Sanders' Big Spending Plans Would Reinvent the U.S.
Policy + Politics

Sanders' Big Spending Plans Would Reinvent the U.S.

Facing the juggernaut of a campaign being mounted by former Secretary of State Hillary Clinton, few experts in U.S. politics give Vermont Senator Bernie Sanders a much chance of seriously challenging Clinton for the Democratic nomination. In fact, it took a certain amount of audacity for Sanders, an avowed socialist, to even enter the race. 

However, Bernie Sanders is nothing if not audacious, as his myriad policy proposals show. Sanders is working hard to pull the Clinton campaign to the left with proposals, most of which involve spending a lot of money, that Clinton will have to respond to.  

Related: The Pros and Cons of Bernie Sanders; $50 Billion Tax Idea 

In fact, top Republicans are already speaking of Sanders and Clinton in the same breath, tying the front-runner to the insurgent’s expansive view of the federal government. 

Appearing on “Face the Nation” Sunday, House Speaker John Boehner (R-OH) said Sanders and Clinton are both "out of step with mainstream America. There's no limit to the number of taxes that Bernie Sanders and Hillary Clinton want to raise. There is no limit to the amount of new government they want to create. And I don't think that's where the American people want this government to go. They're tired of these big-government solutions. Republicans believe in empowering people so that they can pursue their own American dream.” 

Allies on the left contend that Sanders’ proposals are affordable and can be funded by targeted tax increases that fall largely on the wealthy and on businesses. 

“I’d say that while the Sanders spending proposals are certainly ambitious, there are a range of progressive tax increases that he has historically supported that have the potential to raise lots of money,” said Josh Bivens, director of research and policy at the Economic Policy Institute, which has worked with Sanders on one of his proposals. 

Related: Clinton Hits a Few Softballs, Dodges Fastballs in First Interview 

Some of the areas Sanders is targeting include: 

Sanders would eliminate tuition for the roughly seven million undergraduates at four-year public colleges and universities, where costs have risen significantly since the 1970s. Currently, total tuition at public colleges and universities amounts to about $70 billion a year and climbing. Under his plan, the federal government would spend $47 billion a year to states to eliminate undergraduate tuition and fees, while the states would pick up the remaining $23 billion. In order to participate in the program, states would have to meet a number of requirements designed to protect students, ensure quality and reduce ballooning costs. 

The legislation would be fully paid for by imposition of a federal “speculation fee” on Wall Street investment houses, hedge fund and other speculators of 0.5 percent on stock trades, a 0.1 percent fee on bonds and a 0.005 percent fee on derivatives.  Some have estimated this provision could raise hundreds of billions annually which could be used to create millions of jobs as well as subsidize college tuition. 

However, it’s in details like this where sometimes Sanders’ proposals run into trouble. While some have, indeed, suggested that the potential revenue from taxing financial markets activity is vast, others disagree. The Tax Policy Center last month examined the prospects of a Financial Transaction Tax and determined that, under a best case scenario, it could raise $50 billion per year and would likely raise less. 

Sanders has also proposed a major infrastructure stimulus program that would generate 13 million new jobs by spending $1 trillion to improve or rebuild roads, bridges and other transit systems over the next five years. Sander’s so-called “Rebuild America Act” is meant to supplement the existing federal highway program, with annual expenditures of about $148 billion on top of the current $50 billion a year in highway spending. 

Related: Sanders Shows Some Mojo as He Moves Up on Clinton in Iowa 

Sanders has vigorously championed the idea as part of his plan to battle income inequality and create more jobs for lower- and middle-income workers. His bill makes targeted investments in roads, bridges, transit, passenger and freight rail, water infrastructure, marine ports and inland waterways, national parks, broadband and the electric grid. 

Once again, he shuns the idea of budget cuts in other areas to offset the cost of his program. Instead, he would raise the revenue by closing tax loopholes that enable corporations to park profits overseas and by overhauling taxes on inheritances and the oil, gas and coal industries. 

It’s tricky to make the numbers work here unless you imagine half the Republicans in Congress wake up the day after President Sanders is inaugurated and declare that they are now Democrats. Estate taxes and treatment of the fossil fuel industry are two of the biggest flashpoints between the parties. And the likelihood of the Republicans in Congress changing overseas tax laws to orchestrate a windfall for federal spending is vanishingly small. 

Youth Unemployment
Calling unemployment among young Americans as a national tragedy, Sanders would create a $5.5 billion fund with $4 billion earmarked for job placement of people between the age of 16 and 24 and $1.5 billion for job training grants. Sanders says it makes far more sense to invest in employment opportunities for young people than continue to spend $70 billion a year on correctional facilities to house young convicts. 

Related: Where Clinton, Sanders, and O’Malley Stand on the Issues 

The Department of Labor would provide $4 billion in grants to provide summer and year-round employment opportunities for low-income youth. Another $1.5 billion would be allotted for competitive grants for work-based training programs. The measure also would provide training for hundreds of thousands of young Americans who in many cases have finished high school but have no prospects for college or other training and no job opportunities 

Curiously, Sanders does not say how he would pay for the program, which is among the smallest he is proposing. 

Health Care
Sanders has backed the Affordable Care Act, but also favors adopting a  “Medicare-for-all” single-payer system that guarantees health care to all Americans as a right. He would pay for the program with a higher payroll tax paid by employers and a progressive “health care income tax” that would hit those earning more than $600,000 the most. 

Sanders’ home state of Vermont flirted with the idea of adopting a statewide single-payer health care system, but abandoned the effort last December after Gov. Peter Shumlin conceded that he couldn’t come up with a way to pay for it without hurting the state’s economy. The plan had called for a 11.5 percent payroll assessments on businesses and sliding premiums up to 9.5 percent of individuals’ income. 

Related: Suring Sanders May Face Surprise Hurdle in New Hampshire 

Many of Sanders’ positions are, in effect, symbolic. He may well believe in them but they stand little chance of ever becoming the official policy of the U.S. government. Like Sanders’ campaign itself, his proposals are more about sending a message. 

On “Face the Nation,” Sanders continued hammering that message home. 

“People are saying, enough is enough,” he said. “That is not what this country is supposed to be about. We want to be able to send our kids to college, we want to be able to have decent child care, we don't want to be the only major nation on earth that doesn't guarantee family and medical leave … We want a government that starts representing working families, and not just wealthy campaign donors, which is what we have right now. And I think that's a message that is resonating all across the country.” 

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