Tag Archives: U.S. Senate

Update on the Senate GOP tax bill clusterfuck (updated)

The  tragedy of the  political career of John McCain is that he is a man who frequently espouses high morals and principles and assails others for not having them, McCain: Trump doesn’t have any ‘principles and beliefs’, but he has regularly failed to live up to the very principles which he espouses. He is ultimately a “say anything” politician who plays to his fawning base, the beltway media and Arizona media, who treat him as if he is a senior statesman. McCain is and has always been nothing but a deeply flawed hypocrite.

On the same day McCain criticized our Twitter-troll-in-chief for not having any principles and beliefs, McCain demonstrated that he does not follow his own principles and beliefs, recently expressed in his August op-ed John McCain: It’s time Congress returns to regular order and his dramatic floor speech in the Senate chastising his colleagues prior to the vote on the “skinny repeal” of Obamacare.

Mr. “regular order” gave his consent to the Senate GOP tax bill which at this very moment is still being drafted with provisions no one has seen or read, a tax bill which Senate GOP leadership drafted in secret without Democratic input, committee hearings, stakeholder or public testimony or input (both stakeholders and the public are opposed to this terrible bill), and was just introduced last week, with only a markup before the Senate Finance Committee which reported out the bill on a party-line vote, so that it could be rushed to a vote by the end of this week before anyone could discover what is in it.

As Laurie Roberts of The Republic laments, John McCain’s support of tax reform bill is another ‘danged fence’ moment. Even when confronting his own mortality and having to answer before his God, John McCain simply would not do the right thing for the American people.

Other key developments in the GOP tax bill on Thursday: the congressional Joint Committee on Taxation (JCT), employing magic asterisk dynamic scoring sprinkled with “trickle down” fairy dust, nevertheless says the Senate tax bill will add $1T to deficits, even with growth:

The Senate GOP tax bill won’t produce enough economic growth to fully pay for its tax cuts, the Joint Committee on Taxation (JCT) said in an analysis released Thursday.

The bill’s macroeconomic effects would reduce the deficit by $408 billion over 10 years, but the bill overall would still cost about $1 trillion, the JCT said.

The JCT had earlier estimated that the bill would lose $1.4 trillion in federal revenue before accounting for economic growth.

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The final countdown on the Senate GOP tax bill has begun: call your senators now

The Senate voted 52-48 along party lines Wednesday to begin debate on the Senate GOP tax bill. Several Republicans who have not committed to voting for the final bill, including Sens. Collins, McCain, Corker and Flake, voted in favor of moving forward to debate. But final passage could be another story.

Currently there is no firm agreement on the trigger provision Sen. Corker wants, no pay-for to partially keep the state and local tax deductions Sen. Collins wants, and no language on the pass-through changes for small businesses sought by Sens. Johnson and Daines. Senate Republicans are about to overhaul the tax code, and they don’t know what’s in their bill yet;

Senate Republicans are in such a rush to pass a tax overhaul in the next few days that they voted to start debate on a bill that could still undergo a bevy of last-minute changes they haven’t seen in writing — changes that could dramatically affect the US economy over the next decade.

But most Republicans aren’t letting some last-minute deal cutting that could mean billions of dollars in tax increases, tax cuts, or federal spending cuts get in the way of moving the bill along.

Even Sen. Bob Corker (R-TN), who’s one of the senators most skeptical of the bill and is pushing for the major addition of automatic tax hikes if the federal deficit grows too quickly, voted to start debate on the bill. He had told reporters earlier that he couldn’t describe the changes “until we get it in writing.” Corker later told reporters they could “throw away” anything they’d heard about the deal because it is “still evolving.”

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The Senate GOP tax bill is also an assault on health care

I explained the other day how the mythical moderate from Maine, Senator Susan Collins, is being played by the Trump White House on her wholly insufficient “Obamacare” reinsurance fund bill in order to gain her vote on the Senate GOP tax bill. In major policy reversal, Trump now backs bipartisan fixes to ‘Obamacare’ to get Sen. Susan Collin’s vote on GOP tax bill.

The Congressional Budget Office (CBO) has now scored the bill negotiated by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) to stabilize the “Obamacare” market, and it also comes up woefully short. The CBO just released a report that should worry Sens. Susan Collins and Lisa Murkowski:

A new report from the Congressional Budget Office dealt what should be a crushing blow to the tax bill: The deal that was crafted to win key senators who objected to the bill’s provision that would leave millions uninsured won’t actually stanch the loss in coverage.

With moderates expressing concern over a provision that would repeal Obamacare’s individual mandate — leaving an estimated 13 million more uninsured by 2027 — Republican leadership hatched a plan to simultaneously pass a bill to stabilize the Obamacare marketplaces, a proposal negotiated by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA).

But this proposal hit a major snag Wednesday when a new CBO report found passing the Alexander-Murray proposal — the centerpiece of which is funding Obamacare’s cost-sharing reduction subsidies that Trump has threatened to pull — would not in fact help mitigate the coverage losses and premium hikes triggered by repealing the individual mandate.

Previous estimates from the CBO found that repealing the individual mandate, the Obamacare policy that penalizes people who opt out of buying health insurance, would leave 13 million fewer insured by 2027 and increase premiums by an average of 10 percent over the next decade.

“If legislation were enacted that incorporated both the provisions of the Bipartisan Health Care Stabilization Act and a repeal of the individual mandate … the effects on the premiums and the number of people with health insurance coverage would be similar,” Keith Hall, the CBO’s director, wrote in a letter to Murray.

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New problems for the GOP tax bill are reasons to kill it

The Senate is racing towards a vote on its ill-conceived and fiscally irresponsible tax bill by the end of this week.

It seems the evil GOP bastards have run into a new problem: the Senate GOP tax bill does not comply with the “Byrd Rule,” which means GOP leadership technically cannot pass the bill with a simple majority vote with just Tea-Publicans. Matthew Yglesias explains, New dynamic score shows the Senate tax bill raises debt by more than advertised:

To comply with the terms of the Byrd Rule that allows Senate Republicans to bypass a Democratic filibuster, the tax plan must meet two conditions. On the one hand, it needs to comply with the budget resolution’s mandate to raise the deficit by no more than $1.5 trillion over 10 years. According to Penn-Wharton, it does that. But on the other hand, it needs to not increase the long-term deficit in the years following.

And here’s where Penn-Wharton says that there’s a problem: “We estimate that the Senate TCJA continues to reduce revenue in years beyond the 10-year budget window.”

Critically, this conclusion does not change when they attempt a “dynamic” score that considers the potential growth-boosting effects of tax cuts. Instead, they find that “the Senate Tax Cuts and Jobs Act reduces federal tax revenue in both the short- and long-run relative to current policy. In the near term, there is a small boost to GDP, but that increase diminishes over time.”

Senate Republicans would like you to look past ugly distributive numbers and think about broad growth effects. But the bottom line here is not even Republicans can make that math work out when they need to plug it into a rigorous model.

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In short, the Senate GOP leadership wrote a bill that’s designed to game the system with phase-ins and phase-outs, and Penn-Wharton thinks taxpayers will respond in kind — gaming the gamed system, reducing federal revenue, and increasing the long-term deficit.

The result is a plan that raises long-term deficits by significantly more than the bill is supposed to, even before you consider the impact of higher debt service costs.

So even with their “magic asterisk” dynamic scoring and GOP fuzzy math, they cannot make the numbers add up. Does this mean that the GOP tax bill will be subject to the 60 vote cloture rule because it does not comply with the Byrd Rule? Not in the Septuagenarian Ninja Turtle’s Senate. “Rules? We don’t need no stinkin’ rules! We do whatever we want.”

The Senate GOP tax bill gives substantial tax cuts and benefits to Americans earning more than $100,000 a year, while the nation’s poorest would be worse off, according to a new report released Sunday by the nonpartisan Congressional Budget Office. Senate GOP tax bill hurts the poor more than originally thought, CBO finds:

Republicans are aiming to have the full Senate vote on the tax plan as early as this week, but the new CBO analysis showing large, harmful effects on the poor may complicate those plans. The CBO also said the bill would add $1.4 trillion to the deficit over the next decade, a potential problem for Republican lawmakers worried about America’s growing debt.

And who exactly are these GOP deficit peacocks? Because they have been virtually silent during this tax debate.

By 2019, Americans earning less than $30,000 a year would be worse off under the Senate bill, CBO found. By 2021, Americans earning $40,000 or less would be net losers, and by 2027, most people earning less than $75,000 a year would be worse off. On the flip side, millionaires and those earning $100,000 to $500,000 would be big beneficiaries, according to the CBO’s calculations. (In the CBO table below, negative signs mean people in those income brackets pay less in taxes).

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The main reason the poor get hit so hard in the Senate GOP bill is because the poor would receive less government aid for health care.

The Senate Republican tax bill eliminates the requirement that almost all Americans purchase health insurance or else pay a penalty. The CBO has calculated that health insurance premiums would rise if this bill becomes law, leading 4 million Americans to lose health insurance by 2019 and 13 million to lose insurance by 2027.

Many of the people who are likely to drop health insurance have low or moderate incomes. If they drop health insurance, they will no longer receive some tax credits and subsidies from the government. The Joint Committee on Taxation (JCT), the other official nonpartisan group that analyzes tax bills, put out a similar report showing how lower-income families are hurt by the loss of the health-care tax credits. But the CBO goes a step further than the JCT. The CBO also calculates what would happen to Medicaid, Medicare and the Basic Health Program if the Senate GOP plan became law. The CBO is showing even worse impacts on poor families than the JCT did.

Economist Jared Bernstein explains How the Republican tax cut plan goes after health care:

[C]onsider the other reason the tax plan is so ill-advised: its potential effect on health care.

The Senate added the repeal of the individual health coverage mandate to its version of the big tax-cut plan for at least three reasons. First, because it scores as saving about $320 billion over 10 years, making it a juicy, partial “payfor” for a plan that, even with this change, still will raise deficits by well over $1 trillion over the next decade. Second, because it takes a whack at the structure of Obamacare. And third, because it’s politically easy to defend: The Republicans claim they’re freeing folks from purchasing something they don’t want.

But the argument that getting rid of the mandate will improve people’s well-being by allowing them to opt out of coverage without a penalty is weaker than it first sounds, as per this analysis by Aviva Aron-Dine. She draws heavily on the Congressional Budget Office’s estimate that repealing the mandate will lead to 13 million fewer people with coverage and a 10 percent increase in premium costs.

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For those with low and moderate incomes, the ACA controls coverage costs through either Medicaid or premium tax subsidies, the latter meaning that the government helps to pay your premium costs if your income is below 400 percent of the federal poverty level (almost $80,000 for a family of three with one kid). And when your premiums go up, so does your subsidy. Thus, those on whom the mandate imposes the heaviest financial lift here are those with incomes above this cutoff. And for them, if the CBO is right, premium costs will be higher as a result of repealing the mandate.

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The House bill also repeals the deduction of medical expenses for those who spend more than 10 percent of their income on medical expenses not covered by insurance. While high-income families make the largest claims, lots of low- and moderate-income families take this deduction: More than 70 percent of claimants have incomes below $75,000.

Finally, and I consider this to be an existential threat to social insurance in general, the Republicans’ strategy with all this tax cutting is not just to channel revenue away from the Treasury and toward the top 1 percent. It’s to create large deficits to force future spending cuts. This implicit attack on public health coverage is every bit as threatening as the direct attack.

In fact, The GOP’s tax cut bonanza is a major attack on Medicare:

According to the Congressional Budget Office, the GOP tax bill will instantly trigger $400 billion in automatic cuts to Medicare in the next 10 years, including $25 billion in the first year after enactment alone.

These cuts are the result of a law known as Statutory PAYGO. That law requires an automatic cut in spending when Congress increases the deficit. The tax bill is, in Donald Trump’s words, “a big, beautiful Christmas present” — for Trump’s family and other billionaires. If the Republicans are successful in passing a tax bill that increases the deficit by $1.5 trillion, as they intend, the provisions of PAYGO will be activated.

To be clear: If the tax bill passes the Senate and is signed into law by Trump, nothing more needs to be done to cut Medicare. If the House and Senate do nothing, the cuts take effect immediately after the end of the congressional session and get bigger every passing year. A vote for this tax bill is a vote to cut Medicare.

This is important because the mythical moderate from Maine, Sen. Susan Collins, says her tax vote may hinge on a health care bill. Here’s how it works:

Sen. Susan Collins has suggested she’d vote for a tax bill repealing the Affordable Care Act’s individual mandate only if Congress also passes separate legislation to establishing a new reinsurance fund.

Collins may be the key to passing the Senate’s tax reform bill. But it’s hard to see the Republican-controlled Congress passing a reinsurance bill — and though experts say such a measure would help offset the effects of repealing the mandate, many say it wouldn’t go far enough.

Let me make this easy for you, senator. If Congress does not first enact your reinsurance bill, you are a no vote on the Senate GOP tax bill. You aleady voted against “Obamacare” repeal because of your concerns for its effects on Medicaid and the health insurance markets. You cannot in good conscience vote for this tax bill and square your vote on “Obamacare” repeal.

There are other problems with this ill-conceived tax bill. The most glaring of which is Corporate repatriation is a scam: GOP plan rewards tax-dodgers.

Then there is the attempt to buy off Christian Right Tea-Publican votes with the repeal of the so-called Johnson Amendment which prevents charities, social welfare organizations and, perhaps most importantly, churches from endorsing candidates. Hidden in GOP tax bill: A plan to turn churches into dark-money spigots.

My personal favorite is the House tax bill, approved this month along party lines, would eliminate the teacher spending deduction in its effort to clean up the tax code, close loopholes and secure bigger tax cuts for all. But the Senate bill, which could come up for a vote in the coming days, would double it, to $500. How a $250 Break for Teachers Explains a House-Senate Divide on Taxes. If the GOP tax bill makes it to a conference committee, guess which side will prevail.

David Leonhardt of the New York Times writes today, Will These Senators Live Up to Their Own Principles?:

John McCain helped defeat the Republican health care bill, in protest of its secretive, rushed process. Susan Collins and Lisa Murkowski voted against the same bill because they believed that middle-class and poor families had a right to health care access. Jeff Flake and Bob Corker ended their Senate careers rather than fully submitting to Trumpism. Then there are the two showing new signs of independence: James Lankford of Oklahoma and Jerry Moran of Kansas.

The tax bill is a test of all of them … [because] … This tax bill contains provisions that betray their stated principles.

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So what are the senators going to do?

I hope that they do not fold because doing so — doing what President Trump and Mitch McConnell want — is the easier political path. I dearly hope they do not follow the cynical tactics of a few of their colleagues who have made a show of opposing a Trump-backed bill only to change positions after being offered a fig leaf of change. Senator Ron Johnson of Wisconsin and Representative Tom MacArthur of New Jersey have each done so more than once this year, and now it’s hard to take either seriously.

None of us should expect senators to vote only for bills that we personally support. They have their own beliefs and principles. But I do think it’s fair to expect them to vote only for bills that are consistent with those principles. This tax bill is not — not even close.

Finally, E.J. Dionne of The Post makes a direct appeal to Sen. John McCain. McCain could save the country from this terrible tax bill:

What can stop this duplicitous raid on the federal treasury? A mobilization at the grass-roots that tries to muster some of the energy that went into saving Obamacare would be helpful. But in the end, the honor of the Republican Party is in the hands of a small number of senators.

Sens. Bob Corker of Tennessee and Jeff Flake of Arizona have said over and over that (unlike their two-faced leaders) they actually do care about the deficit, even where this tax-cut bill is concerned. If they don’t vote against it, they will be enrolling in the Ryan-McConnell Deficit Prevarication Association. Sen. Susan Collins of Maine is as close as there is to a genuine moderate in the Senate GOP. Voting for this utterly immoderate scheme would mean tossing her moderate credentials into a bonfire.

But the man whose voice most needs to be heard is Arizona Sen. John McCain. Over the past few months, he really has been the conscience of the Senate. This summer, he gave a remarkable speech during the Obamacare debate in which he chided the party’s leadership for “asking us to swallow our doubts and force [the bill] past a unified opposition.”

“I don’t think that is going to work in the end,” he said, “and it probably shouldn’t.”

It definitely shouldn’t work on this Pay-Off-Our-Donors tax cut. More than anyone, McCain could give Corker, Flake and Collins the heart to follow their convictions.

UPDATE: Paul Krugman chimes in, The Biggest Tax Scam in History:

[I]t’s a giant scam. And while the exact nature of the scam may be unclear, ordinary American families would end up being the victims either way.

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So will [Republicans] manage to pull off this giant con job? The reason they’re rushing this to the Senate floor without a single hearing, without a full assessment from Congress’s own official scorekeepers, is their hope that they can pass the thing before people figure out what they’re up to.

And the question is whether there are enough Republican senators with principles, who believe that policies should not be sold with lies, to stop this bum’s rush.

Call Sens. John McCain and Jeff Flake now and demand that they vote against this terrible GOP tax bill.

The GOP tax bill is generational theft that steals from our future

Republicans only care about the federal deficit and national debt when Democrats are in charge of Congress and the White House.

When Republicans are in charge, “Reagan proved that deficits don’t matter,” as Dick Cheney infamously once said.

Remember when Republicans used to say that the national debt was “generational theft” from future generations of taxpayers? Funny how we are not hearing this from Republicans now.

But here is a recent example from Neal Urwitz at the conservative Newsmax, regarding the current GOP tax bill that will add another 1.5 trillion dollars plus to the national debt in order to give tax cuts to corporations and Plutocrats. It’s Not a Tax Cut — It’s Generational Theft:

Hey Baby Boomers — if you could stop stealing from my generation, we’d really appreciate it.

To be clear, I’m referring to President Trump’s tax-cut proposal. His proposal, if enacted, would increase the federal government deficit by trillions of dollars. Sure, the administration claims it’ll be revenue neutral, but there’s no way that’s true.

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So it’s simple math: taxing less + spending the same amount = massive deficit.

Sure, some people argue that the increased economic growth from tax cuts will make up the resulting deficit — this theory is known as the Laffer Curve — but even Republicans don’t really believe that anymore. The theory has simply been tried and failed too many times for anyone to reasonably think it’ll work this time.

To state the obvious, if we accumulate massive debt as a nation, someone has to pay the piper. And that is going to be all the generations after the Baby Boomers …

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The upshot is my generation will have to pay much higher taxes and will have less money for the things we’ll need in the future — like sophisticated defense, functioning education, homeland security, or fixing our crumbling infrastructure. Oh, and we’ll have to do it with anemic economic growth.

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GOP’s regressive tax bill worse than you imagined

You may have missed this over your Thanksgiving holiday, but Greg Sargent of the Washington Post has an important analysis about the GOP’s regressive tax bill. The Trump tax plan is much worse than you thought. A new analysis confirms it.:

The fate of the Senate GOP tax plan now rests in the hands of a few undecided Republican senators, and next week, they will make up their minds. But a new nonpartisan analysis of the plan will make it much, much harder for them to embrace it — or at least it should, if their stated principles mean anything at all.

Here is the key takeaway from the new analysis, which is the work of the Tax Policy Center: By 2027, around 50 percent of taxpayers will see a tax hike. The whole purpose of this tax increase is to make it possible for Senate Republicans to pass a tax cut that overwhelmingly benefits the very wealthiest taxpayers — on party lines, without any Democrats.

Using the data from the TPC’s analysis, I’ve created two charts that boil down the story of the Senate tax bill. The first chart details the average tax change for each major income group, by year, if the Senate plan becomes law, in dollars:

TaxPolicyCenter

This shows that in certain respects, the plan actually gets more regressive over time. The tax cuts for the four lower-income quintiles basically shrivel up and disappear by 2027, with the two lowest quintiles ultimately seeing either a tax hike or no change, while the middle and fourth see the tax cut dwindle away to almost nothing. By contrast, in 2027, the top one percent sees an average tax cut of more than $30,000, and the top 0.1 percent sees an average tax cut of more than $200,000 — more than double what it was in 2019, and a good deal more than it was in 2025.

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