Update 398 • Penny Lanes: Econ. Positions
and Left/Center/Right Turns in Atlanta Debate
Today marks 52 years since the BBC informally banned the song “I Am the Walrus” by the Beatles for its sexually suggestive lyrics. Paul was not impeached. But there was no such controversy about this week’s Democratic debate in Atlanta, where the debate about such items as trade and the wealth tax was not fully engaged.
What new economic policy positions did the candidates unveil at the debate, meaning both first-impression positions on new turf and shifts in existing positions or terminology? We delve into the key exchanges on Wednesday.
Goo goo g’joob weekends, all…
This week, the ten qualifying Democratic 2020 presidential candidates took to the stage for the fifth debate this cycle. In Wednesday’s update, we previewed the candidates’ economic policy priorities. In this update, we review the key economic policy ideas debated, assessing their merits and political viability should one of these challengers find her or his way into the White House in 2020.
Wealth Tax (Warren, Booker)
Sens. Cory Booker and Elizabeth Warren had a heated back-and-forth over the latter’s wealth tax proposal. The Warren proposal imposes an annual 2 percent levy on household net worth over $50 million, rising to 6 percent on each dollar of net worth over $1 billion. Her campaign estimates that the new tax will affect 75,000 American households and raise $3.75 trillion over ten years.
Warren and Booker disagreed over whether the tax was unjustly punitive, with Booker suggesting that there were other ways the wealthy could pay their fair share, including raising the estate tax and taxing capital at the same rate as ordinary income. The disagreement over the wealth tax is an interesting one — is it a punitive tax (they are all punitive) to an unjust degree, aiming principally at reigning in excessive wealth, a revenue-raiser, or both? The Booker-Warren exchange suggests that the candidates agree on the principle of increasing taxes on wealthy Americans, but differ over the means by which this can be achieved.
Warren argues that the estimated trillions in federal revenue that would be raised by the wealth tax could go toward funding a number of important social programs, such as universal child care, universal pre-K, and cancellation of student debt. Recently, she included her wealth tax proposal as a key pay-for in her Medicare-for-all plan. Assuming the wealth tax raises as much money as she claims it will — where will this money go? Wednesday’s debate left that question open.
Economic Assistance (Yang, Sanders)
Several candidates addressed important social policies, some grounded in current legislation being considered on the Hill. Two prominent economic assistance policies debated on Wednesday night were paid family leave and affordable housing.
- Paid family leave: Andrew Yang said that only two countries in the world do not guarantee paid leave for new parents: the United States and Papua New Guinea and that prioritizing a paid family leave bill would be one of his first priorities in office. This Congress, both Republicans and Democrats have been working on paid family leave legislation. Other candidates on the stage, including Sens. Warren, Sanders, and Klobuchar, as well as Mayor Buttigieg, all support the Family and Medical Insurance Leave (FAMILY) Act, H.R. 1185/S. 463. The bill would guarantee 12 weeks of paid leave for new parents or to take care of a sick relative.
- Affordable housing: In addition to their wealth tax debate at the start of the evening, Sens. Warren and Booker compared housing plans. Sen. Warren asserted that her affordable housing bill, the American Housing and Economic Mobility Act (S. 787), would create 3.2 million new housing units across the country. The additional housing supply would reduce rents for lower- and middle-income families by ten percent and would create 1.5 million new jobs. Sen. Booker highlighted his HOME (Housing, Opportunity, Mobility, and Equity) Act (S. 3342), a bill that would provide a refundable tax credit for individuals paying over 30 percent of their monthly income on rent.
Healthcare, Where? (Klobuchar, Biden, Buttigieg)
A priority issue separating moderate and progressive candidates is what to do about healthcare. Sen. Klobuchar, Mayor Buttigieg and Vice President Biden are campaigning on improving upon the ACA. Their proposals include providing a public option, expanding Medicaid, and allowing the Center for Medicare Services to negotiate drug prices for Medicare recipients. Mayor Buttigieg focused on this distinction again on Wednesday highlighting the difference between his position and complete single-payer health care, describing his compromise as “Medicare for All who want it.”
None of the other candidates challenged how Sens. Sanders and Warren would pay for the policy, a point of tension during other debates. The healthcare issue will likely remain one of the defining debates of this campaign, but its lack of attention during Wednesday’s debate allowed for more discussion on other important policy ideas.
The Farmer Dilemma (Buttigieg)
A Midwestern native, Mayor Buttigieg told an anecdote about tariffs affecting a farmer in Boone, Iowa. He described the farmer’s humiliation at having to accept a government handout in order to stay in business, claiming that recent hardship had prevented him from investing in much-needed conservation efforts. The Trump Administration has already spent $28 billion of taxpayer money on farm subsidies — more than double the $12 billion the Obama administration spent on the auto industry bailout in 2009.
No other candidate brought up tariffs or agriculture subsidies on Wednesday, but the issue is important, especially in the politically-critical Midwestern states. Farmers may not be leaving Trump just yet, but they are being harmed by his policies. With rural America being such a large part of the president’s base, it is important for Democrats to get their messaging and solutions around this topic right if they have any chance to cut into Trump’s lead in Wisconsin, Michigan and Pennsylvania.
Set the Date: December 19
The qualifying candidates will next share a national debate stage on Dec. 19 in Los Angeles. Six candidates have qualified so far, with more likely to qualify before the Dec. 12 deadline. The 2020 Democratic presidential candidate field will likely remain large for the balance of the year. Expect attention on California itself, which last year experienced population loss for the first time ever and feels about a continent away from the values and goals of the administration in Washington.
Other Related Articles
- Update 735: Shutdown Threat In Temporary Remission
- Update 728 — Suspended Animation:House Left Behind as the World Turns
- Update 722 — From Strikes to Shutdown: Challenges to the Post-Covid Recovery
- Update 720 — Weekly Economic Roundup
- Update 719 — Discretionary to Discount: Consumer Spending Trends and Trajectory