October 20, 2017
October 20, 2017
For some lawmakers, annual deficits matter a lot—unless the nation is paying for tax cuts for the wealthy via deficit spending.
Last night, Republican lawmakers demonstrated that previous grandstanding about the nation’s debt is much ado about nothing. The Senate approved a budget resolution on a party-line vote that would: 1. fast-track legislation adding $1.5 trillion to the deficit over 10 years by cutting taxes, and 2. make it easy to enact this measure without a single Democratic vote.
The budget resolution accomplishes this by setting up the “reconciliation” process to enact tax legislation, the very same process that Republicans attempted to use to repeal the Affordable Care Act. Republican leaders plan for the House to approve the budget resolution without changes.
GOP leaders and the Trump administration previewed the tax plan they hope to enact under this arrangement a few weeks ago when they released their “framework” for tax reform. ITEP’s preliminary analysis of the plan found that it would cost more than $2 trillion over a decade, and two-thirds of its benefits would go to the richest 1 percent.
Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, the chairmen of the tax-writing committees, and all of their allies have long claimed that the proposals would be revenue-neutral, meaning their net effect would have no impact on the total amount of money taken in by the federal government. But this is wishful thinking, not truth. Realistic estimates of the tax reform plan released by House Republicans last summer, for example, put its cost in the trillions of dollars.
The jig is up. Even budget gimmicks available to Congress, which are considerable, cannot hide the fact the deficit will increase. Here is what these lawmakers have said about tax reform until now.
- Senate Majority Leader Mitch McConnell of Kentucky, May 16, 2017: “It will have to be revenue-neutral. We have a $21 trillion debt.”
Thursday, McConnell led his caucus to pass the budget resolution, without a single Democratic vote, that would fast-track tax cut legislation that increases the deficit by $1.5 trillion.
- Rep. Kevin Brady of Texas, the chairman of the Ways and Means Committee, which will be the starting point for tax legislation, January 25, 2017: “I believe, both the most pro-growth approach we can take, and the fiscally responsible approach we can take, is to break even with the budget, counting on just solid, verifiable economic growth.”
Brady has indicated that he supports the $1.5 trillion increase in the deficit.
- Sen. Orrin Hatch of Utah, the chairman of the Finance Committee, giving a speech on principles for tax reform on December 16, 2014: “Last, but certainly not least, there is the principle of revenue neutrality. I know this will be a sticking point for some, though, for the life of me, I can’t see why.”
Senator Hatch voted in favor of McConnell’s $1.5 trillion increase in the deficit.
- Sen. Rob Portman of Ohio, February 8, 2017: “I think it should be revenue neutral because that way it can be so-called permanent tax reform, not subject to the limitations of the budget, which is what otherwise would happen.”
Senator Portman voted in favor of McConnell’s $1.5 trillion increase in the deficit.
- Sen. John Thune of South Dakota, November 18, 2016: “Tax reform ought to be revenue-neutral, budget-neutral, deficit-neutral.”
Senator Thune voted in favor of McConnell’s $1.5 trillion increase in the deficit.
First Trump Administration officials promised multiple times that this tax plan would not benefit the rich, and began to admit that they will not keep this promise. Now, Republican leaders in Congress have admitted that they cannot keep their promise to avoid increasing the deficit with this plan to cut taxes for the rich. This tax plan would mortgage our children’s tomorrow to give tax cuts to the rich and corporations today. The legislation they hope to pass can be called many things, but “tax reform” is not one of them.
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