"New Direction for America" Points Toward Higher Taxes, Deficits

(Alexandria, VA) -- The Democratic Party's "New Direction for America" might attempt to steer government toward a sounder financial footing, but its course leads to $79.1 billion in new annual federal spending, according to a line-by-line analysis by the non-partisan National Taxpayers Union Foundation (NTUF). Among the findings:

  • Health care represented the largest spending category at $28.8 billion, or 36 percent of the total agenda. Within this category, Democrats proposed to "fix the Medicare prescription drug program," which would cost $29.5 billion annually. The plan did call for spending cuts amounting to just over $1 billion, in order to "end wasteful giveaways to drug companies."
  • Veterans care was high on the list as well, at $19.8 billion. The initiative to launch a "G.I. Bill of Rights for the 21st Century" would provide increased pay, health care, and other benefits for veterans and their families. This program would increase outlays by $99 billion over 5 years, and would be offset by increasing the top income tax rate.
  • Education spending, at $16.2 billion, represented approximately 20 percent of the total net agenda. The Democratic plan called for increasing the maximum individual Pell Grant to $5,100 ($4.0 billion in total annual spending), recruit science and math teachers ($3.7 billion yearly), and reduce college loan interest rates ($7.4 billion annually), among other items.
  • Yet another proposal called for an "AmeriSave" account system that would establish a dollar-for-dollar federal match for the first $1,000 contributed to a personal retirement plan. This initiative would cost taxpayers roughly $7.5 billion each year.

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 Democratic agenda seeks. For example, the proposal to screen 100 percent of all inbound U.S. cargo will likely raise costs to the federal government, but specific estimates are not available.

"Americans should take note that proposals containing many political promises are likely to contain many tax dollars as well," Brady concluded. "Given that the average House Democrat's agenda in the last Congress would have boosted spending by $521 billion, the 'New Direction for America' may appear to be modest. Many taxpayers, however, are probably hoping that if Democrats take control of Congress, they will somehow find the fiscal responsibility on Capitol Hill that has been lost amongst slabs of pork-barrel spending and IOUs from unfunded program liabilities."

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 Democrat'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.