Elizabeth Warren has lots of plans and together, they would remake the economy
WASHINGTON — As the 23 candidates seeking the Democratic nomination struggle to distinguish themselves, Sen. Elizabeth Warren of Massachusetts has set herself apart with a series of sweeping proposals that would significantly remake the American economy, covering everything from tax policy to student debt relief and offering a detailed portrait of what her presidency might look like.
Many of the proposals from Ms. Warren, a former Harvard law professor and hawk on financial regulation, could face a difficult path to winning over moderates in a general election, and to gaining approval in Congress if she did take the White House. But the sheer volume of her plans, and their detail and variety, is forcing her rivals to play catch-up and stake out their own positions.
Her proposals would tip power from executives and investors to workers and allow the federal government to more aggressively steer the development of industries. She has called for splintering technology companies, like Amazon, that millions of consumers rely on in their daily lives. She would reduce the rewards for entrepreneurs to build billionaire fortunes and for companies to create global supply chains, scrambling the incentives for work, investment and economic growth.
Ms. Warren would seek big tax increases on the wealthiest individuals and corporations, creating a new tax on household assets that exceed $50 million as well as a new tax on corporate profits. From those two steps alone, she says she would raise at least $3.8 trillion over a decade — money that would go toward her plans on student debt cancellation, free college, child care, the opioid crisis and green manufacturing.
A review of the policy rollouts the 2020 Democrats have made since entering the race shows that Ms. Warren has issued the largest number of detailed plans among the major candidates — roughly 20 in all, on subjects as varied as Big Tech regulation, housing costs and Pentagon contracting. Most of her rivals have released fewer than half a dozen; former Vice President Joe Biden, who leads in early polling, has issued only two.
But Ms. Warren has already drawn criticism from centrists and conservatives who say her plans — many calling for new regulations — would hurt business and the economy, stifle innovation and potentially harm the very workers they were intended to help. “Were they to get done, they would cause significant problems,” said Tony Fratto, a former Treasury official in the George W. Bush administration who is a partner at Hamilton Place Strategies in Washington.
By pushing out so many proposals so early, Ms. Warren has framed much of the debate in the Democratic primary race, aiding her own rise in the polls.
“It’s rare, at this stage of a presidential campaign, somebody distinguishes themselves by the boldness and detail of their policies,” said Robert B. Reich, who served as labor secretary under President Bill Clinton. “She is asking the biggest questions that exist, and that is: How do you make a free market work? How do you make capitalism actually work for the many rather than the few?”
Ms. Warren is hoping that her ambitious agenda will win over Democratic primary voters, and that her emphasis on protecting American workers will have crossover appeal in a general election. But President Donald Trump and his Republican allies would almost certainly use her proposals to portray her as too extreme.
Like other Democrats running for president, she would need her party to not only keep the House next year but also take control of the Senate, a difficult feat, to have any chance of pushing the bulk of her agenda through Congress. Even then, her transformative policies would surely face fierce resistance. In the House, she would face overwhelming opposition from Republican lawmakers as well as misgivings from the sort of centrist Democrats who helped deliver the majority last year. And Senate Republicans would be positioned to block many of her proposals using the filibuster, a tactic that Ms. Warren has said should end but that still enjoys bipartisan support.
Some of the policy ideas Ms. Warren has promoted in recent months have been hallmarks of her political career. A bankruptcy expert who helped create the Consumer Financial Protection Bureau, she has long pushed Democrats to embrace more structural changes to the economy, even at the risk of putting off wealthy donors.
But Ms. Warren’s advisers have also seen the policy rollouts as an opportunity to put pressure on other campaigns and steer the party’s center of gravity leftward.
party’s center of gravity leftward. They were keen to announce her student debt cancellation proposal before any other rival’s, partly to claim that turf as their own.
They have also carefully structured the order of her policy announcements, beginning with the “Ultra millionaire Tax” that provided a built-in answer to the question, “How will you pay for it?”
Now, other Democratic campaigns are being measured against Ms. Warren’s policy benchmarks. In a night of back-to-back CNN town-hall events in April, every candidate faced a question that related to a proposal from Ms. Warren.
Ms. Warren’s agenda includes a plan to cancel up to $50,000 in student loan debt, depending on a borrower’s income, and to eliminate tuition at public colleges. She has proposed a universal child care system that would be free for low-income families and limit other families’ costs to 7% of their income. And last week, she offered a broad economic program to promote American exports and spur job creation.
As part of that program, Ms. Warren called for a $2 trillion federal investment in climate-friendly industries and suggested other steps like more actively managing the value of the dollar.
Her ideas resonate with a growing group of liberal economists who see evidence that free markets need more forceful government intervention in order to function properly and not just deliver spoils to the very wealthy.
Fans of Ms. Warren’s proposals say they would help the economy by attacking income inequality: New taxes on the rich would fund investments in workers and encourage companies to spend more on wages and strategic investments than on executive pay.
They say that her aggressive use of antitrust regulation would unleash more competition and dynamism in an economy increasingly dominated by incumbent businesses, that her industrial policies would help the United States capture global market share in emerging industries like clean energy and that her spending on child care would encourage more Americans, particularly women, to work.
“You’re going to change norms, you’re going to change the way people act and the things they do with that money,” said Heather Boushey, the executive director at the Washington Center for Equitable Growth and a former top adviser to Hillary Clinton’s 2016 presidential campaign. “I can only imagine the kind of innovation and productivity it would unleash in our economy.”
Critics say Ms. Warren — with her proposals for new business regulation and focus on encouraging companies to locate production in the United States, rather than seeking the lowest-cost and most efficient production hubs around the world — will hinder American companies as they attempt to sell into India, China and other developing nations.
“To me that is the biggest risk in this, that you hobble American corporations so they cannot be globally competitive,” Mr. Fratto said. “We want these companies to compete globally.”
Ms. Warren would also risk hurting consumers by breaking up technology companies, particularly Amazon, said Natasha Sarin, a University of Pennsylvania economist who favors many of Ms. Warren’s goals but has written skeptically about her proposed wealth tax. She said taxing wealth could discourage innovation and risk-taking by entrepreneurs who invest time in their ideas hoping for a large payoff down the road.
Ms. Warren would impose a 2% annual tax on a household’s assets, including stocks and real estate, that exceed $50 million. She would add another 1% tax on assets above $1 billion. Some other advanced countries, like Spain, impose similar taxes. But the United States never has, and some experts question whether Ms. Warren’s plan is constitutional. Some economists, including Ms. Sarin, say the tax would struggle to raise the revenues Ms. Warren forecasts, because it is relatively easy for the ultrawealthy to hide or shield assets from taxing authorities.
Ms. Warren’s campaign has amplified the impact of her policy rollouts by timing many of them to campaign trips. She unveiled her broad economic program and her green manufacturing plan ahead of a visit to Michigan and Indiana. She issued a proposal on public lands before visiting Colorado and Utah. Her opioid plan came before a visit to West Virginia and Ohio.
Policy makes up a large part of Ms. Warren’s pitch to voters on the campaign trail, where, from school gyms to house parties, she guides audiences through one proposal after another. She explains her wealth tax by likening it to the property tax paid by homeowners, only broadened to include the “diamonds, the stock portfolio, the Rembrandts and the yachts” of the superrich.
“Right now in America, there is a real hunger,” Ms. Warren said at a Democratic Party event in Iowa last Sunday. “There are people who are ready for big, structural change in this country. They’re ready for change, and I got a plan for that.”
Though Ms. Warren has far outpaced her major rivals in issuing detailed policy plans, some are working to make up ground.
In just one day recently, Sen. Cory Booker of New Jersey offered a housing plan that would provide a tax credit to renters, former Rep. Beto O’Rourke of Texas introduced a voting rights plan and Sen. Kirsten Gillibrand of New York issued a plan to legalize marijuana.
Mr. Biden — who entered the race in late April, four months after Ms. Warren — introduced a climate plan recently and an education plan earlier this month. Sen. Kamala Harris of California has put forth plans on teacher pay, gun control, equal pay and abortion. Sen. Bernie Sanders of Vermont has issued plans about education, rural America and banking.
Mr. Sanders, like other senators in the presidential race, is also drawing on legislation he has proposed in Congress, most notably his “Medicare for all” bill.