If Kamala Harris supports the programs she supported the first time she ran for president, the federal budget is in even more trouble than it already is.
Harris went big during her failed campaign for president in 2020, blowing through $40 million despite dropping out before the first primary election was held. Her policy positions demonstrated a similar level of fiscal discipline.
For instance, she co-sponsored the socialist health-care bill from Senator Bernie Sanders (I., Vt.) branded “Medicare for All,” which the left-leaning Urban Institute projected would cost $34 trillion over ten years.
As senator, Harris also introduced legislation for a refundable tax credit of up to $3,000 per year for low- and middle-income families, with the exact amount subject to income constraints. That would be on top of, not in place of, all the existing welfare programs and tax credits for families. The Tax Foundation estimated that the new tax credit would cost $2.7 trillion over ten years.
She wanted people to receive $2,000 per month from the federal government for the entire pandemic-emergency period. That proposal would have cost $21 trillion over just three years.
While, even under the rosiest scenarios for Democrats, congressional majorities are unlikely to be large enough to support a mammoth overhaul of the health-care system that would push 180 million people out of their private insurance plans, Axios reported on Wednesday that Harris plans to pursue “parts of Joe Biden’s domestic agenda that never made it across the finish line.” At various points of the “Build Back Better” debate, the price tag of that agenda was said to be as high as $6 trillion. Harris wants universal pre-K and more federal spending on elderly care and child care. She said she wants every person to have paid family leave.
Biden promised to not raise taxes on anyone making less than $400,000 per year, which is 98 percent of taxpayers. Harris has not said whether she will keep that pledge. If she does, her campaign is promising European levels of welfare programs without European levels of middle-class taxation. That means massive deficits.
Harris has said she supports a huge increase in the corporate tax, from 21 percent to 35 percent, that would again make the American rate the highest in the developed world. For individuals, she wanted to increase the top marginal tax rate to 39.6 percent and tax capital gains, at least for some taxpayers, at the same rate as ordinary income. She also has supported financial-transactions taxes and expanding the estate tax. These tax increases would not come anywhere near raising the revenue her plans require, but they would do a lot to slow economic growth by reducing investment.
Under the “Biden-Harris administration” — and don’t let the Left erase that constant branding the administration has used for years — the national debt is growing even faster than the already massive gap between revenue and spending that was expected. The Congressional Budget Office revised its deficit estimate upward by $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-point list that’s passing as the Republican Party’s platform this year canonizes that irresponsibility, promising “large tax cuts” in tandem with no cuts to Social Security or Medicare, the entitlement programs that are driving the debt. The platform’s promise to “rein in wasteful spending” includes no details on how that would actually happen.
Yet it remains the case that there is no tax-cut package Republicans could propose that would cost $21 trillion over three years, because the federal government only takes in about $4.5 trillion in annual revenue. It’s difficult to conceive of 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.
It would behoove Republicans to take advantage of Harris’s fiscal recklessness by proposing a real spending-reform agenda that gives the voters a clear choice between spiraling deficits and basic decency. The federal government’s continued deficit spending, 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.
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