Trump/GOP Tax Bill Would Trigger Devastating Cut to Medicare

In the latest in a series of “oops” moments for the GOP, Congressional leaders apparently didn’t realize that their deficit-swelling tax scheme would trigger $136 billion in automatic cuts to mandatory spending programs. This includes a $25 billion reduction in Medicare spending, which would take effect almost immediately after passage of the tax bill. Needless to say, that large a cut could be devastating to the 57 million seniors and disabled who rely on Medicare. As a consequence of cutting taxes for the wealthy and big corporations, it would also be grossly unfair.

The automatic cuts would kick-in thanks to the little-known PAYGO law, which, according to the Congressional Budget Office, “requires that new legislation enacted during a term of Congress does not collectively increase estimated deficits.” If such legislation produces a net increase in the deficit, the federal government is required to sequester enough funds to eliminate the overage; hence, the massive and instant cut to Medicare.

As we discussed on today’s Behind the Headlines on Facebook Live, seniors’ advocates are understandably alarmed. National Committee President Max Richtman issued the following wake-up call this morning:

“In their rush to enact a reckless tax bill, Congressional Republicans have overlooked a provision in federal budgetary law that would have immediate and devastating consequences for Medicare. Left uncorrected, this would not only be a bald-faced admission that tax breaks for the wealthy and big corporations are more important than medical care for seniors, but also a betrayal of President Trump’s promise not to touch Medicare.” – Max Richtman, National Committee president, 11/15/17

Richtman sent a letter to the House of Representatives today urging members to oppose the GOP’s “Robin Hood in Reverse” tax plan in its entirety – or at least stop the imminent cut to Medicare while they have the chance. The Congress can stop the sequestration – including the $25 billion hit to Medicare – when it enacts the tax plan. House Democratic Whip Steny Hoyer (D-MD) says that GOP leadership should at least have the common sense to do that.

“While it is possible to avoid the PAYGO enforcement cuts triggered by their added deficits, Republicans would need Democratic votes to do it, requiring them to abandon their go-it-alone partisan strategy, which is only leading them on a path to failure and to putting our country in danger.” – House Minority Whip Steny Hoyer, 11/14/17

Of course, the entire tax scheme – which is being rushed through Congress without regular order – is harmful to seniors’ health and retirement security either way. It eliminates the deduction for medical expenses like chronic and long-term care and balloons the deficit so that future Congresses will feel justified in raiding Social Security, Medicare and Medicaid to make up the difference. In fact, the tax plan presumes passage of the Scrooge-like Republican budget, which calls for $500 billion in Medicare cuts and slashes Medicaid by a whopping $1 trillion. In effect, Republicans are asking seniors, the disabled, and the poor to pay for the lion’s share of a cut for the super-rich. Not to mention that some 36 million middle class Americans will actually see their taxes go up under the GOP plan.

None of these groups – the poor, the middle class, the disabled, or seniors – should be asked to shoulder this burden for a tax cut the wealthy and big corporations don’t need. As Max Richtman writes in his letter to Congress:

Medicare beneficiaries cannot afford to pay more for less coverage – particularly when half of them have incomes of less than $26,200 a year and spend 25 percent of their Social Security check to pay for Medicare Parts B and D out-of-pocket costs for premiums and cost-sharing amounts.

Regarding Medicaid, middle-class Americans often rely on the program for long-term services and supports when they exhaust their savings. Nearly two-thirds of all nursing home residents’ care is financed in whole or in part by Medicaid. In addition, Medicaid provides home and community-based services that allow seniors to stay in their homes. The fiscal crisis created by the tax bill is likely to result in a [trillion-dollar] cut to Medicaid that will limit seniors’ access to long-term care services. – Max Richtman’s Letter to Congress, 11/15/17

The public seems to grasp the gross unfairness of the Republican tax scheme. A just-released Quinnipiac poll indicates that only 25% favor the GOP plan while 52% oppose it. Meanwhile, GOP leadership has made it clear that they are not beholden to ordinary Americans, but their wealthy and powerful donors: a glaring case of backward priorities on Capitol Hill.