As campaigns enter the home stretch of Election 2014, NTU Foundation released a line-by-line analysis of how Iowa State Senator Joni Ernst would change the federal budget if elected to the U.S. Senate. Researchers matched quotes from Ernst’s campaign literature and debate appearances with cost estimates for proposed legislation and budget data to compile her full proposed spending agenda. On net, she would decrease annual federal spending by $87.1 billion but the top-line figure is not the whole story.
First, some background on Joni Ernst. She holds a Master of Public Administration degree from Columbus College; as a student, she took part in an agricultural exchange program that took her to the Soviet Union. For 21 years, Ernst has served in the Army Reserves and Iowa National Guard. Currently, she commands the largest battalion in that state’s Guard. She was elected to the Iowa State Senate in 2011, where she has served on five committees: Education, Appropriations, Health and Human Services, Rules and Administration, and Veterans Affairs.
Next, how we score spending. NTUF’s analysis is conducted using data from the BillTally project, which is the nation’s only comprehensive system that scores nearly every bill as introduced in Congress for changes in spending greater than $1 million. We consider how legislation would affect budget outlays, disregarding revenues or other economic effects (tax revenue tends to be more difficult to reliably project, and is highly dependent on macroeconomic trends). Those estimates are used to assign a dollar figure to each candidate’s campaign talking points, if and when they closely resemble existing legislation scored in the BillTally database.
Now, onto NTUF’s findings of Joni Ernst’s agenda. Here are the overall findings (dollars are annualized):
- Gross Spending Increase: $4 billion
- Number of Increase Proposals: 3
- Gross Spending Decrease: $ 91.08 billion
- Number of Decrease Proposals: 5
- Net Proposed Spending Agenda: $87.08 billion
- Change to the Projected FY 2015 Budget Deficit ($469 billion): -18.6%
- Number of Unknown-Cost Proposals: 10
- Total Number of Proposals: 18
Cost Increases
Ernst’s three spending increase items were divided between two policy categories: health care and border security.
Health Care: As part of an alternative to the Affordable Care Act, Ernst calls for lifting restrictions on selling and buying health insurance across state lines. This measure has been introduced in Congress a number of times and the Congressional Budget Office (CBO) scored the policy as a $38 million per-year cost increase. Costs occur because there would be additional oversight and regulations required to govern the different plans, state rules, and insurance companies. She also supports allowing small businesses to self-insure, which means that an employer would directly pay employees’ healthcare costs. Typically, only larger businesses are able to shoulder the risk and costs of these plans, but one bill (also introduced multiple times in Congress) would allow trade, industry, and professional associations to provide coverage to employees of member businesses or groups. Similar to interstate health plan sales, the federal government would require new funds to regulate and oversee the new system, totaling $8 million annually.
Border Security: Ernst has called to secure the borders, establish a guest-worker program, and ensure that those workers are cleared to be in the country. By comparing her statements and provisions in three different immigration reform bills, NTUF scored her proposals as a $4.0 billion annual spending increase, broken down as:
- $3.7 billion for border security (doubling the number of Border Patrol agents, which includes their benefits, training, and forgiving their student loans); and
- $342 million for the guest-worker program (focusing on agricultural workers, issuing tamper-proof cards), including the actual cost of the special cards, which NTUF found would cost the Social Security Administration $27 million for the projected 880,000 participants.
Spending Cuts
On the other side of spending, Ernst’s five cost-reduction measures vary in where they would cut the federal government’s spending. The media has spent a lot of attention on her proposals to eliminate three agencies. NTUF scored each according to her quotes and, to avoid any double-counting, credited the cuts as one-year savings:
- Environmental Protection Agency: -$8.2 billion
- Internal Revenue Service: -$11.3 billion
- Department of Education: Not Scored. According to her statements, Ernst has called for the repeal of the Department at the federal level and for savings (from having fewer federal employees) to go towards shoring up the Highway Trust Fund. Seen as a transfer, it would not reduce overall spending.
The figures above were determined using current spending figures from the FY 2014 federal budget. It is possible that the figures could be less, because it is unlikely that such large entities would be able to shut down in one year; however, there is no additional information available.
Health care is the primary area where Ernst has proposed quantifiable cuts. On her website, Ernst’s campaign wrote that she “supports immediate action to repeal Obamacare …”, which NTUF scored in 2012 as a $36.9 billion annual spending cut. As opposed to how the Congressional Budget Office scored similar repeal measures, NTUF tracked only the changes in spending outlays and did not account for gains or losses in revenues (this is one of the primary features of BillTally). As implementation continues, it is likely that a full repeal of “Obamacare” would result in more reductions.
Additionally, she would push for medical malpractice (or tort) reform. This idea has been a Republican agenda item in the past, introduced in Congress over the past two decades. CBO scored the latest bill as a $3.4 billion savings each year. As malpractice suits would be more limited and penalties capped, health care costs would likely decrease (by doctors practicing less defensive medicine and insurance companies charging smaller premiums), which would reduce spending for federal health programs.
Unknown Cost Items
Continuing a trend in House, Senate, and Presidential elections, Ernst made ten comments or statements that were too broad to be quantified in our study. This detail deficit represents 55 percent of her total budget-influencing agenda and could significantly affect the federal budget in a number of ways.
For the purposes of NTUF’s study, spending could be ramped up or down, depending on exactly what she means to do with these platform points. For instance, Ernst said that “we need to shutter Fannie Mae and Freddie Mac”, which are multi-billion dollar government-sponsored housing enterprises. Though the measure would decrease spending over the long term (fewer mortgages being backed by tax dollars), she did not say how quickly she would want to shut them down, which matters when considering which legislation to match with her statements. A bill that NTUF referenced with her quote would shut down Mae and Mac but five years after enactment (in order to allow them time to scale down their operations). It is unclear if she would support that plan or a more accelerated one.
Ernst has also pledged to reform the veterans benefits system but has not offered details regarding exactly what the action would involve. The government has already dedicated $294 million to help the Department of Veterans Affairs reduce the claims backlog, upgrade IT systems, and increase employee training, along with $12.6 billion to upgrade their health care system and facilities. Though there are many related proposals that have been introduced in the 113th Congress, it remains to be seen specifically what Ernst would do.
To help taxpayers get a full picture of Ernst’s agenda, I have five questions for her:
- Regarding government housing programs, would you seek to close Fannie Mae and Freddie Mac within five years (like in the Protecting American Taxpayers and Homeowners Act) or do you have a different timeframe in mind?
- Considering fundamental tax reform, do you support Congressman Dave Camp’s “Tax Reform Act,” a flat tax, a Fair Tax, or another proposal? Please be specific.
- You have said that you want to “offer tax credits to those who purchase their [health] insurance privately.” Do you have a specific proposal in mind and would those credits be refundable?
- Could you provide more details regarding your proposal to eliminate wasteful defense spending and do you have a target savings amount with these efficiencies?
- Over the course of your campaign, you have said that you are open to different options in reforming the Social Security system. Do you now have a more clear idea of what that would entail? If so, what measures would you support or oppose?
To learn more about the Senate race in Iowa, check out NTUF’s Election resources: