The GOP Tax Plan -- First The Middle Class, Now An Ax To Medicare

Though the House now has passed its version of tax reform with only Republicans voting for it, an overwhelming amount of attention continues to be brought to bear on the Middle Class, such as millions facing an increase in taxes; eliminating key deductions that make home ownership affordable for those earners; taking away health care for an estimated 13 million or more by eliminating the individual mandate in the Affordable Care Act (“The GOP Tax Plan: First The Dagger, Now The Scalpel, To The Middle Class”); and even having tax cuts for the Middle Class be temporary with corporate cuts becoming permanent. What has escaped much attention in the popular press, however, is that the GOP tax plan may well force a real “shaving” to Medicare, all because of having to balance the federal budget due to the deficit the tax plan will bring about. Seniors on Medicare, if you thought only the Middle Class has become the sacrificial lamb for any tax overhaul the Republicans want to shove down the throats of the American public, you would be mistaken.

According to sources (“Republicans’ tax bill could trigger a $25 billion cut to Medicare”; “CBO:Republican tax plan would trigger big cuts to Medicare”), the Republicans trying to pass a $1.5 trillion tax cut could, according to the CBO (Congressional Budget Office), trigger a sequestration across some mandatory spending programs, particularly like Medicare, although inclusive of federal student loans, agriculture subsidies, even funding for customs and border patrol. This all has to do with a 2010 PAYGO law (”pay-as-you-go”) that says all passed legislation cannot increase the estimated national debt. “If Republicans want to pass a tax bill, they have to pay for it with mandatory spending cuts―-or, inversely, if Congress boosts funding for entitlement programs, it has to increase taxes. If Congress violates this law, the Office of Management and Budget, which keeps the deficit scorecard, ‘would be required to issue a sequestration order within 15 days of the end of the session Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion,’ the CBO said in a letter to Minority Whip Steny Hoyer (D-MD)” (“Republicans’ tax bill could trigger a $25 billion cut to Medicare”). Medicaid, Social Security, food stamps and all safety net programs are exempt from sequestration. But Medicare, even mandatory spending in Obamacare, would remain exposed to Congressional cuts. Cuts to Medicare are capped at 4 percent, about $25 billion annually. To pass the Republicans’ $1.5 trillion tax cut would require $111 billion in cuts in total, besides the $25 billion to Medicare.

Even the Wall Street Journal reported two days ago,

The Republican tax bill would force $25 billion in immediate cuts to Medicare, according to the Congressional Budget Office, a move that could only be stopped only with a bipartisan vote.

Those are the consequences under the pay-as-you-go law that Congress passed in 2010. That law requires tax cuts and certain spending increases to be paired with offsetting provisions. If not, the law forces automatic spending cuts...Congress could prevent the cuts, but hat couldn’t be done under the fast-track procedures they’re using for the tax bill.

So besides a dagger in the heart of the American dream of home ownership, a scalpel to those 13 million that will lose health care under Obamacare [and note that sign-ups for Obamacare this year to date are over 45% ahead of last year], now those 65 and over stand to get an ax in their back with having to cut Medicare spending if Republicans get their way with a tax overhaul plan that benefits principally the wealthiest of Americans and the fat cat donors of the Republican party. Is that what Americans sent their elected officials to Washington to do? Hope not.