Democrats face rising costs for post-election social programs

Restoring Medicaid and food aid would cost $2.2tn

Democratic lawmakers elected in the recent sweep have called for restoring Medicaid, food assistance and subsidized health insurance. The new Democratic class has also backed Medicare for All and programs for children and their parents. In The Guardian’s Nov. 11 analysis, Eduardo Porter wrote: “The post-election wish list is about to run into harsh fiscal reality: there is no money.”

Porter said the new Democratic class could spend less time settling grievances and more time repairing the safety net. He framed the election as a possible shift away from the low-tax, limited-solidarity politics associated with Ronald Reagan and toward equitable prosperity. The election’s broad rejection of the Maga brand could open that path, Porter said, while early odds suggested a Democrat might win the presidential election in two years. He also argued that the existing safety net has allowed the deepest poverty in the affluent world.

The analysis placed the proposals against a federal deficit running at about 6.2% of GDP. Federal debt reached $40tn, more than 120% of GDP, and interest payments cost some 3.2% of GDP, or about $1tn, more than national defense spending. The October deficit, the first month of fiscal 2027, reached $409bn.

The Congressional Budget Office projects that debt and interest payments will continue to grow faster than the economy over the coming decades. Porter said meeting the new spending proposals would require taxes or other changes to federal spending, and that the taxes needed to fill the budget gaps would exceed anything achieved in recent memory.

The Center on Budget and Policy Priorities estimated that restoring Affordable Care Act insurance subsidies from 2030 to 2039 would cost $460bn. It estimated separately that undoing Donald Trump’s cuts to Snap and Medicaid, which partly funded tax cuts in the One Big Beautiful Bill Act, would cost $2.2tn over the same decade.

Brendan Duke, CBPP’s senior director for federal budget policy, said, “Reversing the harms is going to be very expensive.” Those estimates come as the budget must also address Social Security. Its trust fund is scheduled to run out of money in less than six years, which by law would trigger an automatic 22% cut in benefits; fixing the trust fund would require more money.

Porter also said artificial intelligence may further complicate the fiscal picture by burdening the safety net with potentially millions of workers displaced by technological change. Historian Bruce Bartlett, who advised Ronald Reagan on budget policy, argued that Republican administrations have used tax cuts to constrain future Democratic administrations and the budgets they would inherit.

Trump’s One Big Beautiful Bill Act is expected to add between $4.1tn and $5.5tn to federal debt over 10 years, depending on whether a future Congress makes temporary tax cuts permanent. The analysis said Congresses have usually made such cuts permanent. Bartlett said the legislation would “make sure the next Democratic president is a complete and total failure.” Porter said the choices over the expiring provisions would test whether Democrats were willing to fight for the cost of a new social contract.

The last time a government with any Republican in power delivered a tax increase was in the 1990s, when George H.W. Bush was president and Congress was Democratic. Bush lost reelection to Bill Clinton. Porter said the episode reflected a broader trend: Democrats have raised revenue when they held the presidency and Congress, but the trend suggests those opportunities are fading.

Clinton’s 1993 tax increases are estimated to yield the equivalent of $3.3tn over 2030-2039, adjusted for inflation, and helped produce the first federal budget surplus since the 1960s. Porter noted that the revenue was ultimately spent on a tax cut by Clinton’s successor, George W. Bush.

Barack Obama’s Affordable Care Act raised the equivalent of $1.1tn over 2030-2039 in inflation-adjusted dollars, though Obama also made permanent some of George W. Bush’s tax cuts. Joe Biden’s original Build Back Better Act, passed by the House, would have raised the equivalent of $2.3tn over the same window, but the Senate rejected it and authorized only about $700bn in the Inflation Reduction Act.

Total U.S. tax revenue is less than 26% of GDP, according to the analysis. That is 9 percentage points below Britain, 9.5 points below Canada, 12.5 points below Germany and 16 points below Sweden. Porter said matching the tax take of other rich countries may be an impossibly high bar, leaving the amount of revenue needed dependent on how far Democrats pursue their proposed programs.

Several provisions in Trump’s One Big Beautiful Bill Act are set to expire in the next couple of years: exemptions on income from tips and overtime, a new deduction for seniors and an increased deduction for state and local taxes. The Center on Budget and Policy Priorities said those cuts offer little benefit to people at the bottom of the income distribution, while extending them would cost about $1.2tn over the 10-year window. Porter framed that choice as the test of whether the country is ready for a new social contract.