Massachusetts Sen. Elizabeth Warren announced in Dec. 2018 that she would run for the 2020 presidency, pushing for sweeping "big, structural change." However, in March 2020, she ended her campaign for president.
"Our country is in a time of crisis—the time for small ideas is over," she said in June 2019 at the California Democratic Convention. "The entire structure of our system has favored the rich and the powerful, pick any issue you care about and it is painfully obvious."
According to the 71-year-old Harvard Law School professor famous for grilling bank executives and spearheading the creation of the Consumer Financial Protection Bureau (CFPB), America's problems, like gun violence and the racial wealth gap, were all connected to one thing, "power concentrated in the hands of the wealthy and the well-connected."
Warren's message during her campaign for president was: the system is rigged and it must be broken and remade. Once seen as a radical philosophy, the direction did garner some support from those disappointed in other Democratic leaders.
To Warren, the single biggest structural change America needed was a more equitable, safe, and prosperous society is of its financial and economic system.
Big, Big, Big
Warren has coined the term "economic patriotism" to describe a government prioritizing the interests of regular workers and middle-class people over those of the financial sector and giant, multinational corporations.
"For decades, Washington has lived by a simple rule: If it’s good for Wall Street, it’s good for the economy," she wrote in a Medium post arguing that the financial sector has been sucking value out of the economy instead of benefiting it.
Warren planned to target private equity firms so they'd be "on the hook" for bad investments instead of exiting with tidy profits, expand postal banking for underserved families, and appoint Fed governors that would introduce a real-time-payment system for everyday transfers even if it hurt large banks.
Warren also sought new executive compensation rules for the banking industry and a reenergized Financial Stability Oversight Council to monitor and curb leveraged corporate lending that has reached record levels. The current "carried interest loophole" allows investment fund managers to count carried interest, or their share of the fund's profit, as capital gains for taxation, and Warren planned to close it. This is something former President Donald Trump pledged to do as well.
Warren also promised to go after powerful monopolies in the tech, banking, and agricultural sectors by reversing anti-competitive mergers, passing legislation so that large tech platforms like Alphabet Inc.'s (GOOG) Google Search and Amazon.com Inc.'s (AMZN) Marketplace were legally considered platform utilities, breaking up vertically integrated agribusinesses like Tyson Foods(TYSN), and pushing for the passing of her 21st century Glass-Steagall Act, which would prevent investment banks from accessing taxpayer-subsidized insurance.
Household Debt and Welfare
Warren sought to slash household debt by raising wages and bringing down costs like rent, health care, child care, etc. She advocated raising the federal minimum wage to $15, closing the race and gender pay gap, and empowering workers by supporting unions and allowing them to elect at least 40% of board members at large U.S. corporations.
Warren also introduced a bill that would cancel $640 billion of the current student loan debt, helping 95% of the 45 million people burdened. She also looked to make tuition free at all public technical schools, two-year colleges, and four-year colleges.
Since the debt ceiling is a dogged concern, Warren said she'd get rid of it or have it automatically increase based on the government's spending decisions. Warren also advocated for a single-payer, Medicare for All system as was proposed by rival Sen. Bernie Sanders. She said it would cost $52 trillion over a decade, including $20.5 trillion of new federal spending, and save Americans $11 trillion over the same period. Providers, like doctors and hospitals, would have received smaller payments and brought down drug prices.
Trade and Manufacturing
While Trump's strategy for helping U.S. trade and manufacturing was quite simplistic and focused on fixing trade deficits with tariffs, Warren advocated for America's trade policy to be dictated by the need to protect workers, farmers, and the environment.
"America enters into trade negotiations with enormous leverage because America is the world’s most attractive market," she wrote in another Medium post referencing economic patriotism. "As President, I won’t hand America’s leverage to big corporations to use for their own narrow purposes — I’ll use it to create and defend good American jobs, raise wages and farm income, combat climate change, lower drug prices, and raise living standards worldwide."
What would have looked like in terms of policy? Transparent trade negotiations with more involvement of the public, representatives from labor, environmental, and consumer groups on advisory committees, labor and environmental standards for trade partners, a multilateral agreement to protect domestic green policies from WTO challenges, border carbon adjustment, reduced exclusivity periods for drugs in trade deals, fair prices for American goods and country-of-origin labeling rules, enhanced border inspection requirements for food imports, ending Investor-State Dispute Settlement (ISDS), laws ensuring imposed duties benefit workers, and a new federal office to promote American clean energy products abroad, etc.
When it comes to manufacturing, Warren proposed a Green Manufacturing Plan that would have had the government invest $2 trillion over ten years in green research, manufacturing, and exporting.
Paying for It
Warren's Green Manufacturing Plan would have been paid for with a Real Corporate Profits Tax that would prevent corporations from abusing loopholes. Under that plan, large U.S. companies that reported more than $100 million in profits (domestic and foreign) to investors would be charged 7% on every dollar of profit above it in addition to its liabilities under the tax laws. Research by University of California-Berkeley economists cited by Warren's campaign said the tax would have raised $1 trillion in ten years.
When it comes to her health care plan, Warren promised "not one penny in middle-class tax increases." A new Employer Medicare Contribution program would have raised $8.8 trillion and companies would have spent 98% of the amount they usually spend on employee health insurance to the federal government. Businesses with less than 50 employees would have been exempt unless they already paid for health care, and large companies with extremely high executive compensation and stock buyback rates would have contributed more.
The rest of the money would have been raised through a variety of ways, such as better tax enforcement, tax on the higher take-home pay of employees, a tax on financial transactions, fees on large banks, a minimum 35% tax on foreign corporate earnings, eliminated accelerated depreciation of assets of companies, and a wealth tax.
Warren's proposed Wealth Tax legislation was a new concept to most Americans. Essentially an additional tax of 2% to 6% on household net worth over $50 million would have raised $3 trillion over ten years and affect 0.1% of the population. Enforcement would have required additional investments in the Internal Revenue Service (IRS).
The Bottom Line
Although Warren was an underdog by most standards, Warren's campaign did gain some ground. She came in second place in the October-November of 2019 YouGov, NBC News/Wall Street Journal, and Fox News polls. A July 2019 PerryUndem survey of close to 2000 Democrats reported on by Vox suggested that the strongest candidate in the party is Warren. However, Warren dropped out of the presidential race in March 2020. Even though she failed in her bid to win the Democratic primary, some of her more popular ideas may be adopted by other candidates in the future.