Tax Measure Finalized by Congress
Yesterday, the House voted 227-203 to approve a massive tax cut bill, previously tweaked by the Senate the day before to ensure compliance with budget rules. President Trump is expected to sign the bill into law in the coming weeks.
As n4a's Legislative Updates and Advocacy Alerts detailed, the tax cuts are expected to create at least $1 trillion in deficits over 10 years, with higher deficits if the ambitious economic growth forecast by Republican leaders does not materialize.
Under the “pay as you go” (PAYGO) budget law, this deficit spending will trigger an automatic sequestration of several federal programs that receive mandatory (vs. discretionary) funding unless Congress passes a waiver to exempt the 2018 deficits (and every year thereafter). Should a waiver not be granted, Medicare would be cut by $25 billion and the Social Services Block Grant would be eliminated, among other hits to essential programs. The proposed continuing resolution (CR) being considered by Congress this week to avert a shutdown includes a waiver of PAYGO. If that provision is not in the final spending measure, President Trump could wait to sign the tax bill until January, giving Congress more time to pass a waiver.
n4a is disappointed that Congress chose to create new deficit spending at a time when the aging of our population must inform all levels of policymaking, given the challenges ahead. The tax cuts will reduce government revenues for years to come yet the FY 2018 budget resolution passed by both chambers this fall encourages significant cuts to Medicare, Medicaid and non-defense discretionary funding (such as funding for the Older Americans Act) in the name of deficit reduction. Advocates will need to be ready to oppose such cuts to vital aging programs in the new year.