With all eyes on the Senate, the House moved Friday to permanently extend the tax cuts for the wealthy that are President Trump’s signature accomplishment.
The individual cuts are set to expire within a decade, while the corporate cuts were designed to be indefinite. The House measure would make the individual cuts indefinite as well.
This is likely a stunt ahead of the midterm elections, as the Senate has no intention of taking up the new tax cuts. But if enacted, the second round of tax cuts is predicted to add $3.8 trillion to the deficit.
That’s on top of the $1.9 trillion the original tax cut package added to the deficit projections, according to the Congressional Budget Office.
“I guess their giveaway to the ultrawealthy wasn’t enough the last time around, so they’ve come back for round two,” Representative Linda Sánchez (D-California) said. “When the bill finally comes due, I’m terrified Republicans will pay for it by cutting Social Security and Medicare.”
“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” House Speaker Paul Ryan (R-Wisconsin) said last year. He specifically cited “health care entitlements,” meaning Medicare and Medicaid.
Of course, President Trump promised he wouldn’t pass any cuts to essential services like Social Security, Medicare or Medicaid. Assuming he keeps that promise, the result would be a dramatic spike in deficit spending.
In the explosive Bob Woodward book Fear, it was revealed that President Trump didn’t understand the deficit and hazards of deficit spending. He wanted to just borrow more and print money. However, as the deficit grows, so does the amount the government has to spend on paying the annual interest on its debt. By 2026, the Congressional Budget Office projects the amount paid on that interest will double as a percentage of GDP.
In order to keep the tax cuts, either public services or investments will need to be cut somewhere in order to pay for that increase in spending on servicing the national debt. And Paul Ryan showed exactly what Republicans see as the prime target — Medicare and Medicaid.
And that’s just the most immediate problem with Trump’s solution.
What that means is as Republicans give more and more of the government’s money to the ultra-wealthy, more and more will need to be taken from government investments elsewhere to pay for it, if not now, then later.
Which makes the House’s new tax cuts a stunt with potential dramatic consequences for the poor and the elderly, who rely on the government programs that Ryan would cut to give handouts to the wealthy.
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.