FACT CHECK: Would The GOP Tax Bill Cut Medicare?
Democrats in Congress have warned that the GOP tax bill would cut Medicare if passed.
“The #GOPTaxScam will trigger an automatic $25 billion cut to Medicare next year,” House Democratic Whip Steny Hoyer tweeted Friday.
“#GOPTaxScam bad deal for #seniors, triggering $25 BILLION in cuts to #Medicare,” tweeted Florida Democratic Rep. Charlie Crist Wednesday.
If the tax bill passes and nothing else is done before the end of the year, it would trigger an automatic budget cut to Medicare and other services. But Republicans will try to pass additional legislation to prevent any cuts.
The Congressional Budget Office (CBO) warned Congress last month that the Tax Cuts and Jobs Act, if enacted, would trigger automatic budget cuts mandated by the pay-as-you-go (PAYGO) budget rule.
The rule requires offsets to federal spending when Congress passes legislation that would add to the deficit. Because the tax plan is expected to add $1.5 trillion to the deficit over the next 10 years, the government would be required to cut spending by $136 billion in fiscal year 2018. This would include a $25 billion cut to Medicare.
But it’s not a given that the cuts will happen. Congress can waive the PAYGO requirements if it acts before the end of the year, and Republicans have expressed that they intend to do so.
“I have written correspondence that memorializes the agreement that the four percent cut in Medicare that could go into effect will not go into effect,” Republican Sen. Susan Collins said on “Face the Nation” Sunday. “I’m absolutely confident. I have it in writing, a statement by both Mitch McConnell and Speaker Ryan.”
Collins noted that the PAYGO requirement has been waived 16 times in the past. Waiving the requirements for the tax bill, however, will be more difficult than in the past.
Previous waivers were written into legislation. Senate rules prevent Congress from adding a PAYGO waiver to the tax bill because of a process called reconciliation, so only new legislation could waive the requirement. “This would not be an easy legislative task—in part because such legislation would be subject to filibuster in the Senate, and the filibuster could only be stopped with 60 votes,” Alan Cohen, senior fellow at the Center for American Progress, wrote in a post. The 52 Senate Republicans would need Democrat votes to pass the waiver.
Other experts are confident that a PAYGO waiver will pass without issue.
“Congress will waive the PAYGO requirement, as they often have in the past,” Chris Edwards, director of tax policy studies at the Cato Institute, told The Daily Caller News Foundation in an email. Edwards expects Democrats to agree to the waiver in order to prevent any spending cuts.
Even if Congress passes a waiver, Republicans are rumored to tackle entitlement reform next year, which would impact Medicare. “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” House Speaker Paul Ryan said in a radio interview Wednesday.
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