Sen. Elizabeth WarrenElizabeth WarrenFederal Reserve officials' stock trading sparks ethics review Manchin keeps Washington guessing on what he wants Warren, Daines introduce bill honoring 13 killed in Kabul attack MORE (D-Mass.) on Friday released a new plan laying out how she would pay for her "Medicare for All" proposal that would not directly raise taxes on the middle class, responding to pressure and criticism from other Democrats in the presidential race.
The plan is a shift from Warren's progressive rival in the 2020 primary, Sen. Bernie SandersBernie SandersDemocrats urge Biden to commute sentences of 4K people on home confinement Briahna Joy Gray: Push toward major social spending amid pandemic was 'short-lived' Sanders 'disappointed' in House panel's vote on drug prices MORE (I-Vt.), who has said tax hikes on the middle class will be necessary to help pay for Medicare for All.
“We don’t need to raise taxes on the middle class by one penny to finance Medicare for All,” Warren wrote in a Medium post published Friday. The senator instead recommended new taxes on the rich, corporations and employers, as well as cuts to defense spending.
Warren’s plan, which would cover health care and long-term care for everyone living in the U.S. while eliminating private insurance, would cost an additional $20.5 trillion in new federal spending over ten years.
That is a lower estimate than the $34 trillion in new federal spending the Urban Institute recently reported would be needed to fund a single-payer program.
That Warren’s plan won’t raise taxes on the middle class is significant. Other Democrats running for president, who increasingly view Warren as the party’s front-runner, have frequently tried to peg her down on the proposal’s costs and implications for middle class families.
The proposal comes as polls show Warren in the driver's seat ahead of the Iowa caucuses and as opponents try to sell the public on their own health care plans.
Warren has said repeatedly that “overall costs” would decrease for the middle class under Medicare for All, but until now she has not commented on whether it would require tax increases.
The challenge posed by the original Medicare for All proposal — authored by Sanders and supported by Warren — is that it does not detail how it would be paid for.
This “has also allowed opponents of Medicare for All to make up their own price tags and try to scare middle class families about the prospect of tax increases,” Warren wrote in her Medium post.
Warren and Sanders have both argued that Medicare for All will lead to lower health care spending overall.
Warren said that under the current system, individuals are expected to spend about $11 trillion on premiums, deductibles, copays and out of pocket costs, and that she’d reduce that amount to “practically zero.”
She said that taxes don’t need to be directly raised on the middle class in order to make up the difference and to pay for the additional $20.5 trillion in federal spending she’s proposing.
To pay for the plan, Warren said that she would redirect $6 trillion that state and local government currently spend on health care to help fund it.
Warren aims to raise about $8.8 trillion through an “employer Medicare contribution” that would essentially redirect to the federal government what employers are currently paying to insurance companies for their workers' health care.
She said $1.4 trillion would be raised “through existing taxes on the enormous amount of money that will now be returned to individuals’ pockets from moving to a Medicare for All system with virtually no individual spending on health care.”
Warren also said that she’d raise about $2.3 trillion by boosting IRS enforcement of tax laws and strengthening tax reporting and withholding requirements.
The Massachusetts senator is floating new taxes aimed at the financial sector: a tax on financial trades, which she says could raise about $800 billion over 10 years, and a fee on large banks that she says could raise about $100 billion over 10 years.
Warren said she’d make tax changes for corporations that would raise about $2.9 trillion over a decade. These include requiring businesses to write off the costs of their investments over a longer period of time, a country-by-country minimum tax of 35 percent on U.S. corporations’ foreign earnings, and taxing foreign firms based on their sales in the U.S.
And Warren said she’d raise about $3 trillion over 10 years by expanding her wealth-tax proposal, as well as by requiring the top 1 percent of households to pay taxes on their investment gains annually, instead of when the investments are sold, at ordinary income rates.
Warren also said she’d raise revenue through comprehensive immigration reform and by curbing defense spending.
Other Democrats challenging Warren for the party's nomination signaled Friday they would continue arguing Medicare for All increases taxes on the middle class.
"The mathematical gymnastics in this plan are all geared towards hiding a simple truth from voters: it's impossible to pay for Medicare for All without middle class tax increases," said former Vice President Joe BidenJoe BidenHouse Democrat threatens to vote against party's spending bill if HBCUs don't get more federal aid Overnight Defense & National Security — The Pentagon's deadly mistake Haitians stuck in Texas extend Biden's immigration woes MORE's deputy campaign manager Kate Bedingfield.
Bedingfield argued the employer Medicare contribution would "fall on American workers."
Updated at 11:49 a.m.