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Calif.’s Health-Care-for-All Likely to Increase Income Gap, Immigration

'We can debate the policy. If someone says, ‘How are we going to pay for it?’ Well, those are two different issues now...'

(Headline USA) California lawmakers on Tuesday will start debating whether to create the nation’s first universal health care system in a key measure of whether the proposal will muster the support it needs to pass this year—and be sent to voters who would decide whether to approve the payment method.

The state’s radical progressives have tried for years to create a government-funded universal health care system to replace the one that relies on private insurance.

In addition to covering the state’s low-income citizens, the proposal advocated by leftist Gov. Gavin Newsom also would cover the health costs for illegal immigrants, Fox News reported.

The implications could be disasterous, particularly when paired with the Biden administration’s current open-borders policy.

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The new lure for non-citizens could help California to offset its recent population losses by replacing middle-income residents who are fleeing the high costs and excessive regulations with a new sub-class of peons subsidized entirely by the state’s ultra-wealthy elites.

Depending on whether Trump-era court rulings are again challenged that allowed illegals to be counted in the 2020 census, it could also increase California’s political clout and ability to draw federal funds, while undermining the voting power of legal residents in other states and forcing them to subsidize the profligate spending policies.

California voters overwhelmingly rejected a 1994 ballot initiative that would have created a universal health care system. Another attempt passed the state Senate in 2017, but it died in the state Assembly with no funding plan attached to it.

This year, state Assembly Democrats have filed two bills. One would create the universal health care system and set its rules, and the other would lay out how to pay for the coverage with increased taxes for some wealthier people and larger businesses.

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The first bill will be heard by the Assembly Health Committee, headed by Chair Jim Wood, a Democrat who has already said he will vote for it. Because the proposal was introduced last year, it must pass the state Assembly by the end of January to have a chance at becoming law this year.

The prototype of the plan would appear to mirror the claims by the Biden administration that its socialized “Build Back Better” spending would be covered by soaking the rich. In reality, however, those financial burdens are likely to trickle down to middle-class consumers, either directly through the tax code or indirectly through the free market.

Universal health care has been debated for decades in the U.S., most recently during the 2020 Democratic presidential primary, when it was promoted by U.S. Sen. Bernie Sanders, I-Vt.

But it has never come close to passing in Congress. State lawmakers in Sander’s homestate of Vermont have tried and failed to implement their own universal health care system. And the New York state Legislature has considered a similar plan.

Supporters in California are adopting a divide-and-conquer strategy this year. They hope that separating the idea of a universal health care system from the question of how to pay for it will give them a better chance of getting the bills passed and eventually winning voter approval.

“We can debate the policy. If someone says, ‘How are we going to pay for it?’ Well, those are two different issues now,” said Assemblyman Ash Kalra, a Democrat and the author of both proposals. “If we can agree on a policy and get that policy passed, then it becomes more real. Then you are actually telling the voters what they are voting for. That’s really important.”

Opponents are determined to keep the proposed health care system and its funding method linked during the debate.

“In the Health Committee, I look forward to a robust discussion on the impacts of socialized medicine in California, including: how much taxes will increase on the middle class,” Assembly Republican Leader Marie Waldron said.

The plan for California universal health care requires at least a two-thirds vote in both houses of the state Legislature ahead of voter approval in a statewide election.

Democrats have large majorities, but getting all of them to support the tax increases required to pay for the plan will be difficult.

The California Taxpayers Association, which opposes the plan, says it would raise taxes by $163 billion per year on businesses and people.

Meanwhile, with state tax revenues at an all-time high, Newsom on Monday proposed a budget that would cut taxes for the time being, while also covering immigrants’ health care.

According to the budget, it will cost state taxpayers about $2.2 billion per year to cover the cost of health care for the state’s low-income immigrants. Meanwhile, Newsom’s tax cuts would reduce revenue by more than $6.5 billion.

But the Democrat administration insists the numbers still balance because California has a projected $45.7 billion surplus, driven by incredible growth in tax collections during the pandemic.

California taxes the wealthy more than people with lower incomes to the point that, in 2019, the top 1% of earners paid nearly 45% of all the state’s income tax collections.

That top 1% has only gotten richer during the pandemic. While California has the highest unemployment rate in the country, it is on pace to collect at least $25 billion in capital gains taxes in 2021, the most ever. A “capital gain” is income that comes from selling an asset, like a stock, and is how most wealthy people make their money.

“We have the capacity to invest in our growth engines, invest in the future, as well as make sure that we prepare for the uncertainties that the future presents.” Newsom said, touting his plan to put $34.6 billion in reserves.

California taxpayers already pay the health care costs for low-income immigrants 26 and younger and the state plans to cover people 50 and older this May. Newsom’s proposal would cover everyone else starting in January 2024.

Immigrant activists have been pushing for this since the federal Affordable Care Act took effect in 2014. That dramatically reduced the number of people in California without health insurance.

“The glaring gap was those who were left out because of immigration status,” said Sarah Dar, director of health and public benefit policies for the California Immigrant Policy Center.

Newsom’s plan, if it becomes law, would cover nearly 700,000 additional people.

California Health and Human Services Secretary Mark Ghaly said the state already supports these people through charity, emergency and other forms of free care, and that officials believe insuring this population, over time, will reduce these costs.

The biggest tax cut would be for businesses. At the start of the pandemic in 2020, California temporarily raised taxes on businesses to help offset what they thought would be a huge deficit. Instead, California posted record surpluses.

That tax increase was scheduled to expire at the end of this year. Newsom wants to to end it one year early, which would cost the state about $5.5 billion in revenue.

But the tax cut that will get the most attention is at the pump, where Californians are paying the highest gas prices in the nation.

California taxes gasoline at 51.1 cents per gallon. That tax is scheduled to increase on July 1 because of inflation.

Newsom wants to halt that increase, at least for this year. Doing so would cost the state about $523 million in revenue for things like roads and bridges. But Newsom says the state can cover that loss with its surplus.

Last year, California spent billions of dollars on stimulus checks, with most people getting about $1,000 in addition to the federal stimulus package. This year, Newsom wants to give $1,000 to every low-income family that has a child age 5 or younger.

The state did this last year, but families with no incomes weren’t eligible. This year, Newsom wants to also give that money to families with no incomes. That would cost about $55 million a year.

He also wants to give $1,000 to people who have come through the state’s foster care system but are still 25 or younger. That would cost about $20 million.

But it’s possible California could again hand out stimulus checks (i.e tax refunds) to residents this year.

Newsom said revenues are growing so quickly that the state is projected to exceed a constitutional spending limit by about $2.6 billion. If that happens, the state could give some of that money back to taxpayers.

Newsom cautioned that the spending limit calculations are complex, saying the figure will change substantially by May when he updates his proposal before lawmakers vote on it.

“There likely will be substantial contributions back to the taxpayers,” Newsom said. ”In what form they come in, we’ll work with the Legislature.”

Newsom’s proposal now heads to the state Legislature, where Democrats have majorities so large they can pass any spending plan without Republican votes.

Several Democratic leaders issued statements on Monday praising Newsom’s plan but pledging to work with him over the next month on changes.

For example, Newsom is asking the Legislature to pass a law giving workers more paid time off if they get sick from the coronavirus. California had a law like this last year, but it expired in September.

Last year, companies could get reimbursed from the federal government for money they paid workers who took time off for the coronavirus. But the federal government isn’t doing that anymore.

Assembly Speaker Anthony Rendon, a Democrat from Los Angeles, said if California requires companies to give workers more paid time off, the state should help them pay for it.

“I support augmenting the Governor’s budget to add state funding for this purpose, and we have already had a productive discussion on this,” Rendon said.

Senate Republican Leader Scott Wilk praised Newsom for proposals like halting the gas tax increase, boosting law enforcement spending to investigate and prevent retail theft and cutting taxes for businesses. But in general, Republicans criticized Newsom for throwing money at the state’s problems.

“The mentality that success is defined by how much is spent instead of by real, measurable, and actual results is mindboggling,” said Vince Fong, the Republican vice chair of the Assembly Budget Committee. “Californians are living a different reality seeing problems only getting worse.”

Adapted from reporting by the Associated Press

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