"Moderate" Agenda for America Comes with Steep Price Tag

(Alexandria, VA) -- The Democratic Leadership Council's (DLC) new "American Dream Initiative" might attempt to chart a third way for Democratic politicians, but its path leads to $31 billion in new annual federal spending and $250 billion in new taxes, according to a line-by-line analysis by the non-partisan National Taxpayers Union Foundation (NTUF). Among the findings:

  • Taxpayers should immediately take notice of a $250 billion tax increase over ten years. The American Dream Initiative seeks to obtain new capital gains revenue from securities firms, along with the sale of assets. This quarter-trillion dollar boost would rank among the major tax hikes in American history.
  • Of the 22 items with a possibly quantifiable budget impact that NTUF identified in the initiative, 13 would increase federal spending while only 1 would reduce outlays (the remaining items mentioned policy initiatives with an unknowable cost).
  • The single largest spending hike presented was a $15 billion-a-year "American Dream Grant" to provide federal block grants to states for students pursuing graduate study (the estimate includes only the impact on spending, not on revenues). The DLC's second priciest agenda item creates a "National Center for Cures" to encourage better communication between private sector research firms and the National Institutes of Health. This would cost $5 billion annually.
  • The lone item to reduce federal outlays would be achieved by "cutting 100,000 federal consultants and contractors." The DLC claims this would save $50 billion over 10 years.

NTUF Senior Policy Analyst Demian Brady, who conducted the review, noted that several of the "cost unknown" items could significantly affect the net total spending increase the DLC seeks. For example, one of the main planks of the initiative is to "allow the U.S. Department of Health and Human Services to negotiate lower prices on behalf of Medicare beneficiaries." According to the Congressional Research Service, "the magnitude of the discount the federal government might be able to negotiate is uncertain." Other items, such as rooting out improper payments and increasing government's transparency could be beneficial to taxpayers, while "smart economic investments" for research would create new costs.

"Taxpayers should remain wary of spending proposals that are high in rhetoric and even higher in price," Brady concluded. "Given that the average House Democrat's legislative agenda in the last Congress would have raised annual spending by $521 billion, the DLC's American Dream Initiative may appear to be modest. Many taxpayers, however, are probably hoping that if Democrats take control of Congress next year, they will find a "fourth way" that shuns new taxes, avoids more borrowing, and restrains outlays."

Since 1991, NTUF has tracked the fiscal impact of proposed legislation through BillTally, an accounting database that reports the "net annual agenda cost" for each Member of Congress based on sponsorships and cosponsorships of pending legislation. For this analysis, NTUF matched the DLC's proposals with those in the BillTally system and other third-party sources.

NTUF is the research affiliate of the 350,000-member National Taxpayers Union, a non-profit citizen group founded in 1969.