This post begins with the assumption that healthcare spending reform could save a trillion dollars in US healthcare spending. This is not an absurd figure - see How to Trim US Healthcare Spending by 25 Percent for details. Let’s also assume that these savings are converted into additional tax revenue (one way or another). What to do with all that money?
In a previous post, I considered how to spend an extra $600 billion in increased tax revenues. This is what I came up with:
Here’s how I arrived at the above figures:
Universal Healthcare: Roughly 28 million Americans lack health insurance, most of whom are under 44. In 2017, employers contributed an average of $5,477 for single coverage, with employees contributing $1,213. That adds up to $6690 per person. This is not a Single Payer solution - it’s simply the cost of extending private health insurance to the currently uninsured.
Parental Leave: this would be paid for by an employer tax, similar to an unemployment tax. However, the overall tax burden for employers would not go up, because their spending on healthcare would be going way down due to other reforms. My budget is based on an average parental leave benefit of $2600 a month.
Adult Student Basic Income: : The ASBI would provide $1000/month up to six years total (minimum one month at a time) for adults enrolled at least part-time in postsecondary training and education programs, from ESL classes to apprenticeships to graduate school. The benefit would not be means-tested, so recipients could work without jeopardizing their ASBI payments.
Over half the ASBI budget would come from funds made available by eliminating or downsizing other government programs, e.g., Pell Grants, federal student loans, and Supplemental Social Security. Note that the reduced budgets for safety net programs would be mostly due to a decline in applications, as more disabled, unemployed, and low-income folk would go back to school to take advantage of the relatively generous ASBI. Also, many ASBI recipients would be disqualified from other benefit programs due to income thresholds for eligibility. (See How to Pay for The Adult Student Basic Income for more details).
Environment: That’s just what was available after figuring out how the rest of the $600 trillion would be spent.
Rental Subsidies: The typical federal subsidy is about a third of overall rent. Currently about 5 million low-income households received federal housing assistance. I doubled the number of households and made the average subsidy $500 a month. Part of this money would go to subsidizing tiny rooms in residential hotels for the chronically homeless.
Research and Development: over the past few years, R&D budgets have been slashed across a bunch of agencies, as has the budgets for congressional staff. You can’t craft sound governmental policy without high quality information and analysis. $13 billion is the least I could do.
What could we do with an additional $400 billion (making the total $1 trillion). I’d add $200 billion to environmental protection, energy efficiency initiatives and research related to climate change mitigation and adaptation, $100 billion to other research (including research to aid policy decision-making), and $100 billion to pay down government debt.
This is doable without a huge increase in the regulatory and tax burden.