Budgets, National Priorities and the Radicalism

In the last year, the country has seen the election and nomination of candidates who are Democratic Socialists of America. These include the Mayor of New York and Seattle, but most importantly a number of Senate candidates in Maine and Michigan. Some of the candidate views are controversial.

DeBlasio tells Sean Hannity that people did vote for abolishing deportations, having universal government run health care and free college education, while eliminating carbon and greenhouse gases from energy production.

And such ideas are not new and have been pushed by the democratic party for many years.

For example, Medicare for all was first introduced in the House in 1993. And most Americans embrace Medicare for 65 million Americans, most of them over 65.

Free college education also sounds enticing given the multiple stories of graduating students carrying with them debt of $100,000 or more.

And a carbon free energy world was first proposed in 1977 by Italian scientist Ceasar Marchetti.

What is surprising is the lack of a serious look at the U.S. federal budget impacts of such proposals.

Let’s begin by looking at some numbers.

Medicare costs $1.1 trillion yet Medicare premiums are only  $440 billion annually. To support 350 million Americans would be costly. The average non-Medicare recipient uses $9000 in medical care compared to an average of $15,000 for a Medicare recipient. Since FY2014, Medicaid has risen 41% in costs and costs $894 billion in federal and state support, especially since the program was expanded to include all low-income adults. To cover all Americans under Medicare implies an annual additional cost of $2.6 trillion plus those currently under Medicare or $3.7 trillion. However, all annual health insurance premiums for government and private sector programs comes to $1.1 trillion so “Medicare for all” would send a new tax bill to all 166 million working Americans of $22,300 each, compared to the average Medicare tax of $6,600 now paid. The current Federal government is spending at a $7.1 trillion annual pace, so Medicare for all jacks that up to $9.7 trillion.

But there is more. Current U.S. government “college” outstanding loans are $1.9 trillion, which gives one an idea of what “free college education” would cost. This is not an annual cost but the U.S. government currently spends $126 billion each year even after the reforms implemented starting in 2025. To pay the current outstanding loans would require each of the 166 million working Americans to shell out another $11,400 each. So federal spending goes up to $11.6 trillion.

No internal U.S. deportations, the latter the idea of Senator Mark Warner, ranking member of the Senate Intelligence Committee, would at least cost the U.S. $350 billion a year. Warner says once you get by the border patrol or get a visa to come to America, you are home free, working off the books, receiving universal health care and free education. So that costs very working American another $2200 a year. That puts Federal spending at $11.950 trillion.

Finally, estimates for the cost of eliminating carbon from energy production, now at 41 billion tons a year out of 61 billion tons of greenhouse gases, vary but on average would be $6 trillion a year. Given the U.S. produces 16% of energy worldwide, the U.S. would implicitly be required to spend some $960 billion a year to meet the goals of the Paris “climate accords.” However, as former Secretary of State Kerry has acknowledged, China and India produce together 5.8 billion tons of coal, or 70% of all coal worldwide. And India and China together are constructing 95% of all new coal based energy production worldwide. Given these policies, the greenhouse gas (GHG) and carbon reduction goals cannot be met. So Federal spending is now estimated to be $12.910 trillion.

So, the Mamdani wing of the Democratic party would have the Federal government annually spend an extra $2.6 trillion for health care; $126 billion for free college; another $350 billion as a consequence of no deportations; and another $960 billion for no carbon energy, or a grand total of $4.036 trillion annually to meet just the top four socialist party objectives. And push overall annual U.S. government spending to $11 trillion.

The revenue required would be eighty percent of the current $5.3 trillion now collected by the Federal government. 

All 166 million working Americans would each see their tax burden jump $24,300.

If you stole the entire $9 trillion wealth of every billionaire in America, they could pay the added bill for 2 years.

Apart from doubling the Federal tax burden of every working American, the only offsetting budget cuts proposed have been defense cuts especially nuclear deterrent cuts. Senators Sanders, Warren and Markey, and Representatives Khanna and Garamendi support unilaterally cutting our nuclear deterrent from 400 to 150 ICBMs, from 60 to zero strategic bombers, and from 12 to 4 submarines, reducing U.S. nuclear capability from 640 to 214 ICBMs and SLBMs and from 1550 warheads to 400. The savings would be minor as the cost of making our strategic bombers nuclear capability is 3%. Currently we only produce one SSBN annually so budget cuts would be in the outyears as they would be for the new Sentinel missile. Reducing Minuteman from 400 to 150 could implicitly eliminate two operating ICBM bases and overtime save annually some hundreds of millions and overall, no more than $1.3 billion annually, (as previous assessments often show base closings do not provide immediate cost savings but only in the very long run.)

True, Sentinel, Columbia and an upgraded D-5 will cost some $325 billion. But the proposed cuts will save funds only in the outyears when production will end. The savings of roughly $200 billion over some 20 years or $10 billion a year have to compared to $4 trillion in additional annual costs which are some 40-fold greater.

Spend $4 trillion more and save $10 billion makes no sense. It doesn’t matter what you call these ideas--socialist, communist, democratic socialist, or progressive. To repeat, the spending doesn’t make sense. And the budget cuts harm our national security and begin a process of disarmament.

Peter Huessy is President of Geostrategic Analysis of Frederick, Maryland.