01:36 - Source: CNN
Warren's clash with Treasury official gets heated
CNN  — 

Sen. Elizabeth Warren rolled out a multifaceted plan on Tuesday that offers new insight into how she would implement the Green New Deal – a sweeping climate change proposal that has grown increasingly popular among progressives – ahead of a two-day Midwest presidential campaign swing aimed at repudiating President Donald Trump’s economic policies.

With multiple stops planned this week in Michigan and Indiana – two states that Trump won in 2016 – the Massachusetts Democrat announced that the next phase of her campaign will highlight the theme of “economic patriotism.” In one of two Medium posts published Tuesday morning, Warren described the idea as “using new and existing tools to defend and create quality American jobs and promote American industry.”

Promising to release multiple proposals in the weeks to come, Warren on Tuesday unveiled the first in the series, dubbed the “Green Manufacturing Plan.”

It outlines how she would begin implementing the Green New Deal, a youth-led campaign to fight climate change by transitioning the American economy away from fossil fuels while beefing up workers’ rights.

“While much of the debate around the Green New Deal has focused on the path to aggressive reductions in domestic greenhouse gas emissions, the science is clear: even if we reduce America’s emissions so that they are net-zero by 2030, we will still fall far short of the reduction in global emissions needed to avert a climate crisis,” Warren wrote. “To satisfy this global need, we need rapid innovation on par with the space race along with widespread domestic and international adoption of clean, renewable, and emission-free energy technology.”

Like the activists, Warren frames the proposals as modern-day versions of popular – at least in most Americans’ memories – programs from the mid-20th century. There is a Green Apollo Program, a Green Industrial Mobilization (with references to a “World War II-era commitment to purchasing military items”) and a Green Marshall Plan.

The Green Apollo Program, Warren wrote, would require investments in “innovative science” like those used “to win the race to the moon” and the creation of a National Institute for Clean Energy. The price tag would be $400 billion over the coming decade “for clean energy research and development – more than ten times what we invested in the last ten years.”

Her Green Industrial Mobilization would commit $1.5 trillion over the same period “to purchase American-made clean, renewable, and emission-free energy products for federal, state, and local use, and for export.” To be eligible for the handsome federal contracts, companies would be required to pay workers at least $15 an hour, offer paid leave and take no steps to dissuade unionization efforts.

The Green Marshall Plan, like its predecessor, would be used – at a cost of $100 billion – to facilitate similar efforts around the world by marketing “American-made clean, renewable, and emission-free energy technology abroad,” much like the country now promotes the sales of military weapons to allies.

“If we can aggressively intervene in markets to protect the interests of the wealthy and well-connected – as we have for decades with bailouts and subsidies – then we can damn well use all the tools at our disposal to protect the interests of American workers,” she wrote.

Warren wrote that the significant costs attached to her plan – $2 trillion over 10 years – would be mostly paid for by new revenue created by her Real Corporate Profits Tax, which is described in an analysis provided by the campaign from Moody’s Analytics chief economist Mark Zandi as “a 7% tax surcharge on profits of more than $100 million earned by U.S. companies.”

In his review, Zandi judged on the basis of Warren’s plans that if they were implemented as sketched out they would ultimately result “in a stronger economy.”

“The multipliers on the increased government spending – the change in GDP due to a change in government infrastructure and R&D spending – are larger than the multipliers on the higher corporate taxes,” he concluded.

But Zandi also warned that his economic simulations required accepting some assumptions – including a major one that said “federal government spending on green products will have impacts similar to spending on more traditional infrastructure” – and that some of the plan’s effects could be complicated in the short term by the upheaval created by raising corporate taxes.

“The economic boost provided by the increase in federal spending is partially offset by the economic drag resulting from the increase in corporate taxes under the plan,” Zandi wrote. “Higher corporate taxes increase the cost of capital for businesses, reducing business investment, and ultimately weighing on private-sector productivity. The somewhat higher budget deficit under the clean energy plan also results in an increase in interest rates that weighs on economic growth.”

To oversee large portions of the plan, Warren is proposing a new federal agency called the Department of Economic Development. It would be tasked with authoring a “national jobs strategy” – similar to programs in Germany and China – every four years, the senator said.

“This is a pretty straightforward idea. But outside of the defense context, the United States has nothing remotely like it,” Warren wrote. “Government programs that affect job creation are an afterthought, uncoordinated and scattered across the government, and submerged in larger agencies with different primary missions.”

The new department would “replace” the Commerce Department and would bring under its umbrella smaller outfits like the Small Business Administration and the Office of the US Trade Representative. Warren’s aim, according to the posts, is to create a federal government apparatus better designed to advance workers’ interests over those of big companies.