A new study from the left-leaning Urban Institute shows the cost of Medicare for All would reach $34 trillion over its first decade after implementation.
The Urban Institute, a center-left think tank highly respected among Democrats, is projecting that a plan similar to what Warren and Senator Bernie Sanders are pushing would require $34 trillion in additional federal spending over its first decade in operation. That’s more than the federal government’s total cost over the coming decade for Social Security, Medicare, and Medicaid combined, according to the most recent Congressional Budget Office projections.
In recent history, only during the height of World War II has the federal government tried to increase taxes, as a share of the economy, as fast as would be required to offset the cost of a single-payer plan, federal figures show. There are “no analogous peacetime tax increases,” says Leonard Burman, a public-administration professor at Syracuse University and a former top tax official in both the Bill Clinton administration and at the CBO. Raising that much more tax revenue “is plausible in the sense that it is theoretically possible,” Burman told me. “But the revolution that would come along with it would get in the way.”
The 10-year cost of $34 trillion that the study forecasts nearly matches the CBO’s estimate of how much money the federal government will spend over that period not only on all entitlement programs, but also on all federal income support, such as the Supplemental Nutrition Assistance Program. Former Vice President Joe Biden said incorrectly at the debate that the single-payer plan would cost more annually than the total existing federal budget—it would cost less. (The CBO says Washington will spend about $4.6 trillion in 2020.) But over the next decade, the plan on its own would represent a nearly 60 percent increase in total expected federal spending, from national defense to interest on the national debt, according to CBO projections.
The Urban Institute estimates that a single-payer plan would require $32 trillion in new tax revenue over the coming decade. That’s slightly less revenue than its projected cost, because it would generate some offsetting savings by eliminating certain tax benefits the government now provides, such as the exclusion for employer-provided health care.
How big a lift is it to raise $32 trillion? It’s almost 50 percent more than the total revenue the CBO projects Washington will collect from the personal income tax over the next decade (about $23.3 trillion). It’s more than double the amount the CBO projects Washington will collect over the next decade from the payroll tax that funds Social Security and part of Medicare (about $15.4 trillion). A $32 trillion tax increase would represent just over two-thirds of the revenue the CBO projects the federal government will collect from all sources over the next decade (just over $46 trillion.)
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