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It’s no secret that the Democratic race for the 2016 candidacy can’t compete with the fireworks of the race on the Republican side, but what it lacks in drama, it makes up for in policy proposals that actually may be plausible.
The last Democratic debate saw the candidates discussing some of this year’s most talked-about issues — college tuition, health care, tax policy and the minimum wage — in substantive ways that contrasted clearly with the last few debates from the GOP.
Sen. Bernie Sanders, Hillary Clinton and Martin O’Malley seemed to agree on quite a few issues — that Clinton’s emails aren’t worth talking about, and that black lives do indeed matter — but they did have some clashes. Here’s how they matched up on the issues.
College tuition and student debt
Back in October’s debate, Clinton proposed that students would be able to graduate debt-free in exchange for working 10 hours per week at a student job. In November’s debate, she maintained her push for virtually debt-free college (as she really aims to make debt more affordable through better refinancing) for all students below a certain level of income, quipping that she doesn’t support funding kids whose parents are as wealthy as Donald Trump. Rather than making college free for everyone, she instead aims to tackle student debt by lowering payment requirements according to income level. She would raise taxes on wealthy earners in order to fund her plan.
In doing so, she draws a contrast with Sanders, who wants to make college completely tuition-free, in the way that several European nations do. Sanders plans to pay for eliminating tuition with a tax on Wall Street speculation, which would put a tax on the more risky investments made by Wall Street traders. Several nations around the world have imposed similar taxes — some argue that it’s only fair to make sure the financial sector makes a fair contribution to the public welfare, especially against the backdrop of America’s growing income inequality.
O’Malley made little effort to distance himself from Clinton’s plan, but one aspect of his experience as governor of Maryland does stand out: his state froze tuition increases for four years beginning in 2007, which allowed its tuition rates to increase at the lowest rates in the country from 2003 to 2013. It is unclear whether he’d implement a freeze at the national level, although his plan, along with Clinton’s, includes a vague proposal to push colleges to keep costs low. Like Clinton, O’Malley would cap monthly student loan payments at 10 percent of a person’s income.
Overall, Clinton’s and O’Malley’s plans are more modest, but may stand a better chance of getting through Congress in the future. Sanders’s plan to eliminate tuition is more unprecedented, but looks plausible based on Europe’s success, and the U.S. could afford to raise taxes much, much higher than current rates, as we have discussed before.
The candidates on taxes
As we discussed last month, several Republican candidates have had their feet held to the fire for their tax plans, many of which are based on giving large breaks disproportionately to wealthy earners. These plans would grow the economy, but would also add largely to the federal deficit and debt, and it’s unclear how much that factor would hinder that growth (we’ve also discussed why large deficits are bad for the economy here).
Where Republicans want tax cuts, the Democrats advocate for raising taxes on the wealthy in order to pay for several proposals, like tuition plans and health care proposals. The Democrats’ plans lack the specificity of the Republicans’ (which can be viewed here), but it is clear that Sanders wants to raise taxes the most overall, and that the plans would raise revenue, rather than cut it as the Republicans plan to.
Only Sanders has come out in support of dramatically raising the income tax rate for top earners — he would take the top tax rate, which applies to those making $413,201 or more, from the current 39.6 percent up to somewhere above 50 percent. Sanders, in a savvy and humorous move, rose the point that he’s “not that much of a socialist compared to [President] Eisenhower,” who maintained a top tax rate of 91 percent during his presidency in the 1950s.
It’s worth noting here that, for all the criticism socialism has gotten in the Obama era, America has been running under several socialist policies for decades — cornerstones like Social Security, Medicare and Medicaid, laws that no politician on either side dare criticize. We should also note that the U.S. is by no means a high-taxing country compared to the rest of the world, and raising taxes on the wealthy could accomplish several goals like better education and infrastructure funding, as the New York Times points out.
Clinton has come under fire — perhaps legitimately — for her proposal to modify capital gains taxes (which tax stock trading activity), but aside from that, each candidate’s proposals would raise taxes in some positive way — education, student debt and health care coverage could all see better funding if the plans are enacted.
Which brings us, of course, to health care.
A fact that should surprise no one is that health care, and specifically Obamacare (formally called the Affordable Care Act), is still a political issue as we come to the 2016 election. Several Republican candidates still aim to repeal the ACA, but the details of what they’d replace it with are murky.
On the Democratic side, Clinton and O’Malley want to keep the ACA in place, but pass laws to make health care more affordable — Clinton wants to pass a new tax credit to help families afford care, and O’Malley has several less-talked-about proposals to make health care more affordable and accessible.
The clincher, of course, is Sanders, riding in on his political revolution horse to propose what many have tried and failed to do: enact a true national health care system that covers everyone.
Sanders wants to overhaul our current system to replace it with a “Medicare for All” type of plan, under which the government would provide health care insurance for everyone — it remains to be seen, however, how Sanders would specifically fund the plan. The idea is to pass a 2.2 percent health care income tax, with wealthy Americans paying higher than that, according to PBS.
His plan would resemble the kind of “single payer” plans that work well to keep costs sufficiently low in other countries — most industrialized nations have some form of universal health care, but America lags behind. One of CBS’s moderators was skeptical of the plan, and she was right to be — it remains to be seen how Sanders plans to convince Congress to uproot the entire private U.S. health care industry. But single payer has been successfully implemented around the world, so it’s not entirely a shot in the dark.
There have also been quite a bit of fear-inducing numbers thrown around about how much it would cost, and the Washington Post did a good job of debunking those claims.
On the minimum wage
Finally, one of the most heated debates of the past few years has been whether to raise the federal minimum wage. The minimum wage in America has effectively stagnated over the past few decades — if it kept up with inflation, it would be $10.52 per hour today, and if it kept up with worker productivity, it would be around $21.72.
Currently, it’s $7.25, so it may seem like an obvious move to raise it. Both Sanders and O’Malley advocated for a $15 minimum, a move that Seattle, San Francisco and Los Angeles have voted to enact by themselves.
The issue is that raising the minimum wage can have negative effects on employment, a possible issue that Sanders largely sidestepped. Wage increases may drive employers to lay workers off to cover the cost — this is why Clinton advocated for a $12 minimum wage, to soften the theoretical blow.
But conflicting accounts exist. Last year, more than 600 economists wrote to President Obama in a letter advocating for raising the minimum wage, arguing that recent research has shown that the effects on employment are little to none. The benefits of higher worker morale, higher productivity and lower turnover that higher wages bring can outweigh the extra costs, according to Nobel prize-winning economist Paul Krugman.
Research has also contradicted the idea that raising the minimum wage lowers employment. A study by the University of California-Berkeley compared employment levels in counties that sit next to each other, but on opposite sides of a state border. It found that when one state increases its minimum wage and the other does not, the county with the increase does not experience adverse effects on low-wage employment compared to the county without it — in such cases, any downturns in employment are due to other local factors, not raising the minimum wage. That study considered all relevant county comparisons from 1990 to 2006.
It’s also worth noting that the Seattle and San Francisco areas have seen increases in employment since their first incremental minimum wage increases in April and May, respectively (the amount won’t increase to the full $15 until 2017 and 2018), and leisure and hospitality employment (which includes restaurants, the industry most affected by increases) has decreased slightly in the Seattle area but has increased in the San Francisco area.
It is almost certainly too early to hand down the verdict on how the $15 minimum will turn out, and some say $15 may be too much to comfortably phase in — questions of whether to treat rural areas the same as large urban areas are also still to be decided. But despite the ambiguity, the Democratic candidates pushing for an increase when income inequality, falling median wages and an indisputably low minimum wage persist seems to make sense.
The other issues, of course, are more concrete, and we’ll have to wait and see how primary voters receive Sanders’ ambitious messages and Clinton and O’Malley’s more modest platforms as the race rolls on.
