Bernie Sanders Goes Big on Student Debt Forgiveness

Plus, Beto O'Rourke proposes a war tax By Yuval Rosenberg and Michael Rainey Bernie Sanders’ Plan to Wipe Out All $1.6 Trillion of Americans' Student Debt Bernie Sanders is taking the idea of student debt cancelation to a new level. The Vermont senator and Democratic presidential candidate unveiled a [plan]( on Monday that would have the U.S. government pay to entirely eliminate the $1.6 trillion in student debt held by 45 million Americans. The Sanders plan is broader than debt-forgiveness proposals from other Democratic presidential contenders, including Sen. Elizabeth Warren of Massachusetts and Julián Castro of Texas. Warren has proposed $640 billion in student loan cancellation, including up to $50,000 in debt for people earning under $100,000. But Warren’s plan offers no relief to those who earn more than $250,000. Sanders’ proposal, which would also make tuition free at public universities, community colleges and trade schools, would be paid for by a new Wall Street tax that the Sanders campaign says will raise some [$2.4 trillion]( over 10 years. Sanders would place a 0.5% tax on stock trades, a 0.1% tax on bond trades and a 0.005% fee on derivative trades. “Wall Street speculators nearly destroyed the economy a decade ago, and the American people bailed them out,” Sanders [tweeted]( Monday. “Now it's time for Wall Street to come to the aid of the middle class of this country.” Other experts put the total cost of Sanders’ plan at [$3 trillion]( and some suggest that his Wall Street tax would raise less than his camp projects. And critics of student debt forgiveness proposals, including both conservatives and some Democrats, argue that they would disproportionately benefit higher-educated Americans, who tend to have higher incomes — and thus would amount to a giant welfare program [for the upper-middle class](. “The cost will march toward $3 trillion and benefit a lot of wealthy families and future high-earners,” Brian Riedl, an analyst at the Manhattan Institute, a libertarian-leaning think tank, told [The Washington Post]( which first reported the Sanders plan. “Of all problems requiring a $3 trillion federal expenditure, the college costs of middle- and upper-class college graduates seem lower-priority.” But proponents say that paying for student debt relief by taxing the affluent will reduce inequality, stimulate the economy and help lower-income Americans advance financially by freeing up those with heavy debt burdens to do things like buy homes. Slate’s Jordan Weissmann [suggests]( that, as generous as it is, the Sanders plan doesn’t go far enough in a different way: “The problem with Sanders’ approach is that while it would forgive a lot of graduate school debt sitting on the books today, it does little to address the problem of graduate school debt going forward. His bill would cap interest rates on all student loans at 1.88 percent which, sure, would be helpful. But it wouldn’t lessen the amount students need to borrow in the first place, and that’s the more serious issue.” Beto O'Rourke Proposes 'War Tax' Democratic presidential candidate Beto O’Rourke is proposing to create a “war tax” that would fund a trust fund dedicated to veterans’ benefits including health care and disability compensation. The tax would go into effect “at the start of any newly authorized war,” [O’Rourke’s proposal states]( and would not apply to households with members currently in the military or veterans Here’s how much different households would pay under the proposal: - Income less than $30,000 a year: $25 - less than $40,000: $57 - less than $50,000: $98 - less than $75,000: $164 - less than $100,000: $270 - less than $200,000: $485 - more than $200,000: $1,000. O’Rourke is also calling for an end to wars in Afghanistan and Iraq, which he says will save $400 billion, half of which he proposes to spend on benefits for veterans of those wars. “Eighteen years into the war in Afghanistan, and nearly three decades after our first engagement in Iraq, the best way to honor our veterans’ service is to cancel the blank check for endless war — and reinvest the savings to ensure every American can thrive upon their return home,” the former representative from Texas said in a [prepared statement]( Monday. Billionaires: Please Tax Us More A group of extraordinarily wealthy Americans that includes Facebook co-founder Chris Hughes, Walt Disney Company heiress Abigail Disney and investor and philanthropist George Soros have issued a collective call for higher taxes on the rich. In a [letter]( published Monday, the 19 signatories say that the U.S. has “a moral, ethical and economic responsibility to tax our wealth more” as part of a national effort to strengthen democracy, boost the economy, improve health care and address climate change. “We are writing to call on all candidates for President, whether they are Republicans or Democrats, to support a moderate wealth tax on the fortunes of the richest one-tenth of the richest 1% of Americans -- on us,” the letter says. “The next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans.” The letter notes that several presidential candidates including Sen. Elizabeth Warren have proposed a wealth tax and says that arguments against such a policy “are mostly technical and often overstated.” The complexities of imposing such a tax can be solved easily enough, the authors say, and shouldn’t distract the nation from the important issues at hand. “Instituting a wealth tax is in the interest of our republic,” the letter says, and “taking on this tax is the least we can do to strengthen the country we love.” Blue States Millionaires Would Be Big Winners from SALT Cap Repeal Some lawmakers from high-tax blue states want to repeal the $10,000 cap on state and local tax deductions imposed by the Tax Cuts and Jobs Act, but according to the Joint Committee on Taxation, doing so would provide a sizable benefit to wealthy taxpayers. In a report released Monday, JCT said that eliminating the SALT cap would lower the tax burden on the roughly 600,000 households earning more than $1 million a year by a total of $40 billion. That’s 52% of the $77.4 billion in tax breaks that would be restored with a repeal of the SALT cap. Households earning more than $200,000 a year would claim 92% of the restored tax break, JCT said. The House Ways and Means Committee will hold a hearing this week on how the SALT cap has affected middle-income taxpayers and local school districts. Some House Democrats are pushing for legislation to raise or even eliminate the cap, but no changes are expected anytime soon, since Senate Finance Committee Chairman Chuck Grassley has said he does not plan to address the issue. Medicare for All vs. a Public Option: Where the Democratic Candidates Stand on Health Care The New York Times surveyed the 23 Democratic presidential candidates on how they propose to improve the U.S. health care system. The 10-question survey, which received responses from 19 of the candidates, revealed a distinct split among the candidates. A dozen said they favor a “public option” that would allow Americans to keep their private health coverage while also offering the choice of enrolling in a government-run insurance program. The other seven said they favor a single-payer “Medicare for All” system — though in some cases they indicated they’d allow for some flexibility in how the country moves to such a system. There’s much more to the survey, though. You can read the candidates’ responses in full [here]( or a Times analysis of the results [here](. What Voters Really Want on Health Care The nearly two dozen Democrats running for president are debating a variety of proposals for providing universal health care in the U.S., but voters seem to have a more basic issue on their mind: how to pay less for the drugs and medical services they need. The Washington Post’s Amy Goldstein [says]( that although numerous surveys and polls show that health care is the top concern for voters, the primary problem they are worried about is their own personal cost, not system design or access. As a result, all the talk about large-scale proposals such as Medicare for All may be failing to connect with substantial portions of the public. For example, Bernie Sanders argues that his plan for a single-payer system would reduce health care spending at the national level by creating efficiencies, but voters aren’t as interested in the overall effects and just want to know how his plan will lower their medical bills. Robert J. Blendon, a health policy expert at Harvard University, told Goldstein that, unlike 2008 or 2016, the 2020 election won’t be about the dynamics of universal coverage. Instead, the election is “going to be about the price of insulin, hospital charges and insurance premiums, with, ‘What are you going to do about them for me?’” Democratic strategists have taken note of the trend, and hope to use it against President Trump, who they say is vulnerable on the topic among white working-class voters. A recent survey by the Democratic research group American Bridge found that a majority of such voters in four battleground states gave Trump negative ratings on “reducing health care costs” and “taking on the drug and pharmaceutical companies,” Politico’s Scott Bland [reports](. American Bridge says it wants to weaken support for the president among some of some his most loyal followers through a $50 million campaign focused on pocketbook issues, especially health care. That was a solid win. The U.S. women's national soccer team advanced to the quarterfinals of the World Cup, defeating Spain 2-1 in their toughest test of the tournament so far. Up next: likely an even tougher challenge from France, the host nation. Send your tips and feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( to get their own copy of this newsletter. News - [House and Senate Seek to Pass Dueling Border Funding Bills]( – Roll Call - [Trump Official Says U.S. Is Running Out of Money to Shelter Migrant Kids]( – Bloomberg - [Trump Signs Executive Order to Compel Disclosure of Health-Care Prices]( – Washington Post - [Democrats Talk up Tax Credits to Counter Trump Law]( – The Hill - [Trump’s Poverty Proposal Prompts Alarms over Cuts to Medicaid, Head Start]( – Roll Call - [Poll: Tariffs Hurt Economy, Trump Has Gone Too Far on Immigration]( – Fox News - [Drug Costs Should Be a 'Prominent Issue' in Trump Trade Talks: Mount Sinai Health CEO]( – CNBC - ['The VA Is Two-Faced.' Whistleblowers Say Managers Are Trying to Silence Them on Veteran Care]( – USA Today - [Supreme Court to Hear Obamacare Case on Whether Insurers Are Owed Billions]( – The Hill - [The Ivory Tower Team of Wonks Behind Warren’s Policy Agenda]( – Politico - [Medical Groups Warn Climate Change Is a ‘Health Emergency’]( – Associated Press - [Agriculture Department Buries Studies Showing Dangers of Climate Change]( – Politico - [Democrats Weave Climate Messages into Spending Bills]( – Roll Call - [Nebraska Slowly Rolls Out Voter-Approved Medicaid Expansion]( – Associated Press - [Joe Biden Has Been Talking about Income Inequality a Lot Lately — to His Rich Donors]( – Vox Views and Analysis - [Student Debt and Tuition: Warren v. Sanders v. Everyone Else]( – Zachary B. Wolf, CNN - [Social Security Faces a Shortfall. Your Future May Rest on Demanding a Fix]( – Jeff Sommer, New York Times - [How Trump Could Have Terrible Economic Timing]( – Ben White, Politico - [Will There Be Enough Doctors to Fulfill the Health Care Promises of 2020 Contenders?]( – Laurin Schwab, The Hill Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( If someone has forwarded this email to you, consider signing up for The Fiscal Times emails on our [website](. Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.