Elizabeth Warren Pushes New Plan to Expand Social Security

Plus, your daily news roundup By Yuval Rosenberg and Michael Rainey Elizabeth Warren Has a Plan to Expand Social Security Ahead of tonight's Democratic presidential debate, Elizabeth Warren released a plan Thursday to expand Social Security and raise benefit payments. Warren’s plan would: - Immediately increase benefit payments by $200 a month. If enacted, Warren’s plan would raise the average monthly Social Security benefits from $1,395 to $1,595 in 2020, according to an analysis by Moody’s economist Mark Zandi. - Change the way annual cost-of-living increases are calculated to use a measure of inflation that focuses on seniors and they costs they face, including health care. - Provide Social Security credit to people in job-training programs and those who leave the workforce to care for family members. - End current provisions that reduce benefits for many former state and local public employees with pensions. Warren’s plan would reportedly cost $150 billion in its first year. To pay for it, she proposes raising taxes on upper-income households, including: - A new 14.8% payroll tax on annual earnings over $250,000. Currently, only earnings up to $132,900 are subject to a 12.4% payroll tax. Under Warren’s plan, the cap would continue to rise, reaching the $250,000 level by 2037, eliminating the gap. - A 14.8% tax on investment income in wealthy households, with a threshold of $250,000 for single filers and $400,000 for married joint filers. - A broader definition of investment income that is subject to payroll tax. - The application of payroll taxes to pass-through business owners. The Warren campaign estimated that those new taxes would result in a $1.1 trillion reduction in the federal deficit over a decade, based on the analysis by Moody’s Analytics. The revenue increases would help stabilize the Social Security system’s finances, keeping the program’s trust fund solvent until 2054, according to the analysis. Why it matters: It’s a shrewd political move to court older voters who polls show are more likely to favor Joe Biden. More importantly, perhaps, Warren’s plan confirms a major change in approach toward Social Security among Democrats in recent years. “Warren’s proposal is the latest sign that Democrats have shifted from promising to protect Social Security benefits — or in the case of former President Barack Obama, proposing to slow the rate at which benefits increase over time — to expanding the program and increasing benefits,” Alan Rappeport and Jim Tankersley of The New York Times [said](. However, by asking the rich to pay much more, the plan may run the risk of weakening political support for the country’s most important poverty reduction program, Zandi said. Read Warren’s proposal [here]( along with Zandi’s [analysis](. Mnuchin Says Treasury Is ‘Seriously Considering’ a 50-Year Bond Asked about President Trump’s [recent suggestion]( that the U.S. should “refinance” its debt at lower interest rates over a longer time horizon, Treasury Secretary Steven Mnuchin said Thursday his department was looking into issuing “ultra-long bonds” with 50-year durations. Echoing comments made a few weeks ago, Mnuchin said that Treasury has been looking at the issue for the past two years and is “seriously considering” the option for 2020. “We would do this in a way that if there is demand, it’s something that we would meet. I personally think it would be a good thing to expand the U.S.′s borrowing capabilities,” Mnuchin said. “I would say it’s obviously quite attractive for us to extend and de-risk the U.S. Treasury borrowing. So we’re also looking at extending the weighted average maturity of the Treasury borrowing to de-risk this for the U.S. people.” Health Care Industry Group Launches Ad Blitz Against Medicare for All and a Public Option If you watch tonight’s Democratic debates, you’re likely going to see some attacks on Medicare for All and the idea of a public option that would allow anyone to buy into a Medicare-style plan. Those attacks won’t just be coming from the candidates on stage. The Partnership for America’s Health Care Future — a coalition of drugmakers, insurers and other parts of the health care industry — is launching television and digital ads during the debate as part of a seven-figure campaign targeting Medicare for All, Medicare buy-in and public option plans. “With about 90 percent of Americans covered, our leaders need to focus on solutions that control costs and build and improve upon what’s working – not on one-size-fits-all government-controlled systems that would force Americans to pay more and wait longer for worse care,” Lauren Crawford Shaver, the industry group’s executive director, said in a statement. Why it matters: The ad blitz shows "industry groups view Medicare for All as a serious threat in a 2020 election,” [writes]( Wall Street Journal’s Stephanie Armour. Poll of the Day: Democrats Increasingly Favor Obamacare More than eight in 10 Democrats — 84% to be precise — say they view the Affordable Care Act favorably in the latest Kaiser Family Foundation tracking polls. That’s the largest share of Democrats supporting the law in the nine years the tracking poll has been conducted. (Overall, 53% of Americans view the law favorably.) Support for the law among Democrats has risen 11 percentage points since President Trump took office. The poll also finds that 55% of Democrats and Democratic-leaning independents say they’d prefer a candidate who wants to build on the ACA to expand coverage and lower costs, while 40% say they’d prefer a candidate who wants to replace the law with a national Medicare-for-All system. Majorities across party lines agree that Congress’s top health care priorities should be lowering prescription drug costs, maintaining protections for patients with pre-existing conditions and reducing what people pay for care. But a partisan split emerges when people are asked to choose whether it’s more important for lawmakers to make sure all Americans have health insurance or to lower health care costs. Chart of the Day: A Record Jump in Health Insurance Prices Inflation appears to be edging higher. The consumer price index, a closely watched measure of inflation, rose 0.1% last month and 1.7% year-over-year, the Labor Department said Thursday. But that slow rise was due in part to weak gas and energy prices that masked a larger acceleration in inflation elsewhere. The core index, which strips out food and energy prices, rose 0.3% and was up 2.4% from a year earlier. The last time the core inflation reading was higher was in 2008, Marketwatch’s Jeffry Bartash [notes](. “The core reading reflected the biggest monthly rise in medical-care costs since 2016 and record increases in health-insurance prices,” Bloomberg’s Jeff Kearns and Reade Pickert [report](. The Bloomberg chart below shows just how dramatic the recent rise has been. Two Experts Debunk Four Big Health Care Fallacies In a The New York Times op-ed, Ezekiel Emanuel, a health policy expert and a former adviser in the Obama administration, and Victor Fuchs, a Stanford health economist, look to clarify what they call “four fundamental health care fallacies”: 1. Employers pay for workers’ health insurance. “Since 1999, health insurance premiums have [increased]( 147 percent and employer profits have increased 148 percent,” they write. “But in that time, average wages have hardly moved, increasing just 7 percent. Clearly workers’ wages, not corporate profits, have been paying for higher health insurance premiums.” 2. Medicare for All is unaffordable. “True, Medicare for All would increase federal health care spending. But that is not the same as increasing total health care spending, which was over $3.5 trillion last year,” Emanuel and Fuchs say. “We have our doubts about Medicare for All. But unaffordability is not a reason to oppose it. … When you hear a health care price tag in the trillions, know that the existing system has already brought us there.” 3. Insurance company profits drive health care costs. “The fact is, we could eliminate those profits and it would hardly matter to the cost of health care. You would not notice it in your premiums. … True, $22.1 billion is a lot of money — but it is 0.6 percent of health spending. And last year alone health care costs increased over $130 billion — six times insurance company profits. Health care spending would not be significantly cheaper if all insurance companies’ profits were zero.” 4. Price transparency can bring down health care costs. “Over 80 percent of the cost of medical care is paid by private and public insurance. Patients have little incentive to seek out the cheapest provider. When pricing websites exist, few patients use them. … Furthermore, price considerations are useful for choosing only about 40 percent of procedures — routine services like colonoscopies, M.R.I. scans and laboratory tests. Most of the expensive services — think heart catheterizations, cancer chemotherapy and organ transplants — are not the kind of thing you decide based on price.” [Read the full piece at The New York Times.]( Correction: Health insurance companies are expected to pay $743 million in refunds to consumers this month under an ACA rule, not $743 billion as yesterday’s newsletter said. The total for refunds across the individual and employer markets remains $1.3 billion, as yesterday's email said. News - [Budget Deficit Smashes $1 Trillion Mark, the Highest in Seven Years]( – CNBC - [A Top Senate Democrat Unveils Plan to Revamp Capital Gains Tax, Fund Social Security]( – CNBC - [Senate Spending Bill Would Slash Foreign Military Aid]( – Roll Call - [House to Vote Again to Block Trump's Border Emergency]( – Politico - [Democrats’ Puzzle: What to Do With Trump’s Tax Cut?]( – Wall Street Journal (paywall) - [Economists Don’t See Path to 3% Growth in 2019]( – Wall Street Journal (paywall) - [Congress Rakes In Millions From Drugmakers]( – Kaiser Health News - [Ben Carson Cleared of Misconduct in Ordering $31,000 Dining Room Set for Office Suite, HUD Inspector General Finds]( – Washington Post - [Medicaid’s Dark Secret]( – The Atlantic - [VA May Have to Pay Billions in Vets’ Emergency Care Bills]( – Associated Press Views and Analysis - [White House May Have Given Up on Health Plan It Says It Is Writing]( – Washington Post - [5 Big Questions That Will Get Answered at Tonight’s Debate]( – John F. Harris, Politico - [Debating 2020 Democrats Should Not Ignore Our Exploding Debt]( – David Minge and Tim Penny, Roll Call - [Elizabeth Warren’s Plan for Social Security Looks Smart]( – David Leonhardt, New York Times - [Warren Says Her Tax Plan Asks Just ‘Two Cents’ of the Super-Rich. But How Much of a Hit Would Gates, Walton and Their Peers Actually Take?]( – Annie Linskey, Washington Post - [The Unserious Virtue Signaling of Elizabeth Warren's Wealth Tax]( – James Pethokoukis, The Week - [Attention, Democrats: The Health Care Industry Is Spoiling for a Fight]( – Paul Waldman, Washington Post - [How Will Medicare-for-all Proposals Affect Medicaid?]( – Jennifer Tolbert, Robin Rudowitz and MaryBeth Musumeci, Kaiser Family Foundation - [Which Health Policies Actually Work? We Rarely Find Out]( – Austin Frakt, New York Times - [Buying U.S. Medications From Canada Is Not the Same As Importing Them]( – Allan Golombeck, RealClearMarkets [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( 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]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.