Warren’s Increasingly Desperate Health Care Messaging


Share  Tweet
Edward Kimmel / Flickr

Elizabeth Warren has run a bad and weird campaign for president. At the start of her run, she decided that she would brand herself, not as a brawler for ordinary people, but as a nerd wonk and the only candidate in the race who has policies. This was a strange decision because all of the other candidates also have policies and nerd wonk aesthetics have a limited electoral appeal that is concentrated among the professional-managerial class.

As her campaign started to fade, she seems to have brought in consultants that told her she could turn things around by adopting the boutique idiom of the academic and nonprofit world in which you interrupt every sentence with canned phrases about centering, voices, and recognition. She also then pivoted hard towards insisting, in other words, that she’s uniquely a “progressive who gets things done.”

This evolution into Hillary Clinton 2.0 has not saved her campaign but has instead relegated her to near irrelevancy: 3rd in Iowa, 4th in New Hampshire, 35 points back in Nevada, currently single digits in South Carolina.

In her latest effort to fight against the dying of the light, Warren has tried to convert the greatest policy blunder of her campaign into a kind of strength. This flailing effort is full of errors and misrepresentations, which I will discuss below.

Background

Both Warren and Sanders are nominally in favor of Medicare for All, which means that both have to solve the supposed M4A financing problem. That problem is as follows: existing government spending and targeted rich-people taxes are not enough to fund Medicare for All and so middle class taxes must also be raised. Many believe this is a big no-no even though the new taxes replace far higher middle class spending on premiums and out-of-pocket medical expenses. Given this belief, the big question becomes: how exactly are you going to implement the necessary middle class taxes?

The normal approach to doing this, which Sanders adopted many years ago, is an income tax increase that exempts the first $29,000 of personal income and an employer-side payroll tax. The charm of this approach is that it replaces the flat fees middle class families currently pay for health care with income-linked taxes, thereby redistributing the health care burden up the income ladder.

When Warren decided she had to release her own financing plan to resurrect her flagging support levels, her advisors reportedly presented her with multiple options:

One explanation [for her delay], according to sources close to Warren’s campaign, is that the U.S. senator from Massachusetts is still considering financing options and at least one under review does not include a middle-class tax hike.

We have never seen the options that were left on the cutting room floor, but there are of course only so many ways to do this kind of thing and you can be certain that those options included the usual mixtures of income taxes and payroll taxes. Yet given this menu of choices, Warren apparently gravitated towards the one that “does not include a middle-class tax hike.”

The problem of course, as we discussed already, is that it is not actually possible to do Medicare for All without some middle class taxes. What she ended up trying to sell as a plan with no middle class taxes was in fact the most regressive M4A financing plan anyone has ever released, a plan that forwent income taxes and payroll taxes for a head tax that ultimately charges the same amount of money for every employee regardless of whether they earn minimum wage or $20 million per year. Relative to the ordinary income/payroll tax approach, the Warren head tax leaves low-wage workers paying massively more and high-wage workers paying massively less.

The reason she believed she could sell this as something other than a middle class tax is because, as a statutory matter, the tax is charged to the employer not the employee, meaning it is an indirect middle class tax like a value-added tax or an employer-side payroll tax. Put differently, this option was chosen, not because it was smart wonkery, but because Warren believed she could trick the media into saying it is not a middle class tax hike.

This gamble paid off initially. By working with sympathetic reporters who have various embargo restrictions, she was able to orchestrate a roll out that featured a dozen or more prominent news articles declaring, often in the headline, that she had done the impossible: an M4A financing plan with no middle class taxes.

The gimmick started to backfire though when less sycophantic types were able to read the plan and highlight the head tax problem, including TPC’s Howard Gleckman, CBPP’s Jared Bernstein, Emmanuel Saez and Gabriel Zucman, and of course yours truly. The head tax problem is not just that she is lying about not raising middle class taxes, but that her particular choice of middle class tax is the worst possible choice. It is the opposite of what a technocratic wonk would do and simply is awful on the merits.

Recent Developments

For many months after the debacle, Warren seemed to just want to move on with things. But more recently, as part of her resurrected schtick as the only serious wonky wonk, she has bizarrely decided to make her least wonky plan the centerpiece of her claim to wonkdom. She keeps putting out messages, including in last night’s debate, that she is the only one who did her homework and has a serious health plan. And today she released a little website proclaiming the brilliance of her plan and the inferiority of the others.

The website makes the following nonsensical claims:

  1. Warren’s plan has no premium while Bernie’s plan has a 4 percent premium on every dollar of income above $29,000. In reality, Warren’s plan charges every worker the same head tax amount while Bernie charges an income tax (4 percent) and payroll taxes (7.5 percent) that are linked to earnings. You can call all of these charges “premiums” or you can call all these charges “taxes.” But the bottom line is Warren’s plan has the most regressive premiums/taxes of any M4A plan that has ever been released and Bernie’s plan has far more progressive premiums/taxes.
  2. Warren’s plan does not raise middle class taxes while Bernie’s does. This is a lie, as we just discussed above. Warren’s head tax is a middle class tax. It is the most regressive middle class tax anyone has ever proposed to fund Medicare for All.
  3. Warren brings families health costs to nearly zero while Bernie’s plan does not because it charges premiums. This is just a rehash of point (1) above. Warren is hoping everyone forgets that she charges premiums in the form of her head tax, the most regressive middle class tax/premium anyone has ever proposed for Medicare for all.
  4. Warren’s plan will be implemented in the first term while Sanders’s plan will take four years to implement. Bernie’s bill moves people onto Medicare in four age-based chunks but in the process of doing that allows everyone to sign up for Medicare immediately. Warren’s proposal is similar except it does not actually move everyone onto Medicare over any period of time. She says a second bill will do that.

In the death throes of a campaign, this kind of desperate lying is to be expected of course.