Sensible Democrats recognize Rep. Alexandria Ocasio-Cortez's Green New Deal as an unworkable—and un-serious—re-imagining of our economy. Americans simply aren't going to embrace a top-down government reordering of our energy systems, health care, infrastructure, agriculture production, and workplaces. And that's before we have to factor in the $90 trillion-plus price tag
But it isn't just AOC proposing to dramatically expand government's role in American life. Democratic party standard bearer are also proposing to grow government on a scale that would have been political nonstarters just a decade ago.
Americans should ask themselves: Is this really the direction we want our country to take?
Consider this: Representative John Larson (D-CT) has more than 200 Democratic cosponsors for his Social Security 2100 Act, which would be Social Security’s biggest expansion in decades. Not only would Rep. Larson impose an enormous tax increase on American workers to close the entirety of Social Security's unfunded liability, he would take even more money from workers to increase benefits for retirees.
High earners would take the biggest tax hit: Currently payroll taxes are imposed on the first $132,000 of earnings. Larson would re-impose the payroll tax on earnings above $400,000, an enormous marginal tax rate increase for this group. Yet Rep. Larson would require all workers to pay more, with payroll tax rates climbing from 12.6 percent to 14.8 percent – a historical high.
Despite the “soak the rich” rhetoric, this proposal isn't about helping low income seniors: benefits would become more generous for all seniors, including those who are rich themselves. As AEI's Andrew Biggs explains, seniors are already our wealthiest cohort, with a poverty rate of less than seven percent, the lowest of any age group. Rather than taking from the rich to give to the poor, Rep. Larson's Social Security proposal takes from younger workers (who have a much higher poverty rate) to give to retirees, regardless of if they need it.
Democrats have similar plans for child care. Senator Elizabeth Warren proposes dramatically increasing federal government subsidies in order to make daycare at a government approved facility free for parents with household earnings less than around $50,000 per year, and ensure that no family spends more than seven percent of income on child care. To finance the $70 billion program over 10 years, Sen. Warren proposes taxing Americans' wealth in excess of $50 million.
Sen. Warren is counting on the media and public to shrug off the idea of a wealth tax—few worry about crimping the lifestyle of those with $50 million in the bank—but this ignores how such a policy would impact the economy broadly by encouraging wealthy Americans to take their assets elsewhere. But putting aside concerns about financing this proposal, Americans should consider the fairness of a government program that would tilt policy to favor a select group of parents—those who use formal, paid daycare centers—and away from those who use family-based or in-home care options.
Organized daycare facilities tend to be parents least preferred options. That's one of the reasons why only about a third of families with children under age five use institutional daycare. Many families make significant financial sacrifices to keep a parent at home, or to enlist grandparents, friends and family, to make family-care possible. Other families find in-home care providers in their neighborhood and ways to work from home and stagger job schedules, so that they can be there for their children. Why don't these families deserve help? Why should government tie support solely to using one kind of childcare arrangement?
The one-size-fits-all, government-knows-best mentality continues with Democrats' approach to workplace benefits. The Left's leading proposal, the FAMILY Act, would impose another payroll tax on workers (the bill specifies a 0.4 percent payroll tax, though analysts project actual costs would be at least five times larger). Then all workers would be eligible to receive a benefit replacing a share of their pay for up to 12 weeks when they have qualifying life events.
Beyond the considerable tax imposed on every workers' paychecks (making it harder for them to save and prepare for life events on their own), employers faced with this regime would have tremendous incentive to reduce or eliminate their own benefit packages—many of which are more generous and provide full-pay replacement during times of leave—in favor of the federal option. Businesses would also have an incentive to avoid employees likely to regularly take advantage of these generous leave benefits when hiring for critical positions. That's bad news for women's advancement—particularly for women of child-bearing age.
Democrats want the public to see them as the party of Robin Hood, taking from the undeserving rich to give to the downtrodden. Yet they aren't being Robin Hood, but plain old Bureaucrats, in taking resources from one group to give to those they favor. This rule of bureaucracy isn't fair and doesn't tend to be effective: When government crowds out flexibility and innovation, it's often those with lower incomes and less resources who tend to be hurt most.
Given the high cost in terms of lost opportunity and less freedom, Americans should recognize this direction is no deal at all.