Friday, October 20, 2017

Republicans pass scary budget

Katrina vanden Heuvel At The Nation asks the scary question: What’s Even Scarier Than Donald Trump?
Her answer: Republicans have put forward a budget that would have truly terrifying consequences.

Donald Trump’s flailings are ever more terrifying. In the course of a few days, he tossed a grenade into the health-care markets that millions rely on, traduced the Iranian nuclear deal, threatened to abandon US citizens ravaged by Hurricane Maria in Puerto Rico, continued to sabotage action on climate change, tweeted about censoring the media, and so undermined his own secretary of state that Republican Senator Bob Corker accused him of castration. For all of that, Trump’s grotesqueries are exceeded by a Republican Congress intent on a course so ruinous as to be, one hopes, impossible to sustain.

This week, Senate Republicans will seek to push through a budget resolution for the current fiscal year. The resolution provides guidelines for spending and tax cuts, with projections for the next decade. Although its provisions are destructive and absurd, it has the support of virtually all of the Republican caucus.

The resolution is designed to facilitate the passage of tax cuts with Republican votes only. The final package hasn’t been written yet, but Republican leaders have produced a “framework.” Its elements are perverse. We know that extreme inequality corrupts our democracy and impedes economic growth. As a detailed analysis by the nonpartisan Tax Policy Center makes clear, this bill will make it worse, with the top 1 percent pocketing over half of the tax cuts next year—and an obscene 80 percent by year 10. The multinational corporations that book profits abroad to avoid taxes will be rewarded with a retroactive tax cut for $2.6 trillion stashed overseas. The proposal would also expand that tax dodge by virtually eliminating taxes on profits they report as earned abroad. And at a time when hedge-fund operators pay a lower tax rate than schoolteachers, this bill would enlarge the outrage with a massive tax break for real-estate barons, hedge-fund managers, and lawyers, delivered by taxing “pass-through” income at a reduced rate. Instead of closing loopholes, this bill adds to them.

The spending side of the Senate bill has received less attention, but it’s even worse. As a comprehensive analysis by the Center on Budget and Policy Priorities details, the bill projects $5.8 trillion in spending cuts over the next 10 years. At a time when the baby boomers are retiring, it calls for cuts of $473 billion in Medicare, over $1 trillion in Medicaid, and hundreds of billions of dollars in Obamacare subsidies to medium- and low-income workers. It projects cuts of over $650 billion in income-security programs for low-income workers—primarily food stamps, the earned-income tax credit, the child tax credit, and supplemental security income for disabled seniors, adults, and children in need. Another $200 billion will be cut from the Pell grants and student loans that help working families afford college. These cuts will leave millions without affordable health care and make millions of disabled and low-income Americans even more vulnerable.

The budget also contains stunning cuts in what is called “non-defense discretionary spending” (essentially everything the government does outside of the military, entitlements, and interest payments on the national debt). These include cuts to agencies that contribute to our safety—law enforcement, the Coast Guard, the FBI, the DEA—as well as services vital to our health, like environmental protection and water and sewage systems. The public investment crucial to our economy and our future—science and technology, medical research, modern infrastructure, education and advanced training, and more—would also be slashed. These programs are already projected to sustain deep cuts under the 2011 Budget Control Act, but the Senate bill decimates them. By 2019, it cuts this spending by 10 percent from 2017 levels; by 2027, that number is nearly 20 percent. As a share of the economy, our spending on domestic services will be reduced to levels not seen since Herbert Hoover.

This is a suicide budget. In a country dealing with a growing population, rising global competition, and pressing new challenges like catastrophic climate change, the Republican Senate would cash in our future to provide endless tax cuts for the richest among us.

The United States will lag rather than lead the industrial world in education and training. We will squander our edge in innovation. We will suffer the rising perils and costs of a decrepit and outmoded infrastructure. We already witness all these trends today. The Senate budget is on course to accelerate them.

This folly, one hopes, is too extreme to be passed. Yet this week, all of the Senate’s Republicans—save perhaps for one or two dissenters—will vote for a budget that is truly a road to ruin. Why? Partly, of course, to reward the wealthy special interests that fund their party. They may also fear right-wing challengers if they don’t toe the line. Or they may be motivated by purblind ideological conviction, although it’s hard to imagine that any of them really believe these measures would make things better. And then there’s sheer desperation: At this point, the GOP has to get something done, even if it does more harm than good to most Americans. President Trump’s increasingly manic careenings are terrifying to behold, but the remorseless suicide mission of the Republicans caucus in Congress should horrify us as well.

AZBlueMeanie (Blog for Arizona) thinks the real action will be on the tax breaks for billionaires bill. In His post yesterday (this morning’s email), Kabuki theater: budget vote-a-rama in the Senate today, he wrote this.

The U.S. Senate is voting on the GOP’s budget resolution today, which is really not about the budget at all, but rather, rigging the procedural rules in the Senate so that the GOP can vote on its so-called “tax reform” (tax cuts for Plutocrats) bill at some point with a simple majority vote of 50 senators plus the Vice President, and bypass the Senate cloture rule of 60 votes to forestall a Democratic filibuster through adoption of reconciliation rules.

There is little chance that the budget resolution will not pass. The real drama will come over the tax cuts for Plutocrats package. Deficit hawks like Sen. Rand Paul insist on maintaining the budget sequestration caps adopted several years ago. Defense hawks like Sens. John McCain and Lindsey Graham want the sequestration caps for defense repealed. Mythical moderate Republicans such as Sens. Susan Collins and Lisa Murkowski are opposed to the draconian cuts to Medicare and Medicaid in the budget. And Sen. Bob Corker, whom Trump has chosen to vilify in his Twitter rages, is on record saying of the tax bill “Unless it reduces deficits – let me say that one more time – unless it reduces deficits and does not add to deficits with reasonable and responsible growth models and unless we can make it permanent, I don’t have any interest in it.”

With Paul and Corker opposed because the GOP tax bill adds to the federal deficit, it only takes one more GOP defection to defeat the tax cuts for Plutocrats bill.

The Senate GOP leadership adopted reconciliation rules to repeal “Obamacare” and failed miserably. There is a very good chance that the tax cuts for Plutocrats package will also fail despite adoption of reconciliation rules. Bad policy is bad policy, and there is more than enough to dislike in what has been proposed to garner at least three GOP defections on the GOP tax bill.

We now have to count on a severely divided Republican caucus in the Senate to realize those defections. See my post from Wednesday, McSally champions Trump tax breaks, but will anything survive a divided Congress?

UPDATE: They did it. The New York Times reports that the Senate Approves Budget Plan That Smooths Path Toward Tax Cut.

The Senate took a significant step toward rewriting the tax code on Thursday night with the passage of a budget blueprint that would protect a $1.5 trillion tax cut from a Democratic filibuster.

The budget resolution could also pave the way for opening up the Arctic National Wildlife Refuge in Alaska to oil exploration by ensuring that drilling legislation can pass with only Republican votes.

Despite having full control of the government, Republicans have so far been unable to produce a marquee legislative achievement in the first year of President Trump’s tenure, putting even more pressure on lawmakers to succeed in passing a tax bill. The budget’s passage could keep Republicans on track to approve a tax package late this year or early in 2018.

As early as next week, the House plans to take up the budget blueprint that the Senate approved on Thursday by a 51 to 49 vote. Doing so would allow for the tax overhaul to move ahead quickly.

Sen. Rand Paul was the only Republican “no” vote - and that’s because he thinks the blueprint calls for excessive spending.

“This is the last, best chance we will have to cut taxes,” said Senator Lindsey Graham, Republican of South Carolina and a member of the Budget Committee, who warned that the consequences would be ruinous if the party failed.

“That will be the end of us as a party,” he said, “because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”

Right question, wrong assumption. Instead, let’s ask: if you are a Republican and you want tax breaks for the wealthy, what good are you to anybody?

No comments:

Post a Comment