The Debates
The Republicans and Democrats each had debates last week giving the candidates a national forum to explain the policies they would pursue as our next President and lay out their vision for the country. And those competing visions highlight the contrast between the parties.
The Republicans discussed tax reform options to lower the burden and simplify the Tax Code. The Democrats promised to increase taxes on the "rich," but in practice, every worker could see their taxes go up: the proposal for a national paid leave entitlement benefit would be financed by a new payroll tax.
On the spending side, during the Republican debate, two of the candidates discussed options to balance the budget. Viewers also heard several candidates promote non-defense discretionary cuts as well as reform options that would slow the expected growth in outlays for entitlement programs. In the Democratic debate, very few spending cut ideas were presented, and on entitlements, the candidates vowed to "strengthen and expand" programs like the Affordable Care Act, or to replace it with a single-payer universal health care program.
Highlights:
- Four candidates highlighted specific spending reductions.
- The largest savings would come from repealing the Affordable Care Act ($477 billion over five years), proposed in the debate by Carly Fiorina and Marco Rubio. They each also discussed replacing the Act. Fiorina specifically proposed establishing high risk pools, which could cost $8 billion per year.
- John Kasich said he would seek to slow the annual growth in Medicare spending from seven to five percent (annual savings of $34 billion over its first years of implementation).
- Ted Cruz unveiled a plan to reduce spending by $500 billion over ten years. NTU Foundation was able to quantify savings of $25 billion over five years. Savings could be higher, but the timeline for winding down and eliminating the Departments he specified is unclear, as well as which programs within those Departments would be retained.
- Rand Paul cited three different plans he’s worked on to balance the budget, including an option to reduce spending by one percent per year.
- Combined, the candidates offered ten quantifiable proposals to increase spending.
Highlights:
- A “path to citizenship” for illegal aliens that could increase entitlement spending by $18 billion per year (Jeb Bush).
- Increasing the military with new annual spending: Kasich ($27 billion), Rubio ($43 billion), and Fiorina ($52 billion).
- Donald Trump repeated his proposal to build a wall across the entire southern border, minimum cost of $12 billion. He also called for an unspecified increase in spending on infrastructure.
A detailed line-by-line analysis is available as a pdf.
Generally speaking, in their second debate, the Democrats did not offer very many new specific spending-related proposals beyond those they presented in the first debate, which NTUF analyzed here. A full analysis from Saturday night will be forthcoming on CandidateCost.org.
Jeb Bush
Net Change in Spending per Year: $53.917 billion
Health Care:
Mental Health: “The other issue [related to guns and background checks] is mental health. That’s a serious issue that we could work on. Republicans and Democrats alike believe this.”
Cost per Year: Indeterminate
Notes: There are a number of legislative proposals in Congress, but it unclear what policies Bush would support.
Homeland Security & Law Enforcement:
Background Checks: “ … [W]e need to make sure the FBI does its job [conducting background check].”
Cost per Year: Indeterminate
Notes: The National Instant Criminal Background Check System received an appropriation of $73 million in FY 2016. It is unclear what Bush would propose to “make sure” the Federal Bureau of Investigation is able to complete the checks within the statutory time period.
Entry Visa Programs & Screening: “What we ought to do is tighten up our efforts to deal with the entry visa program so that a citizen from Europe, it’s harder if they’ve been traveling to Syria or traveling to these other places where there is Islamic terrorism, make it harder --make the screening take place.”
Cost per Year: Indeterminate
Notes: It is unclear whether additional resources would be required to achieve this.
National Defense & Foreign Affairs:
Military: “We will rebuild the military to make sure that it is a solid force, not to be the world’s policeman, but to make sure that in a peaceful world, people know that the United States is there to take care of our own national interests and take care of our allies. ... “We have to eliminate the sequester, rebuild our military … .”
Cost per Year: $53.917 billion per year ($215.669 billion over four years)
Note: This figure revises the sequester repeal cost estimate conducted by NTUF for the first debate. Bush has called to eliminate the automatic spending cuts, known as sequestration, for defense. Since FY 2017 will have already started before the next President assumes office, it is unclear whether or how much of the defense sequester for FY 2017 would be reduced. For Fiscal Years 2018-2021, the Congressional Budget Office reports that the total amount of defense sequestration will total $215.7 billion.
Defeating the Islamic State: “ ... [My plan for destroying the Islamic State] starts with creating a “No Fly Zone” and “Safe Zones” to make sure refugees are there. We need to lead a force, a Sunni led force inside of Syria. We need to embed with -- with the Iraqi military. We need to arm the Kurds the directly. We need to re-establish the relationships with the Sunnis.”
Cost per Year: Indeterminate
Notes: It is unclear whether he would intend to finance with the defense increases he has proposed or whether he would maintain the separate funding mechanism for operations in and around the Middle East knowns as the Overseas Contingency Operation.
Ben Carson
Net Change in Spending per Year: -$10.568 billion (savings)
Government Reform:
Tax Reform: “Well, I would suggest a fair tax system, and that’s what we have proposed. A flat tax for everybody … .”
Cost per Year: Indeterminate
Notes: This could possibly entail spending reductions to the extent that the reforms would reduce administrative costs of the Internal Revenue Service.
Reduce Spending: “You know, and then the other thing we have to do is stop spending so much money.”
Cost per Year: -$10.568 billion (first-year savings of $6.828 billion and $18.7 billion over five years)
Notes: Partial Estimate. Carson has called for a 2 to 3 percent across-the-board, non-defense discretionary budget cuts. FY 2015 non-defense outlays excluding interest payments, direct payments to individuals, and all grants, totaled an estimated $227.6 billion, which would yield $6.8 billion in savings in the first year. He has also called to reduce the size of the federal government through attrition, which would save $3.7 billion per year over five years.
Chris Christie
Net Change in Spending per Year: -$8.651 billion (savings)
Homeland Security & Law Enforcement:
Intelligence: “The only way to figure [the homeland security situation] out is to go back to getting the intelligence community the funding and the tools that it needs to be able to keep America safe.”
Cost per Year: Indeterminate
Notes: Intelligence funding data is classified and it is unclear what level Christie would support.
National Defense & Foreign Affairs:
Military: “We need to rebuild our military … .”
Cost per Year: $33.901 billion ($101.703 billion over three years)
Notes: On the trail and in previous debates in this campaign season, Christie has laid out specific defense proposals including, increasing the size of the Army and Marines, and expanding the Air Force and Navy fleets. On his campaign website, he makes this statement: “As President, Governor Christie will repeal the 2011 Budget Control Act and restore funding levels to what Secretary Gates proposed in his fiscal 2012 budget – modest increases in defense spending through the end of the decade that will make a massive difference to our troops.” In 2012, total outlays for national defense stood at $677.852 billion (xls) and has decreased over the subsequent years. According to the latest Congressional Budget Office outlook, defense outlays will be $592 billion in FY 2017, the first year that the next President is in office. CBO forecasts total defense outlays of $2.43 trillion from 2017-2020. NTU Foundation assumes that Christie would increase spending by $28.6 billion per year to get to the 2012 level in 2020. Relative to CBO’s forecast, Christie’s plan would increase defense spending by $101.7 billion over 3 years.
Welfare:
Entitlement Reform: “ … [I] put forward a detailed entitlement reform plan that will save over $1 trillion, save Social Security, save Medicare … .”
Cost per Year: -$42.552 billion (-$228.36 billion over five years)
Notes: Christie has proposed an eleven-point plan with reforms for Social Security, Medicare, Medicaid, and Disability Insurance. NTUF has compared his proposals with budget options analyzed by the Congressional Budget Office to determine potential savings over a five year period. Long-term savings could be much higher if the reforms are maintained. A detailed analysis will be posted on candidatecost.org.
Ted Cruz
Net Change in Spending per Year: Indeterminate
Government Reform:
Tax Reform: “ … [P]ass a tax plan like the tax plan I’ve introduced: a simple flat tax, 10 percent for individuals, and a 16 percent business flat tax, you abolish the IRS ... .”
Cost per Year: Indeterminate
Notes: For FY 2016, the IRS’s budget will be approximately $12 billion, including $2.2 billion for taxpayer services, $4.9 billion for enforcement, and $3.7 billion for operations support. Cruz has proposed a flat tax that would significantly reduce the size and complexity of the current Tax Code and would be expected to reduce tax administration and enforcement costs, but an estimate is unavailable. While Cruz has vowed to “abolish the IRS as we know it”, it is unclear what size agency would be necessary to oversee the reformed Tax Code.
John Kasich
Net Change in Spending per Year: Indeterminate
Economy, Transportation, & Infrastructure:
Regulation: “ ... I think we should freeze all federal regulations for one year, except for health and safety.”
Cost per Year: Indeterminate
Notes: This policy could potentially lead to savings for administration and enforcement of regulations.
Job Training: “We’ve got to … make sure we’re training people for jobs that exist, that are good jobs that can pay.”
Cost per Year: Indeterminate
Notes: Kasich has proposed consolidating the dozens of federal job training programs into block grants, giving the states greater flexibility. This consolidation could also lead to savings.
Education, Science, & Research:
Higher Education: “We’ve got to do a lot about the high cost of ... higher education .. .”
Cost per Year: Indeterminate
Notes: It is unclear what specific policies he would implement to achieve these goals.
Government Reform:
Balanced Budget: “ … [W]we have to have fiscal discipline. We have to show that we can march to a balanced budget.”
Cost per Year: N/A
Notes: “Notes: Budget caps and freezes are important, and over the short term are effective at restraining federal spending. However, as recent history has shown, over the longer term, lawmakers seek ways to skirt or reverse the caps. In our candidate campaign analyses, NTU Foundation is tracking the candidates’ specific proposals to reform and reduce programmatic spending. In the debates, Kasich has offered several significant spending cuts with quantifiable savings.
Kasich has also provided a “balanced budget outline” with spending totals – excluding Social Security – for the eight years from FY 2018-2025. Kasich’s plans would set spending at $30.17 trillion. The Congressional Budget Office’s August 2015 baseline forecasts $31.7 trillion over that period. If Kasich’s reforms are implemented and maintained, spending would be $169 billion lower through FY 2021 relative to the CBO baseline.
Kasich’s plan also would raise more revenues than forecast under CBO’s projection. By 2025, under Kasich’s budget outline, revenues would exceed on-budget spending by $3 billion. However, as noted, these figures exclude funds from the Social Security Trust Fund as well as net flows for the U.S. Postal Service. Under current law, these categories, classified as “off-budget”, will see a net deficit of $976 billion from FY 2018-2025, including a $261 billion gap in 2025.
Marco Rubio
Net Change in Spending per Year: -$52.137 billion (savings)
Health Care:
Repeal Obamacare: “When I’m president of the United States we are getting rid of Obamacare … . … It needs to be repealed … .”
Cost per Year: -$94.04 billion (-$470.2 billion over five years)
Notes: This estimate has been revised since previous debate analyses based on newer data. The Congressional Budget Office (CBO) has not completed an analysis of the full spending related to the Patient Protection and Affordable Care Act. . analysis of repealing the law showed that direct spending would be reduced by $470.2 billion over five years. There are potentially additional unreported discretionary savings.
Replace Obamacare: “[Obamacare] needs to be ... replaced.”
Cost per Year: $8.002 billion ($40.01 billion over five years)
Notes: Partial Estimate. Rubio’s plan to replace Obamacare includes a refundable tax credit for individuals to purchase health insurance, high risk pools for individuals with pre-existing conditions, purchase of health insurance across state lines, and an expansion of health savings accounts.
Refundable Credits: Indeterminate. The level of the credit and the outlay portion of Rubio’s proposed tax credit are unclear. Refundable tax credits are available to filers regardless of their income tax liability, which means that to the extent the value of the credit exceeds a filers’ liability, a portion of the credit is recorded in the budget as spending. The Congressional Budget Office forecasts that under the Affordable Care Act, premium subsidies to purchase health insurance through the exchanges will increase spending by $302 billion over the next five years and $711 billion over ten years (excluding $1 billion in 2016 for exchange grants). In addition, the current credit would reduce revenues by $48 billion over the next five years and $109 billion over ten years. A related detailed proposal from the Center for Health and Economy (CHE) to replace the Affordable Care Act includes a refundable premium credit whose total cost (revenue loss and outlays combined) would be $572 billion over ten years.
High Risk Pools: ($7.964 billion per year, $39.819 billion over five years). It is unclear what specific level of funding Rubio would support; however, a related proposal has been drafted: CHE’s detailed plan to repeal and replace the Affordable Care Act. The reforms included a proposal to re-establish federal funding for high-risk pools to help provide health insurance coverage to individuals with pre-existing conditions. Funding would start at $7.5 billion in the first year and increase by 3 percent annually.
Health Insurance across State Lines: ($38 million per year, $191 million over five years). Related legislation was introduced in Congress that would allow for the purchase of health insurance across state lines. Currently, a 1945 law permits the states to regulate health insurance plans within their borders; however there is an exemption for certain large employers.
The Congressional Budget Office (CBO) conducted a cost estimate for H.R. 2355 (109th Congress), the Health Care Choice Act of 2005. The bill would provide for cooperative governing of individual insurance coverage offered in interstate commerce. At the time, CBO estimated that the bill would increase spending by $160 million over five years ($191 million, adjusted for inflation). It is unclear whether this cost estimate would be higher or lower today given that it was originally calculated prior to the implementation of the Patient Protection and Affordable Care Act (ACA). The proposal was reintroduced in the 114th Congress in the form of H.R. 543.
Health Savings Accounts: (Indeterminate). In an article laying out his repeal and replace plan, Rubio said he would encourage and expand health savings accounts (HSAs), which use tax incentives to encourage individuals to establish savings accounts for medical expenses. CHE’s plan would create a one-time $1,000 refundable credit for HSA enrollees. A cost estimate is indeterminate.”
National Defense & Foreign Affairs:
Military: “When I’m president of the United States we are … rebuilding our military.”
Cost per Year: $33.9 billion ($101.703 billion over three years)
Notes: Rubio has proposed returning defense spending to 2012 levels. .” In 2012, total outlays for national defense stood at $677.852 billion (xls) and has decreased over the subsequent years. According to the latest Congressional Budget Office outlook, defense outlays will be $592 billion in FY 2017, the first year that the next President is in office. CBO forecasts total defense outlays of $2.43 trillion from 2017-2020. NTU Foundation assumes that Rubio would increase spending by $28.6 billion per year to get to the 2012 level in 2020. Relative to CBO’s forecast, Relative to the CBO baseline, Rubio’s plan would increase defense spending by $101.7 billion over 3 years.
Donald Trump
Net Change in Spending per Year: -$62.12 billion (savings)
Economy, Transportation, & Infrastructure:
Infrastructure: “Bring the money -- the $2 trillion -- back to the United States. We’ll tax it, that one time, at 8.75 percent, because 35 percent of zero is zero, but 8.75 percent of $2 trillion is a lot of money. And I would then dedicate that money to rebuilding infrastructure here in this country. ... rebuild our infrastructure, and we need to use it also to protect our grid from terrorists.”
Cost per Year: $31.92 billion ($191.521 billion over six years)
Notes: Trump’s plan would incentivize businesses to repatriate some of their earnings held overseas by assessing a one-time 10 percent tax on such income. A similar repatriation tax (but at 14 percent) was included in President Obama’s FY 2016 budget proposal and was estimated to increase revenues by $268.1 billion over six years. At a 10 percent rate, the tax would raise $191.5 billion. NTUF assumes that all of these funds would be used to increase spending on infrastructure.
Health Care:
Repeal Obamacare: “Obamacare, we’re going to repeal it … .”
Cost per Year: -$94.04 billion (-$470.2 billion over five years)
Notes: This estimate has been revised since previous debate analyses based on newer data. The Congressional Budget Office (CBO) has not completed an analysis of the full spending related to the Patient Protection and Affordable Care Act. A January 2016 CBO analysis of repealing the law showed that direct spending would be reduced by $470.2 billion over five years. There are potentially additional unreported discretionary savings.
Replace Obamacare: “Obamacare, we’re going to ... replace it.”
Cost per Year: Indeterminate
Notes: Trump has said he would replace the Affordable Care Act with “something terrific“ but has not yet released a detailed plan.
Research and Analysis by:
Demian S. Brady, Director of Research
NTUF is the research affiliate of the National Taxpayers Union, a non-profit taxpayer advocacy group founded in 1969.
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