Healthcare Taxes

The GOP Tax Cut Bill Will Trigger Automatic Medicare Cuts

JM Ashby
Written by JM Ashby

In addition to the loss of coverage for over 13 million people precipitated by the repeal of Obamacare's individual mandate, the Congressional Budget Office (CBO) also estimates that the Senate Republican tax cut bill will immediately trigger automatic Medicare cuts. And that's just the beginning

From the Wall Street Journal:

The Republican tax bill would force $25 billion in immediate cuts to Medicare, according to the Congressional Budget Office, a move that could 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. On top of Medicare, there will be another $85 billion to $90 billion in spending cuts in fiscal year 2018, according to CBO.

Beyond Medicare, other affected programs include agriculture subsidies and student loans, according to the Committee for a Responsible Federal Budget.

The reason this will happen is because Republicans are using the reconciliation process to thread a fiscal needle that places restrictions how much they can add to the deficit.

For their part, Republicans say they will act to prevent these cuts after passing their tax cut bill, but doing so will require Democratic votes.

I think we all know exactly how that would turn out. Republicans will demand a vote to repeal parts of Obamacare in exchange for averting over $400 billion in automatic cuts to Medicare. And Medicare won't be the only program they could hold hostage. Starving the government of revenue will choke the entire federal budget.

This isn't an accident or coincidence.

  • muselet

    I don’t like to insult an entire group, but the Senate Rs are sociopaths.

    Apologies for insulting sociopaths.

    –alopecia

  • Username1016

    I’m so TIRED of them. I just called/emailed Pat Toomey AGAIN, because what can one person do besides badger their legislators? I told him to rethink his policy of “Shaft America.” He won’t, though.

  • Badgerite

    Well now we know why trump wanted to cal the bill the “Cut, Cut, Cut Bill.” It automatically requires “Cuts” to a lot of stuff.
    Medicare, student loans, farm subsidies, and much more. And it will require the end of many income tax deductions designed to benefit the middle income and working class. Scroogey Bill is more like it.
    The “Have They No Work Houses?” Bill.

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    • Draxiar

      Do you wonder if Republicans watch “A Christmas Carol” (or one of the many iterations of it) and say to themselves as they’re watching it, “Y’know, Ebeneezer Scrooge in the first part of the movie was on to something…”. Or is that in a shocking display of tone-deaf irony do they say, “I feel as magnanimous as Scrooge at the end of the movie. Now let’s cut taxes for the rich and steal healthcare from millions of kids and the poor…because.”

      • Badgerite

        Good point. This bill is actually horrendous. Because the budget hole by law would need to be filled by cuts elsewhere and those cuts are automatic, they estimate the Medicare in the first year would be cut by a huge amount and that would continue in subsequent years to make up for the gaping hole in the budget. So Orin Hatch can stand there and say that the bill “does not cut Medicare” because there is no language in the bill itself that does that.
        But do to other laws that will be triggered by the budget hole, that will be the effect and that is, after all, Paul Ryan’s wet dream as a college student.

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