Republicans Admit They’ve Lost a Crucial Tax Battle

Plus, paying for Medicare for all By Yuval Rosenberg and Michael Rainey How to Pay for Medicare for All? Supporters Say That’s the Wrong Question. Here's Why. Any Democrat proposing a transition to a Medicare-for-all system can expect to be pressed on a pivotal question: How do you plan to pay for it? The price tag: Various estimates have pegged the cost of a Medicare-for-all system at around $2.5 trillion to $3 trillion a year. A widely publicized and much-debated [report]( by Charles Blahous of the libertarian Mercatus Center recently concluded that the plan put forth by Sen. Bernie Sanders (I-VT) “would, under conservative estimates, increase federal budget commitments by approximately $32.6 trillion during its first 10 years of full implementation.” Sanders’ own estimate was [$13.8 trillion]( for the first 10 years. But Kenneth Thorpe, a professor of health policy at Emory University, put the cost at [$24.3 trillion]( over a decade, the Committee for a Responsible Federal Budget estimated it at [$25 trillion]( and analysts at the Urban Institute put the cost at [$32 trillion](. For context, the U.S. Treasury took in about [$3.3 trillion]( in fiscal 2017, so whatever the actual cost of a Medicare-for-all plan would be — and that would depend on the details of such a plan — enacting such a system clearly represents a significant expansion of the federal government and its spending. The debate: Where would that money come from? The answer may matter a great deal, at least politically, if or when Democrats try to come together behind a specific plan and sell it to voters — even if those voters [overwhelmingly]( [support]( the basic idea of Medicare for all. But pundits on the left have a somewhat counterintuitive answer: We’re asking the wrong question. “[T]he truth is that the people who think they are being hard-headed and asking for specifics are missing the point of a proposal like universal health coverage,” [writes]( The Washington Post’s Paul Waldman. “So let me suggest a different question that might be asked not to those advocating Medicare-for-all, but to those opposing it and those journalists assuming it is unrealistic: How do you propose to come up with the $50 trillion you want to spend on health care over the next 10 years?” Waldman’s $50 trillion figure is extrapolated from Centers for Medicare and Medicaid Services [projections]( showing that America will spend about $3.7 trillion on health care this year, both publicly and privately, rising to $5.7 trillion by 2026. That’s under current law, not a Medicare-for-all system. “Where will that money come from?” Waldman asks. “Well, from all of us. It will come in the form of taxes that pay for Medicare, Medicaid, the Children’s Health Insurance Program and Veterans Affairs. It will come in the form of premiums taken out of paychecks, and co-pays, and deductibles. It will be paid by the American people, one way or another.” So if a Medicare-for-all plan and other elements of the progressive or Democratic Socialist agenda cost $40 trillion combined, we’re still saving about $10 trillion, he says. Similarly, over at [The Week]( Ryan Cooper estimates that a Medicare-for-all program that dramatically wrings costs out of our system could reduce national health spending by roughly $11 trillion over a decade (check out his piece to see the details and assumptions involved). “That $11 trillion could easily fund a generous paid leave scheme, top up Social Security and disability benefits, and pay for a solid green infrastructure program, with a lot left over,” he writes. “To get that money, we'll have to drastically restructure the health-care system and pay a bit more in taxes. But make no mistake, the national savings would be tremendous.” Why it matters: As the debate over Medicare for all continues into the 2020 election cycle, expect to hear a lot more of this argument from advocates on the left: The real issue isn’t that we can’t afford a single-payer plan, it’s that we can’t afford to go on with our current system. Will voters agree — or will the prospect of another massive change to their health care, with the higher taxes required to pay for it, put them off? [Share this story →]( Republicans Have ‘Lost the Messaging Battle’ Over Tax Cuts, GOP Poll Finds Republicans have “lost the messaging battle” over their tax cuts, according to a survey commissioned by the Republican National Committee. The poll, conducted early this month by GOP firm Public Opinion Strategies and reported Thursday by [Bloomberg News]( found that 61 percent of voters said the law benefits large corporations and the rich more than middle class families, while 30 percent said the opposite is true. By a 36-point margin, independents said the law benefits corporations and the wealthy more. Overall, public opinion of the tax law was split, with 44 percent favoring it and 45 percent opposing. According to Bloomberg, the RNC-commissioned report says that “most voters believe” that Republicans want to cut Social Security and Medicare “in order to provide tax breaks for corporations and the wealthy.” The survey report attributed those beliefs to “a fairly disciplined Democrat attack against the recent tax cuts.” An [analysis]( by the Urban-Brookings Tax Policy Center found that 65 percent of the benefits of the GOP tax cuts this year will flow to the top 20 percent of earners, and more than 20 percent of the gains will go to the top 1 percent. The Bloomberg report also reminds readers that, after the tax law passed, Senate Majority Leader Mitch McConnell said, “If we can’t sell this to the American people, we ought to go into another line of work.” Republicans haven’t given up on their messaging fight, though. House Republicans are expected to vote next week on a second round of tax changes that would make permanent the individual tax cuts enacted last year. IRS Holds Off on New W-4 Form The Treasury Department [announced]( Thursday that the debut of the Internal Revenue Service’s new W-4 form will be delayed until the 2020 tax year. A draft released earlier this year — you can see it [here]( — was criticized by tax professionals on numerous fronts. One interesting detail: The draft form would require multiple job holders to inform their employers about their other jobs, raising privacy concerns. The W-4, also known as the Employee's Withholding Allowance Certificate, is filled in by workers to enable employers to withhold the appropriate amount of taxes. The tax overhaul passed last year, which eliminated personal exemptions and doubled the standard deduction, made that process more complicated, and experts feared the draft version would lead to under-withholding for some employees. For the 2019 tax year, Treasury will release a version of the W-4 that is “similar to the 2018 version currently in use.” Kelly Phillips Erb, a tax expert at Forbes, [summed up]( the frustration felt by many practitioners over the delay: “To be clear, a law that Congress pushed through at the end of 2017, which was effective beginning in 2018, won’t have clear guidance for taxpayers on withholding until 2020.” Quote of the Day "The attitude is that the Americans are throwing so many billions at the program that problems will be solved." – Dutch defense analyst Dick Zandee, [explaining]( why the Netherlands is considering the purchase of additional F-35s, despite ongoing technical problems with the stealth jets. Why Trump May Opt for a Shutdown President Trump’s [abrupt criticism]( of a key spending bill yesterday has some political prognosticators saying there’s a real possibility of a government shutdown in the next 10 days. The Senate bill that drew Trump’s ire is part of a larger spending package that would keep the government open when the new fiscal year starts on October 1. In a deal reached earlier this month, legislators agreed to put off the contentious issue of funding for Trump’s border wall until after the midterm elections. But that’s exactly what Trump is now upset about, and his tweet Thursday suggests that he may not go along with the deal. Politico [said]( Friday that there is a good political case to be made, at least from Trump’s perspective, for forcing a shutdown ahead of the elections. Some of Trump’s allies framed the issue this way to Politico’s reporters: - A shutdown may not hurt as much this time because it would likely be partial, with much of the government funded through the “minibus” spending bills that have already passed or are expected to pass next week. Given the structure of the spending deal, Trump could conceivably focus the shutdown just on the Department of Homeland Security. - A shutdown could excite the base, which is strongly interested in border security, with the goal of increasing Republican turnout in the midterms. - Given the Democratic wave many pundits see coming in the midterms, this could be Trump’s last chance to force the issue. A House controlled by Democrats isn’t likely to give Trump the funding he wants —Politico called the odds of that happening “Zero. Zip. Zilch.” - Trump has leverage ahead of the midterms, which he could use to pressure Republicans to provide billions more in funding for the wall. If they refuse, they could end up stuck in Washington, dealing with a partially shuttered Department of Homeland Security and all the problems and negative press that would produce, instead of being out on the campaign trail. [Share this story →]( Your Prize for Making It Through the Week Fall arrives this weekend, and we could certainly use the cooler, drier air. This nifty [fall foliage map]( will help you plan a trip to see the leaves changing color, from Maine to California and everywhere in between. 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