“How Will We Pay for It?”

10.29.17
Jette Carr
U.S. News /29 Oct 2017
10.29.17

“How Will We Pay for It?”

The United States federal government spends an unfathomable amount of money. With the budget projection for FY 2017 hovering at $4 trillion, the government still manages to operate on a deficit. With the national debt becoming so insurmountable that it’s become the butt of jokes, it’s fair to scrutinize new spending.

When new spending is proposed, “How will we pay for it?” is a common refrain in American politics. This is a fair question to ask, but we must be consistent in this fiscal scrutiny. With each increase, government should be steadfast in our analysis of the costs and benefits of the proposal. In reality, this rarely occurs.

Military Increases

Recently, Congress approved a record-breaking $700 billion annual military budget. This is an $80 billion increase of the previous year and significantly more than the $54 billion increase President Trump requested. This enormous increase is shocking in many ways.

The Senate voted 89–8 in favor of the budget. When Trump requested an increase to defense spending, prominent Democrats like Chuck Schumer and Nancy Pelosi vocally objected. As Pelosi put it, the budget “throws billions of dollars at defense while ransacking health and education funding.” She voted in favor of this military budget increase.

In the House of Representatives, the vote was 344–81 in favor. The House bill differs slightly from the Senate’s in that it calls for the creation of a new branch of the military: Space Corps. The Space Corps would focus solely on space warfare missions…Seriously.

Unwanted and Unnecessary

The creation of a Space Corps is opposed by the Department of Defense, U.S. Air Force, Air Force Space Command and military leaders such as Secretary of Defense James Mattis, Secretary of the Air Force Heather Wilson, Vice Chairman of the Joint Chiefs of Staff General Paul Selva, Chief of Staff of the Air Force General David L. Goldfein, and the current commander of Air Force Space Command General John W. Raymond.

There is no need or want for the creation of a Space Corps, but Congress is making taxpayers pay for it anyway, just like with the $1 trillion F-35 fiasco.

Unchecked Spending

The total price tag for our annual military budget is unparalleled, according to estimates from the Stockholm International Peace Research Institute. Before this increase, The U.S. already accounts for more than a third of all global military spending. With this new budget, the U.S. will be spending thrice as much as China on its military, and 10x as much as Russia.

At a time when international conflict is becoming less direct via cyber attacks and terrorist organizations, this increase in military spending defies logic. The United States’ military superiority is already established. A direct military conflict with a superpower is far-fetched. Space warfare is flat-out fantasy. In reality, our current enemies are armed with IEDs and malware.

Yet every year, our government continues to write the military a blank check without scrutiny. No one stops to ask: “How will we pay for it?”

Higher Education

Take tuition-free college for example. It’s a progressive proposal that would greatly aid the middle class: extinguishing the student debt crisis, preparing the nation for a more advanced 21st century economy, and making our workforce more competitive at a global level.

Introduced earlier this year, the College for All Act aims slightly lower. The bill would eliminate tuition and fees at public four-year colleges and universities for students from families that make up to $125,000 per year. It also makes community college tuition-free for all income levels. It ends the federal government’s ability to profit from student loans, allows students to refinance existing loans at lower rates and cuts the government lending rate for new undergraduate borrowers.

The total price tag for all this is $47 billion per year. This is lower than Bernie Sanders’ campaign goal of fully funding tuition-free college, estimated at $75 billion annually. To put it bluntly, the total cost to provide tuition-free college is less than this year’s increase to the military budget.

Not bad, considering American college students are collectively saddled with $1.3 trillion in debt, more than Russia’s entire economy.

However, this proposal has been disregarded. Pundits assert that it will never make it through our current Congress. In contrast to the bipartisan ease with which military increases are passed, the education bill was immediately kneecapped by the question: “How will we pay for it?”

Healthcare

With Obamacare in downward spiral — whether from its shortcomings, intentional sabotage, or constant threat of repeal — healthcare has been a hot topic all year. While many conservatives aim to repeal the Affordable Care Act leaving nothing in its place, it’s becoming clear that the best path forward is to join the rest of the world and move toward a single-payer system.

In contrast to current “Repeal and Replace” efforts, progressives announced the Medicare for All Act. The bill would consolidate all the existing ways that people get insurance into a single government plan. The bill would eliminate deductibles, copayments, and medical bills. There would be no concept of out-of-network providers. It covers more than Medicare currently does, including dental and vision care. It would also overturn the Hyde Amendment by including access to abortion insurance.

It’s hard to overstate the benefits of such a system. Currently, as The Week’s Ryan Cooper put it: “The whole health-care industry could not possibly exist without the elaborate network of government regulations, subsidies, and programs that backstop it at every point. Yet the amount of complexity this system dumps on the citizenry is simply brain-melting.” Moving to a single-payer system would simplify access and administration of care, reduce out-of-pocket costs, and expand coverage to all Americans.

Recently, the idea has been gaining momentum. Recent polls have shown that a record amount of voters now support the idea, trending upward. But in Congress, single-payer healthcare is facing bipartisan pushback: “How will we pay for it?”

Due Diligence

Admittedly, the sticker shock is hard to ignore. The highest estimate from an adversarial think tank estimates the cost to be $32 trillion over 10 years. That’s a big pill to swallow. However, let’s look at this in the context of what Americans are already spending for healthcare.

The United States currently spends more on healthcare than any other country. In 2015, Americans spent $3.2 trillion dollars on healthcare; this number is expected to grow 5.6% annually. This year, spending on healthcare passed $10,000 per capita for the first time. By the year 2040, national spending on healthcare is estimated to balloon $15,026 per capita. The country would be spending 18.5% of the GDP on healthcare.

In that light, it becomes clear that Medicare for All would actually offer a savings over our current system. Its implementation would simply reallocate healthcare spending from private to public, with the administrative savings going straight to taxpayers’ wallets.

The Medicare for All proposal was accompanied by a number of financing proposals that highlight these savings. It introduces the idea of 4% income-based premium paid by households to pay for this system. The typical middle class family would save over $4,400 per year under this plan. On the employer side, it proposes a 7.5% income-based premium. The average business would save over $9,000 annually in health care costs per employee.

Ignoring the clear advantages inherent in the cost-benefit analysis, many politicians of both parties have consistently scoffed at the idea of a single-payer system: “How will we pay for it?”

National Priorities

As former Vice President Joe Biden once said “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” The inconsistent scrutiny with which we analyze government spending reveals our values and priorities as a nation.

The education, healthcare, and infrastructure of our country are in crisis. However any attempt to improve or expand government spending in these areas is met with dismissive scrutiny. Meanwhile, our government allowed military and war spending to grow unchecked.

What’s the motivation behind this? Money. New government spending is only scrutinized when it conflicts with special interests’ profits.

The unfortunate truth is that the majority of Congress does not act in service of the people, they act in service of their wallets. In 2016 alone, the defense industry spent $128,635,198 lobbying Congress. Colleges spent $74,228,805. The pharmaceutical industry spent over $248,733,749, health insurers spent $78,463,804.

Their goals are obvious. The defense industry wants to sell more military equipment. Colleges want to charge American students lavish fees. Pharmaceutical companies want to sell more drugs. Health insurers want you to pay more and cover less.

It’s not personal, it’s business.

Return to Honest Debate

When our government officials act in service of themselves, rather than in service of their constituents, we all lose. Crises go unaddressed. Good solutions are dismissed on dishonest terms. Special interests are rewarded with blank checks on the taxpayers’ dime.

If we are to move forward as a nation, we need to acknowledge the power lobbyists hold over government officials. Only then can we have an honest debate about “How will we pay for it?”

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