Reagan

Bruce Bartlett, a former economic advisor to President Ronald Reagan, is warning Americans to not let the Republican tax bill pass.

In a tweet from his verified account, Bartlett — who also served in President George H.W. Bush’s Treasury Department — predicted that all of the fiery deficit hawks would come out of the woodwork should the Republican tax bill become law. If the $1.5  to $1.7 trillion cost estimated by the Congressional Budget Office is correct, the federal deficit will grow considerably.

According to Bartlett, this is when fiscal hawks will demand steep cuts to earned benefits like Social Security and Medicare:

The tweet from Bartlett carries extra weight, given that the last major overhaul of the U.S. tax code happened under the Reagan administration. Reagan’s 1986 tax cuts are widely blamed for increasing the federal deficit, which ballooned from $1 trillion at the start of his presidency to almost $3 trillion by the time he left office — an increase of 190 percent.

In a Washington Post op-ed last September, Bartlett called the guiding Republican philosophy on the supposed economic benefits of tax cuts a “myth” and blasted President Trump’s tax plan, saying the belief that sharply cutting tax rates would lead to economic prosperity was “wishful thinking.” In fact, Bartlett argued that the Reagan tax cuts caused great harm to the economy:

“[T]here is no evidence showing a boost in growth from the 1986 act. The economy remained on the same track, with huge stock market crashes — 1987’s “Black Monday,” 1989’s Friday the 13th “mini-crash” and a recession beginning in 1990. Real wages fell.”

House Speaker Paul Ryan has essentially confirmed Bartlett’s prediction, telling CBS’ Face the Nation that while cutting Social Security and Medicare is a goal for him, tying it to the tax bill would kill the chances of either proposal passing. A recent article from Vox’s Tara Golshan argued that Medicare would be cut by at least $25 billion if the tax bill was signed into law, pointing to the 2010 PAYGO law (pay-as-you-go) that forces Congress to cut other programs for any legislation that increases the deficit.

While the Republican-controlled House already passed their version of the tax bill, the legislation is currently on the ropes in the upper chamber, with Senators Ron Johnson (R-Wisconsin) and Steve Daines (R-Montana) on the record as “no” votes. Under budget reconciliation rules, Republicans can only afford two defections from their own party. If moderates like Senators Susan Collins (R-Maine) or Lisa Murkowski (R-Alaska) oppose the bill as well, it will die in the senate.

 

Matthew P. Robbins is a freelance economics contributor covering wages, budgets, and taxes. He lives in Chicago, Illinois with his husband and two cats. 

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