Category: Uncategorized

Ritz for Forbes: “Four Days Before Iowa, Which Democrats’ Promises Add Up?”

Posted on by The Progressive Policy Institute

The leading Democratic candidates for president have each made dozens of policy promises to voters over the past year as they campaigned for the opportunity to challenge President Trump in November. With the Iowa caucuses taking place next week, now is the right time to evaluate how these proposals add up: which candidates have given voters a credible agenda for enacting progressive change, and which have not? Although all four of the top-polling candidates offer a dramatic departure from the Trump administration’s agenda of cutting taxes for the rich, slashing public investment, and undermining health-care coverage for millions of Americans, a new analysis from the Progressive Policy Institute’s Center for Funding America’s Future finds that some are more credible than others.

PPI’s analysis determined both how candidates would pay for their new spending proposals and what proportion of those proposals were dedicated to investments in education, infrastructure, and scientific research that lay the foundation for long-term economic growth. Real federal spending on these public investments has fallen by more than 40 percent since the 1970s, and absent a dramatic course correction, the federal government will soon be spending more than twice as much on interest payments as it does on all three of these priorities combined. A credible progressive agenda would pair robust public investment with the fiscal foresight to secure those investments for generations.

Read the full analysis here.

Press Release: How The Democratic Presidential Candidates Would Fund America’s Future

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE

January 30, 2020

Contact: media@ppionline.org or 202-525-3931

How The Democratic Presidential Candidates Would Fund America’s Future

 

WASHINGTON— Just days before the crucial Iowa caucuses on Monday, February 3rd, the Progressive Policy Institute’s Center for Funding America’s Future has released a comprehensive new analysis of the top four candidates’ campaign proposals and how they would finance their agendas.

 

“If a Democrat beats Donald Trump in November, he or she will inherit a federal budget that under-invests in America’s future while running trillion-dollar deficits as far as the eye can see,” said PPI’s Director of the Center for Funding America’s Future, Ben Ritz. “PPI’s analysis shows which of the leading Democratic candidates have given voters a credible agenda for enacting progressive change and which are selling fiscal fantasies.”

KEY REPORT INFORMATION:

  • This report is (to our knowledge) the first comprehensive, apples-to-apples comparison of all the proposals leading candidates have offered during the 2020 campaign.
  • PPI’s analysis not only looks at how candidates would pay for their new spending proposals but also what proportion of these proposals are dedicated to public investments that lay the foundation for long-term economic growth.
  • As Democrats begin selecting their party’s nominee for president with the Iowa caucuses on Monday, voters deserve to know what policies each candidate prioritizes and how they would finance their agendas.

HIGHLIGHTS ON EACH CANDIDATE:

  • Sen. Bernie Sanders has proposed over $51 trillion of new spending over the next 10 years, more than $25 trillion of which he has offered no plans to pay for – a gap that’s greater than the value of all goods and services produced by the U.S. economy each year.
  • Sen. Elizabeth Warren has proposed increasing spending by $8.3 trillion more than she’s proposed raising in revenue – a gap that will be difficult to close without breaking her commitment not to raise taxes on the middle class given the number of taxes on high-income people she has already embraced.
  • Mayor Pete Buttigieg has proposed almost $200 billion more in offsets than he has in new spending, making him the only candidate PPI examined to have already offered a complete plan for funding the entirety of his agenda.
  • Vice President Joe Biden commits more than half of his new spending proposals to public investments in infrastructure, education, and scientific research – the highest proportion of any candidate PPI analyzed.

Ritz lauded two of the candidates examined in the report saying, “Biden and Buttigieg should be commended, not just for limiting deficits, but also for making investments in education, infrastructure, and scientific research a priority in their spending plans. These critical public investments are the foundation for long-term economic growth and have been neglected by policymakers in Washington for far too long.”

“PPI’s examination of the candidates’ spending plans show that Sens. Sanders and Warren are in a category of their own when it comes to expansive government. In particular, Sanders’ gigantic, $50 trillion spending surge makes Franklin Roosevelt look like Calvin Coolidge,” said PPI President Will Marshall.

All four leading Democratic candidates for president would offer a dramatic departure from the Trump administration’s agenda of cutting taxes for the rich, slashing public investment, and undermining health-care coverage for millions of Americans.

Please click here to read the full report before the upcoming Iowa caucuses.

A column summarizing the analysis can be found here on Forbes.com.

###

The Progressive Policy Institute is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock.

Founded in 1989, PPI started as the intellectual home of the New Democrats and earned a reputation as President Bill Clinton’s “idea mill.” Many of its mold-breaking ideas have been translated into public policy and law and have influenced international efforts to modernize progressive politics.

Today, PPI is developing fresh proposals for stimulating U.S. economic innovation and growth; equipping all Americans with the skills and assets that social mobility in the knowledge economy requires; modernizing an overly bureaucratic and centralized public sector; and defending liberal democracy in a dangerous world.

Contact: media@ppionline.org or 202-525-3931

How The Democratic Presidential Candidates Would Fund America’s Future

Posted on by The Progressive Policy Institute

As Democrats begin selecting their party’s nominee for president with the Iowa caucuses next week, voters deserve to know what policies each candidate prioritizes and how they would finance their agendas. PPI’s Center for Funding America’s Future has compiled a comprehensive review of tax and spending proposals offered by four leading presidential candidates to help guide voters: Sen. Bernie Sanders, Sen. Elizabeth Warren, Mayor Pete Buttigieg, and Vice President Joe Biden.

 

This analysis breaks down how much each candidate proposes to increase spending on long-term public investment and present consumption. PPI also separates out additional spending on children and climate mitigation policies that many consider investments in the future even if they don’t clearly fall into the traditional public-investment categories of education, infrastructure, and scientific research. Finally, this analysis shows how candidates have proposed to pay for their preferred spending increases, enabling voters to understand the scope and credibility of candidates’ campaign promises.

If a Democrat unseats President Trump in November, he or she will inherit an enormous fiscal mess. The federal government is now spending $1 trillion more than it raises in revenue each year – a gap that will only grow worse as our aging population increases the costs of federal health care and retirement programs faster than the taxes needed to finance them. The shortfalls were exacerbated by nearly $5 trillion of unpaid-for tax cuts and spending increases enacted during the first three years of Trump’s presidency. According to the latest projections from the non-partisan Congressional Budget Office, our national debt is on track to reach record-high levels as a percent of gross domestic product by 2030. Meanwhile, real federal spending on public investments in education, infrastructure, and scientific research that lay the foundation for long-term economic growth has fallen by more than 40 percent since the 1970s. Absent a dramatic course correction, the federal government will soon be spending more than twice as much on interest payments as it does on all three of these critical public investments combined.

All four leading Democratic candidates for president would offer a dramatic departure from the Trump administration’s agenda of cutting taxes for the rich, slashing public investment, and undermining health-care coverage for millions of Americans. PPI finds that each candidate would increase both revenue and spending, albeit by different orders of magnitude. Sanders and Warren each propose increasing spending – particularly on present consumption – by tens of trillions of dollars, and would likely have trouble finding enough revenue sources to pay for their expensive agendas without exacerbating the enormous budget problems America already faces. Warren proposes over $8 trillion more in new spending than in new revenue over the next decade, while the Sanders shortfall is over $25 trillion – more than the total value of all goods and services produced by the U.S. economy in a year. Biden and Buttigieg, on the other hand, propose targeted spending increases that prioritize public investment and are easier to finance. Biden has proposed just $1.8 trillion more in new spending than he has in revenue increases, while Buttigieg is the lone candidate to have already offered a complete plan for funding the entirety of his agenda.

The cost or revenue effects of many policies vary considerably with assumptions, and it is likely that candidates will continue to release more details as the campaign unfolds. The figures in this analysis reflect PPI’s best estimates of the fiscal impact of the candidates’ proposals based on details that the campaigns made public prior to the date of publication. PPI also incorporated independent estimates from reliable sources, including the Committee for a Responsible Federal Budget, Congressional Budget Office, Tax Policy Center, Social Security Administration, Penn Wharton Budget Model, and various media reports. This analysis measures changes in projected revenue and spending from 2021-2030 relative to current law and assumes for illustrative purposes that a candidate’s policies are enacted immediately upon taking office. Most scores do not include the effects of interactions between multiple policies, and none include macroeconomic effects or the additional interest costs incurred from increasing federal budget deficits.

PPI also reviewed proposals by former Mayor Michael Bloomberg and Sen. Amy Klobuchar, but there wasn’t enough information made public by the campaigns and independent analysts to develop comprehensive scores that could be fairly compared to the other candidates covered by this analysis. All candidates should continue to explain how they will pay for their spending priorities, address the nation’s current fiscal challenges, and grow America’s economy.

Senator Bernie Sanders

Sanders has proposed just over $50 trillion in new spending, the largest component of which is his $24.4 trillion Medicare-for-All plan. Sanders embraces a suite of aggressive tax increases and lays out a broad “menu of options” to finance Medicare for All, but even if all of these policies were adopted, they would fall $25.3 trillion short of what Sanders has proposed in new spending. Another costly proposal is his $16.3 trillion “Green New Deal,” which includes a federal jobs guarantee that could seriously harm the economy by pulling workers away from gainful employment in the private sector while doing nothing to stem greenhouse-gas emissions. Sanders proposes more spending on higher education than his competitors, but the majority of it is for universal debt forgiveness that would give even high-income professionals a windfall without increasing the productivity of America’s workforce. Although Sanders proposes the biggest increase in dollars for public investment of any presidential candidate, it is fiscal fantasy to believe he could ever deliver on it given his non-investment spending priorities and failure to develop sufficient revenue proposals.

Senator Elizabeth Warren

Warren has proposed $34.9 trillion of new spending to date – less than Sanders, but still nearly five times as much as the what the next highest-spending candidate (Buttigieg) proposes to spend. Her most-expensive initiatives include a $22.5 trillion Medicare-for-All framework, a $3.9 trillion plan to tackle climate change, and $3.6 trillion for investments in education and student-debt forgiveness. Warren also proposes to increase Social Security benefits by far more than any other candidate, including for wealthy retirees. She proposes more new spending for research and educating low-income students than any of her competitors, but these proposals are dwarfed by new consumption spending that by itself exceeds the total revenue raised from Warren’s proposed offsets. Given the large taxes on high-income people she has already embraced, Warren’s agenda leaves little room to raise enough taxes to close the $8.3 trillion gap between her proposed spending and revenue (let alone address existing fiscal needs) without breaking her commitment not to raise taxes on the middle class.

Mayor Pete Buttigieg

Buttigieg proposes $7.6 trillion in new spending, most of which comes from his $2 trillion commitment to combat climate change and invest in infrastructure, his $1.4 trillion investments in child care and K-12 education, and his $1.3 trillion health-care plan. Buttigieg’s proposals to expand Social Security would increase spending by the least of these four candidates relative to his proposed tax increases, meaning he would do the most to strengthen its solvency for future generations. Although Buttigieg proposes to spend roughly $1.7 trillion more than Biden, he has also proposed raising over $3.7 trillion more in revenue than Biden has to date (mostly from higher taxes on businesses and wealthy individuals). The result is that Buttigieg has proposed over $200 billion more in offsets than he has in new spending, making him the only candidate PPI examined to have already offered a complete plan for funding the entirety of his agenda.

Vice President Joe Biden

At $5.9 trillion, Biden proposes the least new spending of the four candidates PPI examined (though still significantly more than recent Democratic nominees for president). Most of his new spending comes from a $1.7 trillion plan to combat climate change, which appears to be comprised entirely of investments in scientific research and infrastructure, $1.5 trillion of investments in education from pre-kindergarten through college, and his $1.5 trillion healthcare plan. Biden commits more than half of his new spending increases to investments in infrastructure, education, and scientific research – the highest proportion of any candidate. But this analysis may yet understate Biden’s commitment to increasing public investment, as he has not released a scoreable proposal for increasing medical research spending despite saying it is among his highest priorities. Biden has yet to fully articulate how he would pay for his new spending priorities: according to PPI’s estimates, he has proposed $1.8 trillion more in new spending than he’s proposed in new revenue to pay for it. But unlike Sanders and Warren, Biden fully finances his non-investment spending proposals and still has plenty of realistic and reasonable policy options available to both pay for his other priorities and reduce the trillion-dollar deficits he would inherit from the Trump administration.

 

Ritz for Forbes: “New CBO Report Projects $13 Trillion Deficit Over 10 Years”

Posted on by The Progressive Policy Institute

Projections published today by the non-partisan Congressional Budget Office confirm that the federal government is on course to spend $1 trillion more than it raises in revenue in Fiscal Year 2020. Trillion-dollar deficits continue as far as the eye can see, with CBO estimating a 10-year deficit of over $13 trillion.

Legislative changes since August have increased projected deficits by more than $500 billion, according to CBO. More than 90 percent of the increase comes from a package of irresponsible tax cuts added to a year-end spending agreement passed in December. But most of the change was offset by a decline in the projected interest rates and other technical changes, leaving 10-year deficit forecasts “only” $160 billion more than they were in August 2019.

What’s driving these deficits? Primarily the growth in federal health-care and retirement programs caused by our ageing population. Federal spending on Social Security, Medicare, and other health programs is projected to grow from 11 percent of gross domestic product today to 14 percent in 2030. All other non-interest spending, meanwhile, is projected to shrink as a percentage of GDP. Revenue won’t keep up with these costs, in large part because the Trump administration keeps charging tax cuts upon tax cuts to the national credit card. If anything, CBO’s projections are overly optimistic because the agency is required to assume most of these tax cuts expire in 2025 as they are scheduled to under current law.

Read the full piece here.

Ritz for Forbes: “What Bernie Sanders Isn’t Telling You About Social Security”

Posted on by The Progressive Policy Institute

In recent days, Sen. Bernie Sanders and his campaign surrogates have accused former Vice President Joe Biden of being dishonest about his views on Social Security. Although much has been written about Biden’s position, far less scrutiny has been applied to what Sanders proposes to do with the nation’s largest federal spending program. That’s a problem, because Sanders’ agenda isn’t honest about Social Security’s financial condition and would gravely harm the young voters powering his presidential campaign if enacted.

Here are the facts: both Biden and Sanders, as well as nearly every other Democrat running for president in 2020, have proposed to expand Social Security benefits during the campaign. Nobody is championing benefit cuts in this election. The only real difference among the candidates’ proposals is for whom benefits would be expanded. Biden has targeted his benefit expansions to low-wage workers and window(ers), two groups of older Americans that are statistically more likely to be left in poverty by our retirement system. These are the folks who need Social Security the most. Sanders, meanwhile, has proposed across-the-board benefit increases that would increase benefits for even the wealthiest retirees regardless of need.

Unfortunately, no one is talking about the elephant in the room: Social Security doesn’t even have the capacity to pay out the benefits already scheduled. Every year since 2010, the program has spent more money on benefits than it has raised in payroll taxes.  The U.S. Treasury is currently covering that shortfall, because it borrowed from previous surpluses and is now paying that debt back. But once those funds are exhausted in 2035, Social Security would be legally required to cut benefits across the board by roughly 20 percent. Even Sanders has acknowledged the program has “been adjusted before, and adjustments will have to be made again.”

Read the full piece here.

Osborne, Pankovits for The 74: “In Camden, N.J., Portfolio Schools, an Important School Board Election and a Commitment to Continued Reform”

Posted on by The Progressive Policy Institute

With 55 percent of its students in chartered public schools or renaissance schools — neighborhood schools operated by charter organizations — Camden, New Jersey, has implemented one of the most ambitious portfolio strategies in the nation in recent years. It has done so under state control, but New Jersey will probably return power to an elected school board within the next few years. So November’s elections for an advisory school board, the first since state intervention, were an important barometer of local sentiment.

Of the three seats up for grabs, two were won by candidates who support the renaissance and charter schools. The third went to a candidate endorsed by the local teachers union, which ran candidates for all three seats. All three new members were sworn in Jan. 3.

With 75,000 people, Camden is one of the poorest cities in America. At the time of the state intervention in 2013, the Camden City School District was suffering from more than two decades of poor results, financial mismanagement, systemic inequity and grade-fixing scandals. Even though the district spends almost double the national per-pupil average, some 23 of the city’s 26 public schools scored in the bottom 5 percent of schools in New Jersey. Fewer than half of students were graduating from high school, and even fewer were proficient in reading and math in elementary and middle school. With half of the district’s buildings constructed before 1928, students attended crumbling schools, some of which even lacked running water.

Read the full analysis here.

Osborne & Pankovits: In Camden, N.J., Portfolio Schools, an Important School Board Election and a Commitment to Continued Reform

Posted on by The Progressive Policy Institute

With 55 percent of its students in chartered public schools or renaissance schools — neighborhood schools operated by charter organizations — Camden, New Jersey, has implemented one of the most ambitious portfolio strategies in the nation in recent years. It has done so under state control, but New Jersey will probably return power to an elected school board within the next few years. So November’s elections for an advisory school board, the first since state intervention, were an important barometer of local sentiment.

Of the three seats up for grabs, two were won by candidates who support the renaissance and charter schools. The third went to a candidate endorsed by the local teachers union, which ran candidates for all three seats. All three new members were sworn in Jan. 3.

With 75,000 people, Camden is one of the poorest cities in America. At the time of the state intervention in 2013, the Camden City School District was suffering from more than two decades of poor results, financial mismanagement, systemic inequity and grade-fixing scandals. Even though the district spends almost double the national per-pupil average, some 23 of the city’s 26 public schools scored in the bottom 5 percent of schools in New Jersey. Fewer than half of students were graduating from high school, and even fewer were proficient in reading and math in elementary and middle school. With half of the district’s buildings constructed before 1928, students attended crumbling schools, some of which even lacked running water.

Read more here.

Ritz for Forbes: “Democrats Finally Debated The Deficit. What Did They Say?”

Posted on by The Progressive Policy Institute

Two days ago, I noted there had been little mention in the Democratic debates of the trillion-dollar deficits being run up by the Trump administration. That discussion finally started last night after moderator Abby Phillip asked Sen. Bernie Sanders how he would finance his proposals to double existing federal spending. Several candidates weighed in, offering insight into how their management of the federal budget would differ from one another, as well as with President Trump.

Sanders rejected the premise of the question and insisted that his Medicare-for-All plan would actually reduce total health-care spending in the United States. The reality, however, is that – despite embracing almost every tax hike imaginable – Sanders hasn’t come up with a credible plan to finance even half of the more than $50 trillion in additional spending he’s proposed over the next 10 years. Sen. Elizabeth Warren, who has made enacting a federal wealth tax one of the central pillars of her campaign, said that some of the revenue from this tax could be used to pay down the growing national debt.

The problem here is that Warren – like Sanders – has already pre-committed every dollar of her wealth tax (and other revenue proposals) to new spending. Major federal programs, including Social Security and Medicare, are facing growing shortfalls due to our ageing population and the Trump administration’s reckless tax-cut and spending policies. As a result, the next president will likely inherit a 10-year deficit of almost $17 trillion. How could Warren or Sanders hope to pay for the promises our government is already making after they’ve tapped every revenue source they conceivably can to pay for new spending?

Read the full piece here.

Press Release: The Slowdown in American Entrepreneurship: “How Would a Democratic President Respond – And What Should Be Done?”

Posted on by The Progressive Policy Institute

WASHINGTON— Ahead of tonight’s Democratic Debate in Des Moines, Iowa, the Progressive Policy Institute released a new report on the troubling outlook for entrepreneurship in the United States, according to PPI Director of Policy Innovation Dane Stangler.

“Despite the continued macroeconomic expansion, there are worrying sub-surface trends,” Stangler said in Real Clear Markets. “Not potential signs of recession in the near future—but signs of potential economic erosion, threatening prosperity over the next several years.”

The report released today highlights Democratic candidates’ views on entrepreneurship, ideas, and innovation in the modern political era. A growing body of academic research has established a consistent set of empirical facts about the fall in rates of entrepreneurship and other indicators of declining dynamism:

  • The entry rate of new firms has fallen steadily, which has created an “accumulating startup deficit.”
  • There are fewer high-growth firms than 20 years ago—and their rates of growth have declined. In the terms of economists, “skewness” in firm growth has fallen.
  • These trends—falling firm entry and employment creation by high-growth firms— have been especially pronounced in the high-tech sector since 2000.
  • The overall population of U.S. businesses has grown “older and slower.”
  • Other measures of dynamism—job mobility, geographic mobility, and “job reallocation”— have also fallen.

The report highlights a number of potential proposals for Democratic candidates to adopt heading into 2020, and calls for candidates to add focus on innovative, entrepreneurial thinking to combat the decline in entrepreneurship and business dynamism in the Trump era.

“Democratic candidates—particularly those who have dominated headlines—need to put greater energy into addressing the importance of business creation,” said Stangler in the PPI report. “Acknowledging the slowdown in business creation is a start. Discussing this or that program to help is a positive step. Celebrating entrepreneurs and underscoring the urgent need to address the concerning trends in dynamism would be even better.”

Please click here to read the full report before tonight’s debate and the upcoming Iowa caucuses.

###

The Progressive Policy Institute is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock.

Founded in 1989, PPI started as the intellectual home of the New Democrats and earned a reputation as President Bill Clinton’s “idea mill.” Many of its mold-breaking ideas have been translated into public policy and law and have influenced international efforts to modernize progressive politics.

Today, PPI is developing fresh proposals for stimulating U.S. economic innovation and growth; equipping all Americans with the skills and assets that social mobility in the knowledge economy requires; modernizing an overly bureaucratic and centralized public sector; and defending liberal democracy in a dangerous world.

Marshall for The Hill: “Pragmatic Democrats find their voice”

Posted on by The Progressive Policy Institute

Six Democrats running for president – a skeleton crew by campaign 2020 standards – will gather in Des Moines tonight to make closing arguments. It’s the last debate before the February 3 Iowa caucuses, when Democratic voters finally get a chance to cut through the fog of polls and punditry and start picking the party’s nominee.

The shrunken cast also will feature ideological parity, with former Vice President Joe Biden, Sen. Amy Klobuchar (D-Minn.) and former South Bend Mayor Pete Buttigieg representing the party’s quiet but large pragmatic wing, and Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) and investor and activist Tom Steyer holding down the progressive left. Polls show the moderate and left-leaning candidates drawing support from about 37 percent of Iowa voters.

Could this signal an important turn in a debate thus far dominated by the passions and preoccupations of left-wing activists? Biden’s staying power, Buttigieg’s impressive leap from nowhere into the top tier and Klobuchar’s growing momentum in Iowa are all signs that mainstream Democrats are finding their voice.

Read the full piece here.

The Slowdown in American Entrepreneurship: How Would a Democratic President Respond – And What Should Be Done?

Posted on by The Progressive Policy Institute

In the November debate among Democratic presidential candidates, Sen. Cory Booker said the following: We Democrats also have to talk about how to grow wealth, as well. … [W]e as Democrats have got to start talking not just about how we tax from a stage, but how we growth wealth in this country amongst those disadvantaged communities that are not seeing it. … Small businesses, new startups are going down in this country. … We need to give more new entrepreneurs access to wealth.

What was notable about these statements was not so much the substance of what Booker said but that he said anything at all about entrepreneurship. During that debate, the word “entrepreneur” was only mentioned twice, both by Sen. Booker, who has since droped out. In fact, the word “business” was only spoken five times by the candidates on stage. Two of those were Booker talking about actual business creation. Others were in the context of assertions about “business as usual” in Washington. (Tom Steyer did mention his business experience.)

During the December debate, entrepreneurship was mentioned roughly zero times. The sole mention of business creation was by Sen. Elizabeth Warren in talking about her plan to erase most student loan debt. The only time the word “entrepreneurship” was actually uttered was when Andrew Yang talked about serving as “an ambassador of entrepreneurship” during the Obama administration. (And those mentions came toward the end of the night.)

Read and download the full report here,

Ritz for Forbes: “2019 Was Officially Trump’s First Trillion-Dollar Deficit. Will Democrats Debate It?”

Posted on by The Progressive Policy Institute

It’s official: the Trump administration spent $1 trillion more in 2019 than it raised in revenue. That deficit is 50% larger than the deficit in 2017, which was President Trump’s first year in office, and represents the first calendar-year deficit to top $1 trillion since 2012. Annual deficits will only grow worse in the coming decade, in large part thanks to the $2 trillion tax cut Trump signed into law in 2017 and a similarly-sized tax and spending deal he signed at the end of last year (over a quarter of which was added to the national debt).

With trillion-dollar annual deficits stretching into the future indefinitely, will Democrats address this generational challenge in their Presidential debate? There sure is an appetite for it: when I had the privilege of speaking with students at the New England College Convention in New Hampshire last week, they expressed deep concern about the rising national debt they’re poised to inherit and how the Democratic candidates would pay for their proposals.

Unfortunately, these issues haven’t been raised in any of the more than 500 questions asked throughout the last six presidential debates. The seventh debate on Tuesday night presents one last opportunity to change this dynamic before the Iowa Caucus.

Read the full piece here.

Discussing the Budget with Students at the New England College Convention

Posted on by The Progressive Policy Institute

Ben Ritz, the Director of PPI’s Center for Funding America’s Future, presented to students during two breakout sessions at the New England College Convention in Manchester, New Hampshire this week. The first session was a joint presentation about the national debt as an intergenerational issue with Bob Bixby from The Concord Coalition and Brian Riedl from the Manhattan Institute. The panelists spoke with local radio host Chase Hagaman about their presentation on his show, Facing the Future, which airs on New Hampshire’s WKXL station and can be found at the link below. Hagaman also moderated a second session in which Ben discussed with students the public investment proposals presented so far in the presidential campaign, how candidates would fund their agendas, and the impact these plans would have on young Americans.

Listen to the interview here.

Stangler for Medium: “The first Democratic debate of 2020 is next week: Guess what won’t be talked about?”

Posted on by The Progressive Policy Institute

The Democratic presidential field continues to be in flux, with Julian Castro dropping out and Michael Bloomberg ramping up his campaign. Participation in the January 14th debate is, as of yesterday, limited to just five candidates. Those five — Joe Biden, Amy Klobuchar, Elizabeth Warren, Pete Buttigieg, and Bernie Sanders — have hit the polling and donation thresholds to qualify.

The narrowing is unsurprising, but unfortunate in many respects. The biggest is that it means the debate likely won’t include much mention of one of the most important economic issues facing the country. What’s that?

Declining business creation and overall economic dynamism.

Read the full piece here.

Ritz for Forbes: “The Trillion-Dollar Question Missing From The Presidential Debate”

Posted on by The Progressive Policy Institute
Congress voted this week for a $1.9 trillion tax and spending deal, over a quarter of which was added to our $23 trillion national debt. Thanks to this and other fiscally irresponsible legislation signed into law by President Donald Trump, the federal government will run an annual budget deficit of over $1 trillion this year and every year that comes after it. Yet of over 500 questions asked throughout six presidential debates, not a single one has raised the issue.

 

Read the full piece on Forbes.

McDermott for Medium: “Buttigieg Is Right: Not Every Program Can Be Universal. So Which Should?”

Posted on by The Progressive Policy Institute

Read the piece on Medium.com. 

At last night’s Democratic presidential debate, South Bend Mayor Pete Buttigieg once again criticized Senators Warren and Sanders for proposing to provide free public college tuition to all students, even if they come from wealthy families. “Yes, we must deliver big ideas, and yes, taxes on wealthy individuals and on corporations are going to have to go up,” the Mayor said. “We can also be smart about the promises we’re making. Make sure they’re promises that we can keep, without the kind of taxation that economists tell us could hurt the economy…. If you’re in that top 10 percent, how about you pay your own tuition and we save those dollars for something else that would make a big difference.”

These comments follow a TV commercial in which Mayor Buttigieg argues that the benefits from any free public higher education program should be “means-tested,” or only provided to low- and/or middle- income people, because wealthy people have the means to pay for their children through college. Buttigieg is not the only candidate proposing to means-test certain benefits: Sen. Elizabeth Warren proposes means-testing benefits for her universal childcare and student debt relief plans, and both Sens. Warren and Sanders propose means-testing their aid aimed at students’ non-tuition costs. Still, critics claim that Mayor Buttigieg’s critiques of universal programs are unfair, as such programs can be more politically durable and easier to administer. Sen. Sanders also claimed that because he would pay for benefits for the wealthy with taxes on the wealthy, creating a universal program can still be economically progressive.

These points have some merit, and many fundamental government services — from Social Security to streetlights — are provided universally today. But Mayor Buttigieg is correct that real fiscal constraints exist, and the government cannot provide every worthwhile public service to everyone. A combination of Republican tax cuts and the growing costs of an aging society have already put the national debt on track to nearly double over the next 30 years to 144 percent of gross domestic product, the value of all goods and services the American economy produces in a year. It will take meaningful tax increases and spending reductions just to stabilize the debt. Given these constraints, leaders must choose which needs would be best served by universal programs and which can be sufficiently met with means-tested programs that save fiscal room for other legitimate needs.

There are also real limits to the government’s power to tax. If the government raises taxes on labor, people may decide it is a better use of their time to stay home than to earn more taxable income, and the tax hike will be less effective the larger it is. While it is difficult to estimate the tax rate that will raise the most revenue from high-income people, two prominent studies estimate that the rate is between 63 percent and 73 percent.

The United States isn’t close to that point today — the average person in the highest-earning 1 percent pays roughly a 47 percent rate on the last dollar they earn from work, accounting for federal, state, and local taxes. The revenue-maximizing tax rate on income from capital is lower, but the federal government taxes capital below that rate as well. Still, money raised and spent for one purpose cannot be spent on another, and the limits on the government’s power to tax restrict the scale of possible government spending. Policymakers who criticize or defend proposals for universal programs should explain whether universality is the best model to resolve the issue in question, not debate the merits of universality as a general principle.

Typically, successful universal programs solve problems in markets that are not always related to a person’s income. For example, Social Security ensures that all Americans can enjoy a dignified retirement after a lifetime of hard work and replaces the income of people who are too old or disabled to work. Medicare, meanwhile, ensures that these communities have adequate medical care. Other universal programs ensure that everyone pays for “public” goods, which are goods that everyone needs but that private actors do not have an adequate incentive to produce. The government taxes the community and provides such goods to ensure that it is adequately provided.

These are not the only models of successful universal programs today, and there may be other appropriate models besides those already in use. But due to our limited power to raise tax revenue, those who want to make some programs universal — as well as those who want to criticize other candidates’ universal program proposals — need to justify or critique universality on an issue-by-issue basis, not on its general merits.