全球智库信息集成服务系统

This report contains an update.

Today, the United States finds itself at the crossroads of many economic, social, and global challenges. The past several decades have seen real wages for rank-and-file workers stagnate; income and wealth inequality rise; undue political power concentrate in the hands of the few; and the pace of productivity growth and overall economic growth slow. Moreover, despite the United States being among the wealthiest countries in the world, millions of Americans lack affordable health care or child care, nearly one-third of its children live in poverty or on the brink of poverty, economic mobility has declined, and many communities face persistently high unemployment and economic distress.¹ At the same time, scientists warn that the world must take dramatic action to reduce carbon emissions over the next decade to prevent irreversible harm to the planet, our economy, and our communities due to climate change.²

The United States also faces long-term fiscal challenges. The evidence suggests that the debt is not an immediate problem: Since 2008, the public debt has doubled as a share of gross domestic product (GDP) from about 40 percent to 80 percent with no discernable consequences. Over the last 10 years, real interest rates have declined to historically low levels and debt service is still a relatively small share of the federal budget.³ But over the long term, if we maintain our current revenue and spending policies, annual deficits will grow and the public debt as a share of GDP will rise from about 80 percent today to as high as 200 percent of GDP by mid-century.⁴ High and rising debt will increase the share of the federal budget dedicated to debt service and could potentially slow economic growth.⁵ For these reasons, the projected rise in public debt should be viewed as a long-term risk that must be weighed against other risks and opportunities.

The long-term budget proposal presented by the Center for American Progress in this report—CAP’s Fiscal Solutions plan—is premised on the recognition that the United States faces a multitude of critical challenges that must be addressed concurrently. Crucially, it is based on the conviction that we, as a country, can do big things.⁶ We can—and we must—dramatically increase investment in our people, our economy, and our future, as these investments are essential to sustaining a strong economy over the long term. Accordingly, this report proposes an approach that meets critical national challenges head on, including the rising inequality that undermines our economy and democracy; underinvestment in children and the future; and the daunting threat of climate change, while keeping federal debt to manageable levels.

Briefly, CAP’s Fiscal Solutions plan proposes investments and policies to ensure:

• Every American has quality, affordable health care
• Every family has access to quality, affordable child care and comprehensive paid family and medical leave
• The United States takes bold action to address climate change, including major new investments in climate science, research and development, resilience, and the transition to a clean energy economy
• The nation improves the well-being of today’s children and enhances their future prospects by providing a universal child allowance along with other investments, including modernizing school facilities and boosting teacher pay in high-poverty schools
• The United States makes major productivity-enhancing investments in infrastructure, schools, and science and establishes a targeted job guarantee that strengthens our economy and extends opportunity to workers and communities that have been left behind
• Fundamental tax reform is implemented to dramatically reduce income and wealth inequality and provide that all income—whether from work, investment, or inheritance—is taxed under the same progressive rate schedule
• Social Security is protected for decades to come without any benefit cuts or other harmful changes

CAP’s Fiscal Solutions plan makes these investments while substantially improving the country’s long-term fiscal outlook. Specifically, the plan slows the rise in the public debt so that, three decades from now, the debt would be roughly 92 percent of GDP when scored using conventional revenue estimates or 104 percent using dynamic scoring (incorporating feedback from estimated macroeconomic effects).⁷ The level of public debt under the plan three decades from now is only modestly higher than today’s level—about 80 percent—and much lower than projected levels, which come to about 150 percent of GDP under Congressional Budget Office’s (CBO) long-term budget outlook and potentially higher than 200 percent if current policies are extended indefinitely.⁸

Importantly, CAP’s plan shows that we can make the investments we need in a stronger economy—all while holding the nation’s debt to manageable levels and avoiding putting the burden on low- and middle-income Americans—illustrating that the United States has ample fiscal capacity if we, as a country, are willing to raise revenue in a progressive manner.

Investing in the economy and the American people

The budget plan is based on the recognition that, while the public debt level can pose long-term risks, government borrowing is often necessary to finance needed public investments. As a recent CAP survey of the economic literature on debt and deficits concluded, “[T]he government can incur debt to lay the foundation for widely shared prosperity, yet America cannot afford wasteful trillion dollar giveaways to the wealthy.”⁹ Yet the recent runup in public debt has been caused largely by successive tax cuts favoring high-income Americans, the damage from the financial crisis, and foreign wars. It would be a mistake to respond to the resulting deficits by sacrificing public investments in areas such as infrastructure, education, health care, child care, science, and clean energy, where those investments could bolster long-term growth and ensure that its benefits are broadly shared. In fact, as former International Monetary Fund (IMF) chief economist Olivier Blanchard underscored in a recent address, when real interest rates are persistently low, as they are now, the fiscal and welfare costs of public debt are lower.¹⁰ That implies that the cost of failing to make critical public investments is higher.

Accordingly, CAP’s budget plan remedies the past failure to make needed investments in the economy and the American people, focused on several broad areas:

• Guaranteeing affordable quality health care for all Americans
• Investing in innovation and the transition to a clean energy economy to ensure that the effects of climate change do not devastate future generations
• Investing in jobs, infrastructure, and the middle class
• Investing in children and families

In addition to the new investments described below, CAP’s plan maintains general nondefense discretionary spending at its real fiscal year 2019 levels, relieving the harmful effects of the budget sequester and allowing for further investments not specified in this report. Nondefense discretionary spending funds core government functions and critical areas, such as education, public health, environmental protection, and veterans’ services.

Guaranteeing affordable, quality health care for all Americans

Unlike all other developed countries, the United States fails to provide universal health coverage to its citizens. While the United States has seen significant coverage gains in recent years—particularly under the Affordable Care Act (ACA)—efforts to improve health care remain under attack. The Trump administration, with help from its allies in Congress, has worked tirelessly to dismantle the ACA and undermine access to Medicaid. As a result, in one of the wealthiest nations on earth, 30 million individuals remain uninsured—and this number continues to grow.¹¹ In order to address these challenges, it is time to build upon the historic success of the ACA and finally guarantee affordable, quality health care for all Americans.¹²

This budget plan incorporates Medicare Extra for All, the health care plan CAP originally outlined in 2018. Medicare Extra is a universal coverage plan that would eliminate underinsurance. All Americans—regardless of income, health status, age, or insurance status—would have the right to enroll in the same high-quality health plan modeled after Medicare. Newborns, individuals enrolled in Medicaid, and those currently purchasing insurance in the individual marketplace would automatically be enrolled in the new program. While individuals receiving coverage through their work could retain private insurance, they would also have the option to switch to Medicare Extra. Employers would also have the option to sponsor Medicare Extra for their employees.

Medicare Extra would provide comprehensive coverage and include important enhancements to the current Medicare program: an out-of-pocket limit, coverage of dental care and hearing aids, and integrated drug benefits. The plan would offer free preventive care, free treatment for chronic disease, and free generic drugs. Cost sharing and premiums would be limited and scaled by income. Individuals with incomes below the federal poverty level, including most individuals currently enrolled in Medicaid, would have no cost-sharing requirements or premiums.

Benefits under Medicare Extra would include:

• Primary and preventive services
• Hospital services, including emergency services
• Ambulatory services
• Prescription drugs and medical devices
• Laboratory services
• Maternity, newborn, and reproductive health care
• Mental health and substance use disorder services
• Habilitative and rehabilitative services
• Dental, vision, and hearing services
• Early and periodic screening, diagnostic, and treatment services for children

Medicare Extra would significantly reduce health care costs for individuals and families and slow the growth of U.S. national health expenditures. Payment rates for medical providers would reference current Medicare rates—and employer plans would be able to take advantage of these savings. Medicare Extra would negotiate prescription drug prices by giving preference to drugs whose prices reflect value and innovation. Medicare Extra would also implement long-overdue reforms to the payment and delivery system and take advantage of Medicare’s administrative efficiencies. In sum, Medicare Extra provides guaranteed, affordable health coverage to every American while bending the health care cost curve over time.

CAP anticipates that Medicare Extra will have a net cost of about $3 trillion over 10 years (2022–2031), and we have incorporated that target cost into this budget plan. That cost estimate is net of savings achieved within health programs, premiums, and increased tax revenue generated indirectly from changes in employer-sponsored health insurance. The remainder of the cost would be financed by progressive tax revenues.

Taking bold action to address climate change

When it comes to implementing policies today that will leave a better world for future generations, no issue is more important than climate change. Scientists have warned that the world must take dramatic action to reduce carbon emissions over the next decade to prevent irreversible harm to the planet, our economy, and our communities.¹³ The United States must lead the way. But, regrettably, the current administration withdrew the United States from the landmark agreement reached in Paris in 2015 to combat climate change. President Donald Trump’s withdrawal from the Paris agreement undermined America’s leadership and credibility and undermines the strength of our economy. Already, more than 4 million workers are now employed in clean energy industries.¹⁴ The failure to make the needed policy choices and investments to promote a clean energy economy threatens the development of these growing industries and will impede U.S. economic growth over the long term.

Climate change is also a critical fiscal issue. The Office of Management and Budget estimates that the annual costs of unmitigated climate change range from $34 billion to $112 billion by the mid to late century.¹⁵ What’s more, that estimate does not consider the significant resources the nation would need in order to address the effects of climate change on areas such as health care, national security, and infrastructure—all of which could add untold costs.

To reduce carbon emissions, CAP’s plan proposes a progressive, budget-neutral carbon tax. Set at the social cost of carbon emissions, or roughly $52 per metric ton, the carbon tax would shift public and private investment away from carbon-intensive energy sources and toward renewable and lower-carbon energy sources.¹⁶ Because low- and moderate-income households spend a higher share of their incomes on energy costs and other forms of consumption, a carbon tax can have a regressive distributional effect, including increasing hardship for those with low incomes. The CAP plan therefore proposes to rebate all of the net revenue from the carbon tax to middle- and low-income Americans. Such a progressive rebate system can be implemented in a number of ways, including through the combination of lump sum rebates and tax cuts on labor income, which CAP proposed in 2016.¹⁷

Establishing a price on carbon emissions is an important step toward confronting climate change—but given the urgency and magnitude of the challenge, it is not sufficient. There’s also a need for substantial public investments. U.S. investment in climate science and clean energy research and development are critical to both domestic and global efforts to understand and combat climate change. To strengthen these critical foundations, the plan doubles federal spending on climate science; clean energy research and development; and programs supporting advanced manufacturing.

The budget plan would dramatically accelerate the transition to a 100 percent clean energy electricity sector through direct investments that will improve equity and assist low-income and rural communities. This includes updating outdated transmission infrastructure to better integrate renewables and storage technologies; repairing and replacing outdated natural gas distribution pipelines to reduce methane leakage; improving energy efficiency and reducing costs for low-income households through an expanded Weatherization Assistance Program (WAP); and updating energy systems in municipal buildings, schools, universities, and hospitals by funding the U.S. Department of Energy’s State Energy Program for the next 10 years at the levels from the American Recovery and Reinvestment Act (ARRA) of 2009.¹⁸ For the 56 percent of the United States landmass served by rural electric co-ops, CAP’s plan vastly expands funding available through the Rural Utilities Service to both forgive outstanding debts on fossil fuel assets owned and operated by rural co-ops and to replace them with zero-emitting electric generation.¹⁹

The plan also includes CAP’s proposal for a $240 billion, 10-year job-creation program called the Future-Ready Communities Corps. The program—which would help some of the most vulnerable communities by retrofitting them with energy efficient and solar ready homes and even relocating those who are situated on flood plains—is estimated to avoid $60 billion per year in extreme weather-related costs. It would also employ 290,000 people and save households about $7 billion per year on their energy bills.²⁰

The CAP budget plan also makes significant investments in zero emissions transportation, including installing electric vehicle (EV) charging stations in public spaces and federal workplaces. The federal government would also facilitate the replacement of half the buses operated by transit agencies and one-quarter of all school buses with EV alternatives through the expansion of the successful Low or No Emission Vehicle Program. To help more Americans transition to cleaner vehicles, the plan calls for the government to implement a program to encourage trade-ins of fuel inefficient vehicles for hybrid and EV alternatives. The plan also extends tax credits for wind and solar energy and for electric vehicles.

In addition, the plan proposes an annual National Disaster Resilience Competition to fund major resilient infrastructure in communities affected by or at risk for natural disasters. In order to help states pay for resilient infrastructure, clean energy, and clean transportation, CAP proposes the establishment of State Future Funds—federally supported revolving loan funds that support innovative and resilient transportation and energy infrastructure and flood protections in areas that need them the most, including low-income areas and communities of color.²¹ Additional funding for conservation and restoration would be provided to the FEMA Pre-Disaster Mitigation Grant Program, the Land and Water Conservation Fund, the U.S. Forest Service, and the National Oceanographic and Atmospheric Administration (NOAA). We would also provide funding to relocate the Alaska Native communities who are at risk from sea level rise to areas that are safer and culturally appropriate.

Investing in infrastructure, jobs, and the middle-class

Millions of families in the middle- and working-class are not fully sharing in the gains or opportunities from economic growth. Median wages have been essentially stagnant for decades for many groups of workers, inequality has shot upward, and millions of families continue to live in poverty. Together with the rising costs of significant expenses such as health care, higher education, child care, and rent, these factors have contributed to a widening chasm in economic security and opportunity. In 2016, the top 1 percent of earners received nearly one-quarter of U.S. income while the bottom half received only 14 percent. Wealth inequality is even more stark. The wealthiest 1 percent have 39 percent of the nations’ wealth while the bottom 90 percent have just 23 percent.²²

The plan addresses these significant economic challenges that middle- and working-class Americans now face through a series of targeted investments, including rebuilding and reinvesting in America’s infrastructure; providing long term supports and services that allow more people with disabilities and seniors to thrive in their communities; and establishing a federal jobs guarantee program that revitalizes communities that have been left behind.²³ Taken together, these investments would generate growth while creating millions of jobs, increasing worker power, raising wages, and reinvesting in the nation’s physical and human capital.

Rebuilding and reinvesting in America’s infrastructure

Failing to invest in America’s infrastructure puts a significant drag on the economy. Repeated underinvestment in infrastructure has led to deteriorating facilities, broken roads, and crumbling bridges, which increase costs and reduce productivity.²⁴ CAP’s plan would immediately work to reduce this gap by investing an additional $42 billion above baseline per year over the next decade. Funding would go to the nation’s transportation and water infrastructure, rebuilding roads, rails, and bridges, and ensuring access to safe, clean water. This level of investment would generate—through direct and indirect effects—350,000 jobs in the first 10-years.²⁵ By reducing congestion and increasing mobility, which, in turn, would cut unnecessary costs for households and businesses, these investments would ultimately increase overall national competitiveness and growth.

Providing long-term supports and services

Too many seniors and people with disabilities lack access to critical home- and community-based support services and long-term care. As the U.S. population continues to age, this problem will only compound, forcing more and more people eligible for services onto waitlists without care. As it stands now, there are more than 700,000 people with disabilities who qualify for Medicaid but remain on support service waitlists.²⁶ In addition, only 30 percent of seniors who require care and are not institutionalized receive paid support.²⁷ Moreover, wages for caregivers in this sector—such as personal care or home health aides—are very low, with median wages of just $10 to $12 per hour.²⁸ It is clear that more investment is needed in this area. Therefore, the CAP plan earmarks $44 billion annually to support the generation of 1 million home health aide and personal care aide jobs as well as the creation of pathways for the federal government to work with those in the industry and community to develop training programs that provide care workers with specialized skills. This investment would address a long, unmet need and boost economic security for seniors, people with disabilities, and their families while allowing them to thrive in their communities.

Lifting communities left behind with a federal job guarantee

The gains of economic growth have not been shared evenly across income groups or regions, and many communities have been left significantly behind due to a variety of economic and social factors, including automation, offshoring, concentration in certain markets, and structural racism. Although the significant investments outlined throughout this report will undoubtedly help many families and workers facing these situations find jobs and increase their economic security, a more targeted approach is necessary to ensure the hardest hit communities see real positive gains. As a result of this need, CAP’s budget plan appropriates the funds required to pay for the jobs guarantee program—as outlined in the previously published “Jobs Blueprint”—for a full 30 years.²⁹ The jobs guarantee would afford long-term residents in the nation’s most economically distressed counties—comprising roughly 10 percent of the U.S. population—a living wage job in their local labor market.

Investing in children and families

To expand opportunity; reduce poverty and hardship; and help families make ends meet, CAP’s budget plan proposes significant investments in families and children, including a major investment in high-quality child care to ensure that no low- or middle-income family spends more than 7 percent of its income on child care. The plan also invests in a comprehensive program of paid family and medical leave for American workers; a new initiative to increase the pay of teachers serving in high-poverty schools; and a major new funding commitment to K-12 school modernization.

Child care

For families, child care can frequently be among their largest household expense.³⁰ The average cost of center-based child care is more than $10,000 per year, and high-quality centers can cost dramatically more.³¹ Unaffordable or inconsistent child care can reduce parents’ ability to fully participate in the labor market. In fact, breakdowns in child care cost U.S. businesses an estimated $4.4 billion per year and cost families even more in lost wages—$28.9 billion a year.³² In the long run, expanded access to child care and early childhood education provides children with the basis for future mobility and success, resulting in long-term growth and economic stability.³³

CAP’s plan incorporates the Child Care for Working Families Act, introduced by Sen. Patty Murray (D-WA) and Rep. Bobby Scott (D-VA), which would more than double the eligibility for child care assistance; improve the quality of care itself as well as positions in the sector; and dramatically reduce child care costs for families. ³⁴ This plan does so by providing universal access to preschool programs for children ages 3 and 4 and expanding child care subsidies to all low- and middle-income families composed of anyone earning less than 150 percent of the median income in their state. These subsidies would ensure that no low- or middle-income family pays more than 7 percent of their earnings on child care and provide all families under 75 percent of the state median income with access to free child care.

Comprehensive paid family and medical leave

CAP would also ensure that all families have access to paid leave by budgeting for the enactment of the Family And Medical Insurance Leave (FAMILY) Act.³⁵ Workers should not have to sacrifice their economic security when they need to take time off to care for their family or chosen family. Under this plan, all workers are afforded 12 weeks of paid leave, during which they can earn two-thirds of their monthly wages up to a monthly maximum of $4,000. The legislation fully finances paid leave through a small 0.4 percent payroll tax, evenly split between employers and employees.

Teacher pay

The CAP plan includes a fully refundable tax credit for teachers of high-poverty schools, which would increase teacher pay by as much as $10,000 per year.³⁶ On average, teachers earn just 60 percent of what their counterparts in other professions earn—even when controlling for education and experience. Even more troubling, in 30 states, the average salary