Clinton’s Economic Plan Is Upside Down

Michael Lodge

by Michael Lodge

In the next few blogs I am going to try and find articles on the examination of Clinton’s economic and tax plans for the nation.  Gordon Gray of American Action Forum has written a solid piece on the economic proposals and how much it is going to cost the taxpayers of the United States.  Candidates love to make promises but normally the American people have no idea how much this free stuff of proposals is going to cost the American taxpayer.

The amount of debt held by the public alone would reach $25.825 trillion in 2026 under Clinton’s plan. The amount of debt held by the public today is $13.968 trillion.

“Based on these estimates, Secretary Clinton’s proposals would, on net and over a ten-year period (2017-2026), increase revenues by $1.3 trillion, increase outlays by $3.5 trillion, for a combined deficit effect of nearly $2.2 trillion over the next decade,” Gray wrote.

The report notes that Clinton’s proposals would also increase deficits to 5.7 percent of Gross Domestic Product, and the debt held by the public to 93.4 percent of GDP, “well above the current law projection of 85.6 percent.”

Clinton’s most expensive policy proposal by far is guaranteeing up to 12 weeks of paid family leave at a cost of $1.598 trillion. Her “College Compact” plan that would give free community college tuition for students who work 10 hours a week would cost $347 billion. The campaign says the plan would be fully paid for by hiking taxes on the wealthy.

Clinton’s child care plan would cost $337 billion, while debt free college for future students would cost $107 billion. The tab for universal preschool reaches $66 billion.

Estimating The Costs Of Candidate Clinton’s Proposals

Former Secretary of State Hillary Clinton’s policy proposals as a candidate for president would have a dramatic effect on the federal budget.[1] To her credit, Secretary Clinton has provided a fair amount of detail on her positions. In addition, other organizations, most prominently the Tax Policy Center and the Committee for a Responsible Federal Budget, have also provided estimates of the current candidates’ proposals. This analysis primarily relies on public statement provided by the Clinton campaign, news reports, and third party estimates, specifically from TPC, CRFB, and the American Action Forum.

Based on these estimates, Secretary Clinton’s proposals would, on net and over a ten-year period (2017-2026), increase revenues by $1.3 trillion, increase outlays by $3.5 trillion, for a combined deficit effect of nearly $2.2 trillion over the next decade.

Table 1: Budgetary Effects of Sec. Clinton’s Proposals
budget table hrc

As a share of the economy, Secretary Clinton would increase deficits to 5.7 percent of Gross Domestic Product (GDP), with outlays increasing to 24.6 percent of GDP, compared to revenues of 18.9 percent of GDP.

Figure 2: Budgetary Effects as a Share of GDP
budget chart hrc

As a result of persistent budget deficits over the next ten years, Secretary Clinton’s proposals would increase debt held by the public to 93.4 percent of GDP – well above current the current law projection of 85.6 percent.

Figure 2: Debt Effects
debt table hrc

The spending and revenue proposals reflect 13 broad spending proposals, the net effects of Secretary Clinton’s tax proposals and the interest effects.

Table 2: Costs Estimates of Proposals
Proposals Table

The estimates tabulated above in many respects reflect other published estimates, with the exceptions of proposals 1 and 2, which reflect specific estimates completed by the American Action Forum. The Appendix provides more specific details, including costs estimates for more specific elements of the broader proposals, annual spend-out totals and sources for the proposal itself and sources for the basis of the estimate. This estimate does not include proposals where it does not appear evident that the campaign intended to budget for them, for example, Secretary Clinton expressed support for fully funding the IDEA program (possibly adding $180 billion over the next ten years) and increasing health funding for Puerto Rico (possible cost of $15-20 billion over the next ten years) but did not appear to propose them as discrete spending proposals.

APPENDIX: INCLUDES ANNUAL ESTIMATES, SOURCES, AND ASSUMPTIONS

[1] A comparable estimate of candidate Donald Trump’s policy proposals will be forthcoming.

 

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