Where Clinton and Sanders stand on top economic issues
He may not have won the whole event, but Bernie Sanders provided the most memorable line of the recent CNN debate among Democratic presidential candidates. "Congress doesn't regulate Wall Street," he said. "Wall Street regulates Congress." The audience roared.
What to do about Wall Street, if anything, is probably the one economic issue Sanders and his rival Hillary Clinton disagree on the most. Clinton's economic plans fall in the same center-left band as those of President Obama, whom she generally praised during the debate. Her upstart challenger Bernie Sanders, who describes himself as a “Democratic socialist,” is further to the left, pressing for new constraints on Wall Street banks and sharply higher taxes on the wealthy. The other three candidates—Martin O’Malley, Jim Webb and Lincoln Chafee—generally fall between Clinton and Sanders, and they did little to distinguish themselves during the debate.
Since Clinton and Sanders form the bookends for the range of economic policies backed by the Democratic candidates, here’s where they stand on 8 top issues:
Reining in Wall Street. Sanders wants to reinstate the old Glass-Steagall Act, which was repealed during Bill Clinton's administration and would put strict new limits on the risks banks can take if it were to rise from the dead. Clinton disagrees with Sanders on Glass-Steagall, saying the biggest risks aren't conventional banks but the hedge funds, private-equity firms and other businesses that constitute the "shadow banking" system and evade much of the regulation aimed at banks. In the debate, the other Dems charged Clinton with being too cozy with Wall Street, though Yahoo Finance pointed out recently that Clinton has so far nabbed very few rich donors from Big Finance.
Minimum wage. As Sanders pointed out in the debate, he favors a huge hike in the minimum wage from the current federal floor of $7.25 to $15. Clinton favors something closer to $12, which is higher than Obama’s call for a $10.10 minimum wage. Even so, strong opposition from business interests in Washington makes a sizable hike in the federal minimum wage highly doubtful.
Worsening income inequality. Every Democrat bemoans this, yet solutions are evasive. Clinton’s plan involves more government spending on infrastructure and traditional stimulus measures, targeted tax cuts for middle-class families, modest tax hikes on the wealthy, and enhanced profit-sharing plans that would allow workers to prosper more when their employers do. Sanders would go further in just about every regard, with one example being $1 trillion in new spending on roads, bridges and the like that the candidate says would create 13 million new jobs in 5 years.
Tax reform. Clinton’s plan includes closing loopholes that mainly benefit the wealthy, such as the carried-interest provision that helps the partners at private-equity firms and hedge funds boost their take-home pay. Sanders’ would go after the wealthy more aggressively, including a higher income-tax bracket for the highest earners, a new tax on inheritances above $3.5 million, and a new tax on “Wall Street speculators.”
Trade. Sanders opposes the Trans Pacific Partnership, which President Obama is now trying to get Congress to approve. Sanders would also roll back other trade deals such as NAFTA, generally favoring a more protectionist economy. Clinton, more amenable to free-trade deals, used to back the TPP but now opposes it -- a flip-flop her Republican critics are eager to highlight, even if her Democratic challengers don’t.
College costs. A hallmark of Sanders’ economic plan is free tuition at public universities, along with sharp cuts in interest rates on student loans needed to help pay room and board and other expenses. The unspecified new tax on Wall Street speculators would pay for this. Clinton wouldn’t go quite as far, but she does favor new government spending to lower tuition costs at public schools so that a typical student can pay for college without taking on debt.
Healthcare. Forget private health insurance. Sanders would impose a national single-payer healthcare program he describes as “Medicare for all.” Clinton would leave the current system intact, while improving on Obama’s healthcare reforms by lowering out-of-pocket expenses such as deductibles and co-pays, which have soared in recent years.
Immigration. Sanders would establish a pathway to citizenship for the estimated 11 million illegal immigrants in the United States, while loosening other immigration policies. Clinton is basically with Sanders on this one. She also favors a path to citizenship, and she’d expand other avenues for foreigners to obtain U.S. citizenship. That way, important votes lie.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.
