Mass amnesty, trillions in Medicare spending, and publicly funded abortion are just some of the ideas in a set of policy proposals that a left-leaning policy group gave to Democratic bigwigs this past week.
These and other proposals were provided to Democratic taste-makers, and obtained by the Free Beacon, at the 2018 Democracy Alliance fall conference held this week in Atlanta. Attendees received copies of Everyone's Economy, a report from left-leaning public policy organization Demos. The organization is chaired by Amelia Warren Tyagi, daughter of Sen. Elizabeth Warren (D., Mass.), and funded by liberal billionaire George Soros.
The brief's stated goal is to outline "an economic agenda that places both race and class at the forefront," while responding to the populist appeals of President Donald Trump. Many of its proposals conspicuously benefit Democratic constituencies, with questionable gain for or outright harm to others.
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Central to Demos's policy priorities is a massive expansion of federal welfare spending. Everyone's Economy explicitly backs Sen. Bernie Sanders's (I., Vt.) Medicare for All plan, which is slated to cost $1.4 trillion per year. Demos claims it can save $476 billion by cutting "administrative waste" from private insurers and a further $116 billion by allowing Medicare to negotiate drug prices directly.
Demos would also expand federal welfare programs such as SNAP and TANF, even as their rolls are already overextended. And it would increase Social Security spending by more than $48 billion per year by adding a benefit increase of $65 per person per month.
All of this spending would contribute to an already-enormous welfare state. Economist Nicholas Eberstadt has estimated government transfer payments, now in the trillions annually, have expanded twelve times over since 1960, eclipsing all other government spending. Analyst Brian Riedl determined the entirety of the $82 trillion deficit America is projected to accrue, "comes from the Social Security and Medicare shortfalls and their resulting interest costs."
Demos's Medicare for All proposal provides services regardless of citizenship status, meaning America's 11 million illegal immigrants might receive federally funded coverage. That would not be the only benefit to that group, however. Everyone's Economy calls for immediate legal status for illegal immigrants, with an eight-year path to citizenship. It would also remove legal barriers to reentry upon deportation, and pass a "clean" DREAM Act, all "without compromising on aggressive enforcement or ‘border security.'" 61 percent of Americans believe current border security is "inadequate."
Demos also backs ending any federal agreement with local and state authorities to detain illegal immigrants: in other words, a nation-wide sanctuary city policy. It would further support mandating defense counsel in all civil proceedings (under current law, defense counsel is only required in criminal proceedings). In practice, that would mean every deportation proceeding becoming an intractable legal battle, contributing to the enormous immigration court backlog.
Many economists think low-skilled immigration actively reduces the wages of low-skilled Americans, a fact not accounted for in Everyone's Economy labor proposals. Considered instead is a recently popular far-left proposal: a federal jobs guarantee. Floated by left-leaning groups like the Center for American Progress and the Center on Budget and Policy Priorities, a jobs guarantee would make the government the "employer of last resort," providing employment to "anyone who applies with demonstrated need."
Demos admits the project would cost around $750 billion annually, but contends that would be made up for with additional tax revenue and reduced safety net enrollment, though it did not explain how taxing wages paid by the government would increase tax revenue. Prominent left-leaning policy analyst Matt Bruenig has questioned a jobs guarantee, especially for its proponents' inability to pin down where, exactly, jobs would come from.
A job guarantee is not the only proposal that would notably alter the labor market. Like other left-leaning organizations, Demos backed a $15 federal minimum wage, currently $7.25. It also proposes raising the minimum wage for tipped workers to $15 (currently $2.13).
Economists argue increasing the minimum wage will exclude young, elderly, low-skilled, and disabled workers from the market, whose labor is valued below that wage level. A majority of a panel of economists interviewed by the University of Chicago either thought the $15 minimum wage would raise the low-skill unemployment rate or were at least unsure of its effect.
Demos would also like to see the end of right-to-work laws, presumably over the objections of the 71 percent of Americans who supported them as of 2014. Public employee unions, which are overwhelming supporters of liberal groups and Democrats, would be strengthened under Demos’s plan, to the detriment of students and taxpayers. Demos’s labor union funders, including the SEIU and UFCW, would benefit from the dues they would by law receive.
Young people, who consistently lean left, are a further target of Demos's largesse. Everyone's Economy calls for free community college nationwide, and free state college for anyone whose family earns under $125,000 per year. A similar plan from Sanders's presidential campaign was projected to cost approximately $75 billion per year. Federal Pell Grants would also be substantially expanded, even though a Federal Reserve study showed that Pell Grants likely drove the well-above-inflation increase in the cost of college over the past three decades.
Cheaper college may unintentionally exacerbate the already overwhelming student debt crisis. Americans currently have about $1.4 trillion in outstanding student debt, the overwhelming majority of which is held by the federal government. Demos's plan would provide debt relief and allow students to discharge their debt in bankruptcy proceedings, but fails to analyze how this change and its concurrent effect on the government's balance sheet would impact the economy. Analysts have already called the student debt bubble "dangerous," comparing it to the glut of mortgage debt held by the government which precipitated the Great Recession.
The trillions of dollars Demos proposes to spend will of course be compensated for by a slate of new taxes. Everyone's Economy calls for an increase in the estate tax; taxes on individuals making over $1 million annually and an expanded capital gains tax; a roll back of the Republicans' historic corporate tax cut; and imposing Sanders’s beloved financial transaction tax.
While happy to bring the tax hammer down on the wealthy and corporations, Demos's proposals roll back a tax reform that affected blue states' tax base. Everyone's Economy would bring back the SALT deduction, which allows individuals to deduct their state and local tax burdens from their federal income taxes. The states which most frequently took advantage of the SALT deduction were reliably Democratic strongholds; the Sacramento Bee estimated that the end of SALT will cost Californians $12 billion in 2019.
Lastly, Demos proposes to repeal the Hyde Amendment, which prohibits federal funding of abortion, and which if repealed would potentially provide government funds to millions of women seeking abortions. Everyone's Economy would instead implement abortion coverage through Medicaid and "champion legislation that limits religious and so-called moral carve-outs for employers."