By Jacob M. Schlesinger 

Bernie Sanders concedes he is currently losing the battle for the Democratic presidential nomination. But the Vermont senator is staying in the fight to try to win a bigger war: his lifelong crusade to push the party's economic agenda further to the left.

The candidate wants to dramatically expand government in order to address "the grotesque level of income and wealth inequality in this country," as he put it Wednesday.

Mr. Sanders's uncompromising adherence to his liberal ideals has been both his strength and weakness in this campaign. It energizes his core supporters, who favor his purity over more flexible rivals. But it has also turned off Democrats who dislike his ideas or worry they are unrealistic, and that his stubbornness would keep him from the give-and-take necessary to accomplish change in Washington. As Mr. Sanders himself has acknowledged, many also worry that his far-left position could make it hard to draw enough voters to beat Mr. Trump in a general election. The escalating coronavirus crisis might also make Americans more risk-averse when choosing a leader.

Mr. Sanders argued that voters agree with his platform, even if they are skeptical of his candidacy. "Poll after poll...shows that a strong majority of the American people support our progressive agenda," he said, in explaining why he would continue his campaign against front-runner Joe Biden, despite two straight weeks of big primary losses and mounting calls for him to drop out and unify the party against President Trump.

He vowed to use this Sunday's debate, the first solely between the two candidates, to press his rival for detailed plans for expanding health care, reducing childhood poverty and curbing the political power of billionaires. The candidates face primaries on Tuesday in Arizona, Florida, Illinois and Ohio.

Mr. Sanders's bid to remake Democratic economic thinking remains one of the most intense conflicts in this election cycle, pitting him against affluent party donors and longtime policy makers who share many of his general goals, but prefer a less government-oriented, or more tempered approach.

Surveys indicate a party electorate torn. A February Wall Street Journal/NBC News poll showed 53% of Democratic voters preferred a candidate pushing Sanders-like "larger scale policies that might cost more" and "bring major change," versus 41% favoring a Biden-like candidate "who proposes smaller scale policies that...will bring less change."

But the same poll found Democrats, by 53% to 42%, favored a candidate "with the best chance to defeat Donald Trump" over one "closest to your views" -- and they have increasingly concluded Mr. Biden has the best chance.

When Mr. Sanders, a self-proclaimed democratic socialist, appeared ascendant last month in the nominating contest, his sweeping platform of national health care, universal free college and a Green New Deal drew blistering criticism from Democratic stalwarts.

Harvard economist Lawrence Summers, a top adviser to both presidents Clinton and Obama, predicted "major adverse consequences" for workers, markets and business investment should Mr. Sanders prevail. Former Obama White House chief economist Jason Furman, also now at Harvard, said the Sanders program would lead to "too many individuals too constrained from choices" and "a weaker economy." The Progressive Policy Institute, a Washington center-left think tank, branded the Sanders platform "fiscal fantasy."

None of that moved Mr. Sanders to soften his policies. Instead, Mr. Sanders and his aides have blasted the criticism and the critics as tainted and out of touch. They blame moderate Democratic economists and think tanks, as much as Republicans, for long-term wage stagnation and other economic worries still haunting millions of Americans despite the long expansion.

"We need to think outside the box," said Warren Gunnels, Mr. Sanders's longtime policy adviser. "Over the past 45 years we've seen a massive increase in income and wealth inequality while the working class continues to struggle. It's too late for establishment economics."

Mr. Sanders is more likely to discuss fostering a "moral economy" than strategies to boost gross domestic product, business investment or corporate profits. With his "economic bill of rights," he wants Washington to guarantee all Americans a job, health insurance, college and housing.

Many Democratic economists "would argue those are fine aspirations, but in order to achieve them, you'd have to intervene in markets beyond levels they're comfortable with," said Jared Bernstein, a senior fellow at the left-leaning Center on Budget and Policy Priorities and the chief economist in the Obama administration for then-Vice President Biden.

Mr. Sanders proposes sharply higher taxes, bigger government spending and more regulation. He would boost the size of the federal government's share of GDP to a level exceeded only once, during World War II.

While many Democrats over the past few decades have tried to balance government intervention with market forces, Mr. Sanders has less trust in the power of markets to improve lives. On Thursday, he said his big-government vision of a national health-care plan and price controls on drug companies would put the country on stronger footing to address crises such as the coronavirus pandemic.

At times, he has dismissed cost concerns outright. Asked at a Feb. 18 CNN Las Vegas town hall about the price and feasibility of his plan to phase out fossil fuels, he replied: "You tell me how much is too much if we're talking about saving this planet."

Mr. Sanders wants to smash the conventional wisdom that he says has constrained thinking in Washington since Ronald Reagan -- a consensus that treats higher taxes and new government programs with suspicion -- and reopen discussion of liberal ideas that haven't been seriously considered since the 1970s.

The candidate already claims victory on that front, recounting how proposals from his failed 2016 bid, dismissed at the time as too far left, have since been embraced by Democratic party leaders.

One fight with Hillary Clinton, who won the 2016 Democratic nomination, was over his push to double the federal minimum wage to $15 an hour. The Democratic-led House last year passed a bill seeking to make that law, while all his 2020 rival candidates endorsed the goal. Mr. Sanders's 2016 proposal for a Wall Street tax on certain financial transactions was also embraced by much of the 2020 field. Mr. Biden's current positions on many issues, such as expanding the Social Security and Medicare entitlement programs, have moved him closer to Mr. Sanders than the longtime Delaware politician has been for much of his career.

"I have been called radical and extreme," Mr. Sanders said during an Iowa campaign stop last year. "Over the last four years...a whole lot of other people have become radical and extreme."

Even some mainstream center-left economists praise Mr. Sanders's bid to shake up the Washington consensus on restricting spending. "All upper-income democracies in the world have much more generous welfare states than the U.S. and do fine," said Adam Posen, president of the Peterson Institute for International Economics, a think tank that has long advised both Republican and Democratic administrations. "We've gone so far off the rails in terms of underinvestment in the public sphere that even a massive shift would only get us part way to where we should be," Mr. Posen said.

The Sanders campaign has been the only major one in this election cycle to avoid even talking to top advisers of previous Democratic presidents. Economists who weren't part of the Clinton or Obama administrations have been close to the Sanders campaign. One is Stephanie Kelton, a professor at Stony Brook University in Stony Brook, N.Y., who served as an aide to Mr. Sanders on the Senate Budget Committee. She is the leading proponent of "modern monetary theory," which argues that governments shouldn't fret over debt and deficits.

Another is Darrick Hamilton of Ohio State University, whose work focuses on what he calls "economic justice." He aims to narrow the wealth gap between black and white households and has been a proponent of the federal job guarantee idea that Mr. Sanders has endorsed.

Mr. Sanders's wealth tax was written with the help of two French economists at the University of California, Berkeley, Emmanuel Saez and Gabriel Zucman. Massachusetts Sen. Elizabeth Warren had a similar plan influenced by their work. Until she dropped out in early March, she was Mr. Sanders's competitor for the liberal lane in the nominating contest.

The Progressive Policy Institute estimates that Mr. Sanders is proposing adding just over $50 trillion in spending over 10 years, nearly doubling the federal government's current outlays. The new funds would mainly be used to expand the social safety net and to increase infrastructure spending.

That is more than eight times the spending proposed by Mr. Biden, and about 40% more than what Ms. Warren had proposed, according to PPI estimates.

Mr. Sanders would boost taxes by more than $20 trillion over 10 years, according to PPI, through increases in income, payroll and corporate taxes, as well as the new wealth tax. That could increase revenues collected under current policies by about half. That is about the same as Ms. Warren had planned but is six times the tax hikes laid out by Mr. Biden.

Most mainstream economists say spending and taxes on that scale would so distort the economy and private-sector activity that it would undermine growth. They warn that significantly higher tax rates could dampen incentives for businesses and individuals to invest, while bigger payouts to households could curb incentives to work. They add that attempts by regulators to override market outcomes can impose costly inefficiencies in affected industries.

Mr. Gunnels, the Sanders aide, dismissed concerns about boosting the size of government. "If we were a poor country...these would be legitimate questions," he said. "We're not living in a Third World country. It's not too much to ask that everybody in this country has a decent standard of living."

Sanders allies said his platform has successful 20th-century parallels: Franklin D. Roosevelt's 1930s New Deal, which created Social Security and a raft of new government programs and regulations; and Lyndon B. Johnson's 1960s Great Society, which created Medicare and new antipoverty initiatives.

Harvard's Mr. Summers said the scale of Mr. Sanders's proposals would far exceed anything FDR or LBJ enacted, or even what South Dakota Democratic Sen. George McGovern proposed during his 1972 landslide loss to Richard Nixon, a defeat that helped usher in the party's retreat from liberalism.

If Mr. Sanders were able to enact his full program, government as a share of GDP would jump from the 2017 level of about 38%, one of the lowest levels in the developed world, according to the Organization for Economic Cooperation and Development, to more than 50%. That is well above any peacetime level in U.S. history, but in line with European countries such as France and Denmark.

Mr. Sanders and his supporters have embraced the European model -- in 2016, in response to gibes he wanted "America to look more like Scandinavia," he replied, "What's wrong with that?"

He also envisions a raft of new government regulations, from national rent control to new rules for CEO pay to an outright ban on fracking.

While some Democratic economists prefer to address climate change with market incentives, such as a carbon tax, Mr. Sanders would rely more on direct government orders. To protect energy workers who might lose their jobs as Mr. Sanders moved to phase out fossil fuels, he promises five years of government-guaranteed salary, plus housing assistance, pension support and retirement subsidies for those who decide not to continue working.

That "would be an utter nightmare to enforce," said Dean Baker, an economist at the liberal Center for Economic and Policy Research, saying it would be difficult to flesh out the criteria for who exactly would qualify. "What about the person who works for the supplier to an oil company? What about the person who lost his job one month before the Green New Deal? It's quite hard to do these things as a practical matter."

Mr. Sanders would aim to shrink the role of the financial sector in the economy by, among other things, breaking up the largest banks, and reimposing Depression-era limits on banking activity.

He would make it harder for employers to fire workers, unionized or not, and would require big companies to give workers shares of company stock and the right to choose nearly half the seats on corporate boards. His goal is to recalibrate the balance of power between corporations and unions, who have seen their clout erode steadily over the past 40 years.

"In Bernie Sanders's world, the market doesn't come from a state of nature, it comes out of an allocation of power," said Robert Reich, a Berkeley public policy professor, who served as President Clinton's labor secretary and has periodically defended Mr. Sanders against attacks from other academics. "The standard economic view is that the market is filled with potential win-win opportunities, but when you're talking about power, it's more complicated. Some people gain it and others lose it."

--Eliza Collins contributed to this article.

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com

(END) Dow Jones Newswires

March 13, 2020 14:07 ET (18:07 GMT)