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OpEdNews Op Eds    H2'ed 12/14/17

GOP tax cuts will trigger sequestration

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Message John Peebles

Tax bill recently passed by the Senate and approved by Reconciliation will generate sequester cuts under the PAYGO program.

Here is Maya MacGuineas writing for The Hill, as quoted by the Committee for a Responsible Federal Budget:

"The statutory pay-go sequester (as opposed to the Budget Control Act sequester that enforces the discretionary spending limits) requires across the board cuts in non-exempt mandatory spending programs to offset any deficit-increasing legislation that was passed in a given year."

PAYGO requires Congress to administer the cuts as the deficits are incurred. This means the recently passed budget will trigger cuts in:

"...Medicare, agriculture subsidies, student loans, the Social Services Block Grant, parts of border security and mandatory spending in the Affordable Care Act other than exchange subsidies and Medicaid expansion. So with this tax cut would come a doozy of a sequester."

Now certain favored spending troughs like the military--who just received nearly $700 billion in spending will be exempt from sequester. This is the fantasy line between discretionary and non-discretionary spending. Translation: depending on how you see things, federal spending can be classified as voluntary or involuntary.

A Republican might see some kinds of spending as more vital than others. These he may classify as non-discretionary to protect from sequester. If it's stuff he doesn't like--well, those of course are classified as "optional" even if they affect things like children's health care and food for the poor.

The Republicans have passed this budget knowing full well that sequester will apply to spending they don't like and not applied to spending they like. It's a classic Trojan Horse--minimize cuts to vital social services in selling the Budget Bill, all the while knowing that the tax cuts would trigger sequestration in future years.

PAYGO rules can be ignored but I believe 60 votes are required for a waiver. This mechanism make deficit spending harder and avoiding cuts associated with higher spending a bigger challenge. Of course the political class will seek to exempt the new Budget Bill from the effects of PAYGO by getting Democrats to sign off on an exemption--a process which the GOP Senatorial leadership thinks it can make happen.

The cuts according to MacGuineas will be up to $150 billion a year--the exact same amount that the tax breaks will cost the Treasury. So the corporations will pay less in taxes--money which Bank of America CEO Jamie Dimon has said would be spent on stock buybacks. The less they pay, the more discretionary spending is cut. The devil is in the details--the Tax Bill is a reverse Robin Hood cloaked in the fake objectivity of sequestration.

The plan all along appears to be to reduce taxes, boosting the deficit, then allowing sequestration to do more damage to the budget. Sure some of the Republicans' spending priorities might suffer--but not as much as those that the Democrats tend to defend.

Bottom line is that sequestration won't be leveled across the board but on discretionary items only. The defense bill I believe is immune as are the budgets of the security apparatus. These are viewed as fundamental to our security and are thus uncut-able. Meanwhile the programs that millions of Americans depend on like Medicare are cut and the money literally given out in tax breaks.

Reduce the tax breaks and key parts of the federal budget can be protected from sequestration. By selling the Tax Bill as a break from taxes, the GOP has set the country up for big surprises as the sequestration kicks in. The more that corporations save on their taxes, the deeper the cuts.

PAYGO may have meant to block excess government spending, the kind that has seen the federal debt double since 2010. The intent has been frustrated by a stream of exemptions and re-classifications based on partisan interpretations of various budget items and their expend-ability. Exempted spending will continue to grow as the Senate has done everything it can to free itself of spending limitations. The response to the Republican Tax Bill will be more spending on the things the people don't need as much and less spending on those they need.

These tax cuts come with a real price paid by hard-working Americans who don't earn enough, or have student debt, or other financial hardships. This lack of compassion demonstrates Republican contempt for the poor. It's as if they enjoy being Scrooge.

Rich, white, older, and mostly male, members of the Senate have disconnected from the Main Street realities that make life so hard for average Americans. Rather than help, the self-entitled political class would see Americans suffer even more. This is consistent with the self-sponsored delusion among the rich that they achieved success as a result of their own merit and resolve when in fact we know the rich get rich because they're already rich. Inequity in tax policies assures this.

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The author lives in Colorado, photographing the natural beauty of the Rocky Mountains. Politically, John's an X generation independent with a blend of traditional American and progressive values. He is fiscally conservative and believes in (more...)

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