Kamala Harris Smacks Down Question on Paying for Progressive Agenda

Plus, Biden's $600 Billion boast By Yuval Rosenberg and Michael Rainey Kamala Harris Smacks Down Question on Paying for Progressive Agenda Sen. Kamala Harris shook up the Democratic presidential primaries with her debate performance Thursday night. She’s widely seen as the clear winner from the second night of the debates, having created a standout moment by [directly challenging]( former Vice President Joe Biden, the polling frontrunner, for his opposition in the 1970s to federal busing for school integration. She also scored points by effectively silencing a stage full of rivals talking over each other. “Hey, guys, you know what? America does not want to witness a food fight, they want to know how we are going to put food on their table,” she said, drawing applause. But another Harris response is worth a bit of attention. Early in the debate, moderator Savannah Guthrie asked her whether she thinks Democrats have a responsibility to lay out how they will pay for every proposed expansion of government benefits, such as student loan cancellation, free college and health care. Harris’s response: Well, let me tell you something. I—I hear that question, but where was that question when the Republicans and Donald Trump passed a tax bill that—that benefits the top 1 percent and the biggest corporations in this country, contributing at least $1 trillion to the debt of America, which middle-class families will pay for one way or another? Working families need support and need to be lifted up, and frankly this economy is not working for working people. … And on day one, I will repeal that tax bill that benefits the top 1 percent and the biggest corporations of America.” Why it matters: It’s an answer — or a non-answer — that anyone following the fiscal debate since 2017 could have seen coming. Bill Hoagland of the Bipartisan Policy Center [notes]( that the federal debt and deficits were never explicitly mentioned over two nights of Democratic debate. But Harris’s answer illustrates the extent to which many Democrats are now prepared to play offense on the question of fiscal restraint, driven by their irritation over the [hypocrisy]( of Republicans who, despite years of talk about the dangers of debt under President Obama, pushed through deficit-financed tax cuts as quickly as they could. Not all Democrats are taking that approach — and progressives like Sens. Bernie Sanders and Elizabeth Warren still do say that their bold new benefit programs are fully paid for, often through higher taxes on the rich (though other analysts disagree about the extent to which the new costs are covered). But Harris showed that many Democrats now stumping for their policy agenda will refuse to be swayed by deficit-shaming, whether by the GOP or the media. Progressives will applaud that shift. Fiscal hawks will decry it. Either way, it’s a sign of just how the GOP tax cuts have altered the debt debate. Did Joe Biden Get Mitch McConnell to Raise Taxes by $600 Billion? Touting his ability to get things done by working with lawmakers from across the aisle, Joe Biden claimed during the Democratic debate Thursday that when he was vice president, he convinced a key Senate Republican to agree to a substantial tax increase. “We needed to be able to keep the government from shutting down and going bankrupt. I got Mitch McConnell to raise taxes $600 billion by raising the top rate,” Biden said, referring to the 2012 “fiscal cliff” negotiations, which revolved around the looming expiration of the Bush tax cuts and a temporary payroll tax cut, as well as an extension of unemployment benefits. Biden’s claim was quickly challenged on the debate stage by Sen. Michael Bennet of Colorado, who said that the deal Biden made with McConnell did significant damage to the country’s fiscal condition: “[T]he deal that he talked about with Mitch McConnell was a complete victory for the Tea Party. It extended the Bush tax cuts permanently. The Democratic Party had been running against that for 10 years. We’ve lost that economic argument because that deal extended almost all those Bush tax cuts permanently and put in place the mindless cuts that we still are dealing with today that are called the sequester. That was a great deal for Mitch McConnell.” The back-and-forth on the issue highlights a loud and growing complaint from Biden’s left, namely that his long history of working with the opposition party involves more than a few instances of giving away the store in pursuit of bipartisanship. But Bennet’s criticism didn’t address the basic question of the accuracy of Biden’s claim: Did he get McConnell to “raise taxes $600 billion”? Vox’s Matthew Yglesias dug into the details of the fiscal cliff negotiations, and [concluded]( that Biden’s claim was off the mark: “That would be quite the achievement, but it’s not what happened. What Biden got, instead, was an agreement for McConnell to support a partial extension of the Bush tax cuts except for tax cuts that would apply only to families that earned more than $450,000 a year. This did, it’s true, raise $600 billion in revenue relative to a baseline in which the tax cuts were fully extended. Except there was no universe in which that was going to happen. Republicans had just lost the election. The deal obviously lost a ton of revenue relative to a scenario in which the tax cuts simply expired. And it lost considerable revenue relative to scenario in which Democrats got their way and set the cut point at $250,000.” So Biden did make an agreement with McConnell that produced an estimated $600 billion in revenue, but only compared to a demand from Republicans that was unlikely to become reality. Framing it as a tax increase neglects the larger context of the Bush tax cuts, Yglesias says, while claiming it as a victory for bipartisanship puts a shine on what, from the perspective of some other Democrats, was simply a bad deal. Pelosi’s Border Deal Exposes Growing Dem Rift The Democratic party broke into what Politico described as [“open warfare”]( late this week, as House Speaker Nancy Pelosi “reluctantly” agreed to allow a vote on a Senate-passed emergency border aid package. While centrists had pushed for passage of the $4.6 billion funding bill, arguing that lawmakers needed to get resources to the border as quickly as possible, progressives were outraged by what they saw as a capitulation to a Trump administration they argued can’t be trusted to properly use the money meant for humanitarian aid. The Senate legislation did not include the protections and requirements progressives had gotten added to a House version of the bill. Vice President Mike Pence reportedly [promised]( Pelosi that the administration would make administrative changes at the border, including a 90-day time limit on children spending time in an influx facility and a pledge that lawmakers would be notified within 24 hours after the death of a child in custody. In the end, the Senate version passed the House Thursday in a 305-102 vote, with 95 Democrats voting against the measure. The 305 votes in favor included 176 Republicans and 129 Democrats. Why it matters: In addition to its impact at the border, the internal Democratic clash could be a sign of things to come in other fights. Rep. Mark Pocan (D-WI), co-chair of the Congressional Progressive Caucus, reportedly warned that the turn of events on the border bill could drive his 90 members to dig in on other key bills. “The battle,” Politico said, “further illustrates the hurdles Pelosi faces in the fall as she tries to keep her caucus united while negotiating with Republicans to avoid a fiscal cliff and debt default.” Chart of the Day: Census-Driven Spending The 2020 census faces possible delay as the Supreme Court sorts out the legality of a controversial citizenship question added by the Trump administration. Tracy Gordon of the Tax Policy Center [notes]( that in addition to the basic issue of political representation, the decennial population count affects roughly $900 billion in federal spending, ranging from Medicaid assistance funds to Section 8 housing vouchers. Here’s a look at the top 10 programs affected by the census: Americans Are Missing Out on Trillions in Social Security Americans will lose out on $3.4 trillion in benefits by claiming Social Security too early, according to a new report from United Income, an investment management and financial planning company. Written by a team that includes former Social Security officials, the report found that 96% of retirees choose a less-than-optimal time to start claiming their benefits, resulting in an average loss of $68,000 per household for current retirees. The group says that the optimal retirement age for most retirees is 70, even if workers have to dip into retirement savings to wait that long: “We find that U.S. retirees would be able to generate an additional $3.4T in income during their retirement if they optimized the decision about when to claim Social Security, or about a 9 percent increase in total expected future income among retirees that made a sub-optimal financial claiming decision. Nearly all of this income is lost because one or more retirees in a household claim Social Security too early, which means their Social Security benefit is lower than it would be if they had waited. For instance, a person that would receive a $725 monthly benefit if they claimed Social Security at 62 would see that benefit increase to $1,280 if they had delayed until their 70th birthday, an increase of 177 percent. Spread out across the population of individuals that are claiming Social Security sub-optimally, those extra dollars add up to a substantial amount of money. In fact, the average household that claims sub-optimally would see their retirement income increase by $110,546, and the median household would see their income in retirement increase by $81,673, or an average annual increase of about $3,400 in income.” The flip side of the analysis is that if more Americans wait longer to receive their benefits, it would end up costing the Social Security system that much more. [Read the report here](. Your Prize for Making It Through the Week Get ready for some July 4th beach reading with this Washington Post list of [the best books to read]( at every age, from 1 to 100. They’re not all winners, but you may find some inspiration, or reason to pick up an old favorite again. Send your tips and feedback to yrosenberg@thefiscaltimes.com. 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