Politics & Policy

Five Bills to Move America Closer to the Socialist Ideal

Sen. Bernie Sanders speaks with reporters following the party luncheons on Capitol Hill in Washington, D.C., October 3, 2017. (Aaron P. Bernstein/Reuters)
To see the Democrats’ true agenda, look at the legislation they introduce.

Right now, Democrats are debating whether they are outright, outspoken socialists, like Bernie Sanders; capitalists trying to save capitalism, as John Hickenlooper describes himself; or some sort of quasi-socialist midpoint between those identities. But self-identification almost always involves a bit of self-deceit and a healthy dose of self-flattery. To assess the leading Democrats’ true agenda, look beyond their rhetoric and instead consider the legislation they introduce, and how they want to change America’s laws. The portrait is clear: Well beyond the high-profile bills such as the New Green Deal and Medicare for All are less-noticed proposals for price controls and revoked patents, vastly expanded government benefits programs, much higher taxes, bans on the closure of federal-agency field offices, and a general appetite to expand the size of government at all levels.

Five of the Democratic presidential candidates in the Senate — Bernie Sanders, Kirsten Gillibrand, Cory Booker, Kamala Harris, and Elizabeth Warren — are cosponsoring the Prescription Drug Price Relief Act of 2019, which would have the federal government decide what a “fair price” for medication is and then revoke the patents on any drugs it deemed overpriced. The fair price would be determined by the federal government’s calculation of the average costs for the same drug sold in other countries. Even if the price was in line with the cost in other countries, the federal government could deem it overpriced given the size of the affected patient population, the value of the drug to patients, the size of a manufacturer’s revenues generated by the drug, or “other factors the Secretary [of Health and Human Services] determines appropriate.” Sanders’s legislation would apply to any medication sold in the United States. This would create enormous new risks in development of new prescription drugs, as the HHS secretary could, at any time, deem a drug “overpriced” and revoke the patent, allowing any other manufacturer to make the drug. The patents on prescription drugs would become extraordinarily unreliable; the more popular a drug was, the more likely it was that people would complain to HHS that it was “overpriced.”

Four of the Democrats running for president — Sanders, Gillibrand, Booker, and Harris — are cosponsoring the Social Security Expansion Act, which would increase the payments of Social Security benefits to every retiree and increase the size of cost-of-living adjustments. For obvious reasons, lots of people like Social Security, but as the Social Security Administration itself tells recipients, “it was never meant to be the only source of income for people when they retire.” Starting next year, the money going out the door is more than the money coming in; in 2035, the government won’t be able to cover the shortfall.

The preferred solution of Sanders and his allies is to make the whole system bigger and more expensive. Currently, on all income up to $132,000 — up from $128,400 last year — taxpayers pay 12.4 percent to the Social Security system. Raising the income threshold increased taxes on nearly 12 million Americans. Your employer pays 6.2 percent and you pay 6.2 percent, but if you’re self-employed, you pay the entire 12.4 percent. Sanders and the other Democratic senators would leave income between $132,000 and $250,000 untouched but then subject all income above $250,000 to the Social Security payroll tax. They also want to increase the current net investment income tax for people making $200,000 or more, and for couples making over $250,000, from 3.8 percent to 10 percent.

Sanders insists that this would ensure the long-term stability of Social Security and that the higher tax rates would bring more money into the system. But the rich would probably move their assets to avoid the higher taxes, and the plan does nothing to address Social Security’s fundamental problem of too many retirees depending on too few workers. The retirement of Baby Boomers, the lengthening of life expectancies, and the lowering of fertility rates are creating a squeeze that cannot be fixed by simply taxing rich people more.

That’s not the only big idea Sanders and Booker have for Social Security. The pair, along with Warren and three other senators, introduced the Social Security Administration Fairness Act, which aims to make the Social Security Administration bigger and make it impossible, in effect, to close any field office. The SSA has aimed to move more of its operations and interactions with beneficiaries online to save time and money; it completed 163 million transactions through its website in the past year. The SSA still has 1,229 field offices across the country; 67 offices have closed since 2010.

Sanders wants to make the budget for the SSA equal to 1.5 percent of overall benefit payments. SSA’s overall budget is $12.9 billion in fiscal 2019; Sanders’s bill would increase it to about $15 billion. The proposed bill would also put a stop to closures of field offices and contact stations. To close any office, the SSA director would effectively have to get permission from the House Ways and Means Committee and Senate Finance Committee.

Sanders and Gillibrand also cosponsored the For the 99.8 Percent Act, which dramatically increases the estate tax. There are currently twelve tax brackets for estates, from zero for inheritances of $10,000 or less all the way up to 40 percent for inheritances of more than $1 million.

Sanders and Gillibrand want rates to be much higher: 45 percent on the value of an estate between $3.5 million and $10 million, 50 percent on estates between $10 million and $50 million, 55 percent on estates in excess of $50 million, and 77 percent on the value of an estate in excess of $1 billion.

Sanders brags that “under this legislation, the families of all 588 billionaires in America who have a combined net worth of over $3 trillion would owe up to $2.2 trillion in estate taxes.”

Finally, over in the House, Democrat Frederica Wilson of Florida introduced the Jobs Now Act of 2019, which is interested in creating only one kind of employment: government jobs. Her bill would authorize $1 billion in new spending to be directed to “local government or community-based organizations” to “retain, employ, or train employees providing a public service for a unit of general local government.” Why require localities to come up with the funding for their own government programs and employees, when Washington can send a check? The text of the legislation specifically states that more than half of the grants must be used to “retain employees who are providing a public service and who would otherwise be laid off as a consequence of budget cuts.” The grants would be a get-out-of-consequences-free card for local lawmakers who have chosen to spend more than their tax revenues can cover and more than their local taxpayers are willing to pay.

Whether the problem is frustration at the pharmacy counter, the cost of living for America’s retirement, or paying for local government services, the answer from the Democratic party is always the same: Give the government more money and power. The private sector is always the foe that is to be conquered, government-funded benefits are always meant to grow, offices are never to be closed down or reorganized, and budget cuts are always an unnecessary cruelty. Taxpayers who feel like they’ve paid enough are always denounced as greedy, but Democrats never see that excessive appetite at work in the state.

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