additional 4 percent income tax on employees, which is referred to as an “income-based premium paid by employees.” The addition of this tax would increase costs for individuals and families to the tune of $3.9 trillion. The Democrats’ plan would also add a 7.5 percent payroll tax on employers. According to estimates, this would increase taxes on employers by $3.5 trillion over 10 years.
The proposed government-run health care system would broaden the self-employment tax to require certain business owners to report more of their business income as salary. The move would increase taxes on more than 28 million small businesses in the United States by $247 billion over 10 years.
The Democrats’ proposed plan would also ban employer-provided insurance and repeal the tax deduction for major medical expenses, increasing taxes on businesses by more than $3 trillion over a decade. Additionally, it would eliminate Health Savings Accounts and flexible spending accounts that are used by an estimated 25 million American families and overwhelmingly benefit middle-income earners. Overall, this would increase taxes on families and businesses by $4.2 trillion.
A government-run health care system would not solve the number one concern Americans’ have with the current health care system – exorbitantly high prices. Instead, it would balloon costs to astronomical levels. And, in return for paying higher health care costs, Americans would have to cede control over their health care decisions to the federal government.
Health care consumers would no longer be able to choose benefits that would cover their specific needs. Under a government-run insurance system, bureaucrats in Washington would decide what specialized medical procedures an individual could receive. Among others, the government would also decide what prescription drug therapies and medical devices an individual could receive.
The bottom line is that under a government-run health insurance system, Americans would pay significantly more for one-size-fits-all health care and lose the ability to make health care decisions that are in their best interest.
A $36 trillion price tag for a government-run health system is astounding; that is until you consider the cost of another major policy proposal Democrats are trying to sell to the American people – the Green New Deal. Its total cost is estimated to be between $51 trillion and $93 trillion. That’s approximately $316,010 to $419,010 per household. Ninety-three trillion dollars is an almost incomprehensible amount of money. To put it into perspective, that’s more than the U.S. government has spent in its entire 230-year history.
Democrats have floated a number of ideas on how to cover the enormous cost of the Green New Deal. Sen. Elizabeth Warren’s annual wealth tax proposal would raise an estimated $2.75 trillion over a decade. Sanders’ death tax proposal would raise approximately $315 billion over a decade. Rep. Peter DeFazio’s financial transaction tax proposal would raise roughly $777 billion. Even if you believe those questionable revenue estimates, all together, these tax-increasing plans would only cover between 5 and 10 percent of the Green New Deal’s total cost.
The $93 trillion tab that Democrats want to bill to the American people would be for an impractical proposal that promises to solve a problem that our nation has already taken significant steps to address.
The United States’ consumption of biofuels and other renewable energy has more than doubled between 2000 and 2017 according to the U.S. Energy Information Administration. It has also reduced carbon emissions by 758 million metric tons per year since 2005, which is the largest decline of any country in the world.
My home state of Iowa generates nearly 37 percent of its electricity from wind. The state’s largest utility is set to harvest 100 percent of its electricity from wind within a couple of years. Iowa is also the first in the nation in ethanol and biodiesel production. Innovations in clean alternative energy sources are happening in Iowa and all across the country, and they continue to improve every day. Meanwhile, countries like China and India are increasing their carbon emissions.
The goal of the Green New Deal is to obtain net zero carbon emissions within 10 years. Not only is that wholly unrealistic, but it’s also a vehicle to pick the pockets of Americans while sending our roaring economy into a tailspin. Although Democrats will argue that only the wealthiest Americans will be hit with tax increases, there simply aren’t enough millionaires and billionaires in the United States to cover the costs. Every American, no matter their economic standing, will have to pay more – lots more.
The American economy is better now than it has been in decades. The national unemployment rate is at historic lows. Every income group in every state is paying less in taxes on average. Since the enactment of tax reform, income, wages and jobs have all improved and are creating new and better opportunities for Americans. It’s hard to believe that Americans would want to trade in economic prosperity and personal freedom for policies that leave them with substantially higher tax bills, fewer choices and an even more bloated federal bureaucracy.
As a country, we need to build on and improve what is working and fix what’s broken. I and many others in Congress have taken steps forward to reduce the costs of health care. That includes my bipartisan legislation with Sen. Dick Durbin to require pharmaceutical companies to list prices of their prescription drugs in direct-to-consumer advertisements.
Additionally, legislation like the CREATES Act and the Preserve Access to Affordable Generics and Biosimilars Act would help end abusive practices that block generic competition. This would help lower prescription drug prices.
When it comes to clean energy, states like Iowa are leading the way in technologies that are reducing emissions and working toward a cleaner, environmentally-sound future. These are worthwhile goals. Achieving them will take time and thoughtful, bipartisan solutions.
The honey-laced promises of government-run health insurance and the Green New Deal are riddled with poison pills that would erase the progress we’ve made and saddle Americans with an overwhelming price tag. These proposals are not the way forward.
By Senate Finance Committee Chairman Chuck Grassley