When President Trump and Congressional Republicans tried to repeal Obamacare earlier this year, the gross unfairness of taking healthcare away from 20-30 million Americans sparked outrage across the country. Members of Congress got an angry earful from constituents every time they went back home. Speaker Paul Ryan’s office got so many calls they had to shut the phone lines down. Despite multiple attempts to kill the Affordable Care Act, Republicans repeatedly failed under a crush of public pressure. Senators of conscience, including Sens. McCain, Murkowski, and Collins put principle over party and stood in opposition when it counted. That is precisely the kind of outrage we need right now as the Trump/GOP tax scam rolls toward passage.
In the face of overwhelming evidence that the Republican plan is a shamelessly giveaway to the wealthy and big corporations, the public must continue to apply as much pressure as possible on elected representatives. (The Senate GOP bill even includes a provision repealing Obamacare’s mandate, and the opposition must rise with equal fervor.) National Committee president Max Richtman sent a letter to the Senate yesterday urging that the bill be defeated.
Now is the time to seize on the opportunity to stop the Trump/GOP tax juggernaut before it wreaks permanent havoc on the lives of the poor, the sick, the working class, and the elderly. Yesterday the Senate Finance Committee advanced the bill to the floor on a 12-11 party-line vote. A handful of GOP Senators still oppose the plan, but the number is dwindling by the day and no doubt most of them will cave in the end. Meanwhile, in an effort to woo holdouts, Senate tax writers are making the bill even more generous to the wealthy.
“[A] change demanded by… two unhappy senators — Ron Johnson of Wisconsin and Steve Daines of Montana — would further lower the tax bills of people like President Trump who earn most of their income through limited liability companies, partnerships and other ‘pass through’ businesses that do not withhold taxes on the money passed along to their owners.” – New York Times, 11/28/17
One could rightly ask, where is the outrage on the part of deficit hawks and so-called GOP moderates? What does it even mean to be a moderate who could vote for such a regressive piece of legislation? Even Maine Senator Susan Collins is negotiating with tax writers instead of remaining firm in opposition. Hopes that the requisite three GOP Senators will retain the courage to buck this bill are fading fast.
We need to look past the obvious distractions of Trump’s latest tweets and petty feuds and keep our eye on the ball. The Trump/GOP tax scam is being served up for the benefit of billionaires and corporate titans in the party’s donor base. Republicans have admitted as much: big donations will dry up if they don’t get this done.
Months of careful and credible analysis has laid bare the truth about who will pay the price for this irresponsible legislation. While the 1% get trillions in tax relief, many working class Americans will see their taxes go up in the next ten years:
Almost every independent evaluation of the House and Senate plans has found a $1 trillion tax cut for corporations and changes to the individual tax code that would benefit wealthier Americans while leading to millions of middle-class and lower-income people paying higher taxes than they do now. – Dylan Scott, Vox
Those earning under $10,000 would see their taxes rise by a cumulative $100 million; those earning between $10,000 and $20,000 would see taxes rise by $638 million; those earning between $20,000 and $30,000 would see taxes rise by almost $1.2 billion; and those earning between $30,000 and $40,000 would see taxes rise by $653 billion. – Politifact.
According to Politifact, some 40 million Americans would pay higher taxes in 2027 than they would today. Older Americans would be hit particularly hard. Not only might their taxes go up if they are not fortunate enough to inhabit the upper income echelons, but the tax legislation would automatically trigger $25 billion in immediate cuts to Medicare. The projected $1.5 trillion the tax cuts would add to the national debt would no doubt spur Republicans to pursue even deeper cuts to seniors’ earned benefits, leading to benefit cuts and higher eligibility ages for Medicare and Social Security. Melissa Favreault of the nonpartisan Tax Policy Center warns:
Unless the tax cuts spur immense economic growth, which many prominent economists doubt based on decades of evidence, these cuts will harm future workers and Social Security and Medicare beneficiaries. – Melissa Favreault, Tax Policy Center
Not to mention that the Trump/GOP budget plan calls for over a trillion dollars in cuts to Medicaid, which millions of seniors rely on for long-term care. Is it fair to punish current and future generations of seniors so the rich and multinational corporations can pocket trillions they don’t even need?
Republican members of Congress continue to shill for the plan, perpetuating the lie that it provides significant tax relief for the middle class (it clearly doesn’t) or that it will grow the economy and create jobs (a myth disproven by history time and again). The mainstream media focuses largely on the “horse race” aspect of the tax debate – who’s up, who’s down, how badly President Trump and the GOP need a “win.” Meanwhile, we know who loses, including large swaths of President Trump’s own base in the working class, which is perhaps the most egregious betrayal of all. As Dylan Scott points out in Vox, candidate Trump promised to bring a new kind of populism to Washington. “The forgotten men and women of our country will be forgotten no longer,” said the President at his inaugural.
“Trump promised that the big, beautiful tax cut Republicans would pass would be a tax cut for the middle class. He went so far as to claim that he himself, allegedly worth $10 billion, would not benefit. He pledged that he wouldn’t be swayed by the Washington lobbying class.” – Dylan Scott, Vox
Those millions of working class Americans seem to have been all but forgotten now. The President and the Republicans in Congress are clearly hoping that most voters are, in fact, distracted or looking the other way as they pull off one of the biggest transfers of wealth in U.S. history. But we must not look the other way, or soon it will be too late.
Let’s start with the good news. Yesterday, voters in Maine overwhelmingly approved the expansion of Medicaid in their state (59% to 41%), bucking the will of Republican Governor Paul LePage. The Governor had vetoed Medicaid expansion five times, but the people had the final say in yesterday’s referendum. Now, some 70,000 Mainers should be newly eligible for Medicaid. That includes thousands of older residents not yet eligible for Medicare who can’t afford private health coverage. Forbes calls the outcome a “victory for Obamacare.”
A spokesman for the group that sponsored the ballot initiative starkly defined the stakes.
“Too many Mainers have already waited too long for health care. They shouldn’t have to wait any longer. The governor cannot ignore the law or the Constitution of Maine. Simply put, the governor does not have veto power of citizen’s initiatives and he cannot ignore the law.” – David Farmer, Maine Medicaid expansion advocate
The federal government will cover 90% of the cost of expansion, injecting nearly $500 million into Maine’s economy in the next two fiscal years. A recent study says those federal funds will generate 6,000 new jobs (mostly in the health sector).
Maine is the first state to expand Medicaid during the Trump administration, and also the first to do so via a ballot initiative than legislation. This offers a possible playbook for health care advocates in other states looking to extend coverage but stymied by political opposition. – Sarah Kliff, Vox 11/7/17
Of the 17 holdout states, Utah, Idaho, and Kansas may see Medicaid expansion on the ballot in 2018. Increased coverage, better access to care, and a huge economic boon should make this an obvious ‘yes’ vote – though outcomes are not guaranteed, especially without robust advocacy.
Advocates can expect the same kind of pushback from conservatives in these other states. Governor LaPage peddled the falsehood that the expansion would put an unsustainable financial burden on the Maine government. The Portland-Press Herald reports that the governor also perpetuated the myth that expanding Medicaid would give “free” healthcare to “able-bodied adults who can work and contribute to their own health insurance costs.”
And that leads us to some bad news, which is that the Trump administration is using that same canard to chip away at Medicaid in red states across the country. Seema Verma, administrator of the Centers for Medicare and Medicaid Services (CMS), announced a rule change this week that will allow states to impose work requirements on Medicaid beneficiaries. This supposes, of course, that there are legions of lazy Medicaid enrollees who could work, but just don’t want to – a total myth.
As Talking Points Memo reported, most adults on Medicaid suffer from some of disability and cannot work. According to a 2017 study by the Kaiser Family Foundation, only 27% of Medicaid beneficiaries are adults without disabilities. Of those, 60% are, in fact, working. Most of the recipients not working have one of the following extenuating circumstances:
- Caring for a family member full-time
- Lack of jobs in their area
- Criminal record prevents employment
The bottom line: most of the Medicaid recipients who can work do work
These new conditions will especially onerous for some six million older Americans (age 45-64) currently on Medicaid. This age group experiences more disability and chronic illness than younger recipients do. If forced to go without care because of new restrictions, they will arrive at the doorstep of Medicare in worse health, which can drive up program costs.
The Obama administration had it right, by allowing rule changes at the state level which “increase and strengthen overall coverage of low-income individuals” and “improve health outcomes for Medicaid and other low-income populations.” The Trump administration, under Verma’s leadership, is showing its contempt for the elderly and poor – and knee-jerk suspicion of federal programs that actually help society’s most vulnerable. What’s more, CMS’ new rules defy candidate Trump’s promises to “not touch your Medicaid.” But as we’ve seen with his pledges to protect Social Security and Medicare, the President’s promises are not worth the megabits they’re tweeted on.
In the latest in a series of “oops” moments for the GOP, Congressional leaders apparently didn’t realize that their deficit-swelling tax scheme would trigger $136 billion in automatic cuts to mandatory spending programs. This includes a $25 billion reduction in Medicare spending, which would take effect almost immediately after passage of the tax bill. Needless to say, that large a cut could be devastating to the 57 million seniors and disabled who rely on Medicare. As a consequence of cutting taxes for the wealthy and big corporations, it would also be grossly unfair.
The automatic cuts would kick-in thanks to the little-known PAYGO law, which, according to the Congressional Budget Office, “requires that new legislation enacted during a term of Congress does not collectively increase estimated deficits.” If such legislation produces a net increase in the deficit, the federal government is required to sequester enough funds to eliminate the overage; hence, the massive and instant cut to Medicare.
As we discussed on today’s Behind the Headlines on Facebook Live, seniors’ advocates are understandably alarmed. National Committee President Max Richtman issued the following wake-up call this morning:
“In their rush to enact a reckless tax bill, Congressional Republicans have overlooked a provision in federal budgetary law that would have immediate and devastating consequences for Medicare. Left uncorrected, this would not only be a bald-faced admission that tax breaks for the wealthy and big corporations are more important than medical care for seniors, but also a betrayal of President Trump’s promise not to touch Medicare.” – Max Richtman, National Committee president, 11/15/17
Richtman sent a letter to the House of Representatives today urging members to oppose the GOP’s “Robin Hood in Reverse” tax plan in its entirety – or at least stop the imminent cut to Medicare while they have the chance. The Congress can stop the sequestration – including the $25 billion hit to Medicare – when it enacts the tax plan. House Democratic Whip Steny Hoyer (D-MD) says that GOP leadership should at least have the common sense to do that.
“While it is possible to avoid the PAYGO enforcement cuts triggered by their added deficits, Republicans would need Democratic votes to do it, requiring them to abandon their go-it-alone partisan strategy, which is only leading them on a path to failure and to putting our country in danger.” – House Minority Whip Steny Hoyer, 11/14/17
Of course, the entire tax scheme – which is being rushed through Congress without regular order – is harmful to seniors’ health and retirement security either way. It eliminates the deduction for medical expenses like chronic and long-term care and balloons the deficit so that future Congresses will feel justified in raiding Social Security, Medicare and Medicaid to make up the difference. In fact, the tax plan presumes passage of the Scrooge-like Republican budget, which calls for $500 billion in Medicare cuts and slashes Medicaid by a whopping $1 trillion. In effect, Republicans are asking seniors, the disabled, and the poor to pay for the lion’s share of a cut for the super-rich. Not to mention that some 36 million middle class Americans will actually see their taxes go up under the GOP plan.
None of these groups – the poor, the middle class, the disabled, or seniors – should be asked to shoulder this burden for a tax cut the wealthy and big corporations don’t need. As Max Richtman writes in his letter to Congress:
Medicare beneficiaries cannot afford to pay more for less coverage – particularly when half of them have incomes of less than $26,200 a year and spend 25 percent of their Social Security check to pay for Medicare Parts B and D out-of-pocket costs for premiums and cost-sharing amounts.
Regarding Medicaid, middle-class Americans often rely on the program for long-term services and supports when they exhaust their savings. Nearly two-thirds of all nursing home residents’ care is financed in whole or in part by Medicaid. In addition, Medicaid provides home and community-based services that allow seniors to stay in their homes. The fiscal crisis created by the tax bill is likely to result in a [trillion-dollar] cut to Medicaid that will limit seniors’ access to long-term care services. – Max Richtman’s Letter to Congress, 11/15/17
The public seems to grasp the gross unfairness of the Republican tax scheme. A just-released Quinnipiac poll indicates that only 25% favor the GOP plan while 52% oppose it. Meanwhile, GOP leadership has made it clear that they are not beholden to ordinary Americans, but their wealthy and powerful donors: a glaring case of backward priorities on Capitol Hill.
Seniors and other vulnerable Americans will be hurt if the just-released GOP tax scheme is enacted. National Committee president Max Richtman told a hearing room full of Senators – including Sen. Ron Wyden (D-WA), Sen. Elizabeth Warren (D-MA), Sen. Debbie Stabenow (D-MI), Sen. Mazie Hirono (D-HI), Sen. Amy Klobuchar (D-MN), Sen. Bill Nelson (D-FL), and Sen. Chris Van Hollen (D-MD) – that the Republicans’ budget and tax legislation must be defeated.
“The Republican budget and tax plans allow [Congress] to slash programs critical to older Americans and people with disabilities – all to pay for massive tax cuts for the very wealthy and profitable corporations.” – Max Richtman, 11/1/17
We analyzed the harm that the GOP proposals would wreak on older Americans in a post last week, entitled GOP Budget Resolution a “Lump of Coal” for Seniors, Middle Class. Among the more heinous measures, Republicans seek to cut nearly $500 billion from Medicare, $1.3 trillion from Medicaid, more than $600 billion from Social Security Disability Insurance (SSDI), and will likely slash billions from other programs that seniors rely on for financial and health security.
Richtman told the Senators that Medicare beneficiaries “cannot afford to pay more for less coverage” – particularly when half of them have incomes of less than $26,200 a year and spend 25 percent of their Social Security check to pay for Medicare premiums and cost-sharing. “And they cannot afford cuts to Medicare such as those assumed in the House budget – turning Medicare into a voucher program and raising the eligibility age from 65 to 67,” he explained.
What’s more, the tax plan will increase the national debt and compel Republicans to cut seniors’ earned benefits more aggressively in the future – even though Social Security and Medicare Part A are self-financed and do not contribute to federal budget deficits.
“By increasing the federal budget deficit by at least $1.5 trillion, this measure would leave Social Security, Medicare and Medicaid vulnerable to benefit cuts to make up the difference.” – Max Richtman, 11/1/17
Under the tax bill supported by President Trump and congressional Republicans, the nonpartisan Tax Policy Center estimates the top one percent of Americans would receive 80 percent of the tax cuts. For the top one percent, the average annual tax cut would be over $200,000 by 2027.
The bottom 80 percent of Americans would receive 13 percent of the tax cuts. In fact, 115 million households earning less than $75,000 a year would receive a tax cut of just $190 on average. But ultimately, most Americans would lose much more in program cuts than they would gain from tax cuts.
Richtman implored Congress to resist this reckless legislation:
“The National Committee urges all Senators and Representatives to oppose legislation to enact these ‘Robin Hood-in-Reverse’ budget and tax proposals and instead work together to protect the retirement and health security commitments made to generations of Americans.” – Max Richtman, 11/1/17
While the media have been largely consumed by the latest outrages from the White House, Republicans in Congress have been quietly working to radically redesign our tax code and cut trillions in spending that benefits ordinary Americans, including and especially seniors. With little fanfare, the Senate voted 51-49 last week to pass a cynical budget resolution that’s really a Trojan Horse for tax cuts for the wealthy and big corporations. Yesterday, the House followed suit by a vote of 216-212.
Had a few votes gone the other way, these plans would have been stopped dead in their tracks, as we witnessed with Obamacare repeal. But the public wasn’t paying much attention, and the pressure on Congress to vote in the public interest was nowhere near as intense.
Even if some of the more heinous budget cuts fall away, the resolution is an unsettling declaration of priorities that can only be described as mean-spirited and immoral. As Dylan Scott keenly observes in Vox:
The budget stands as a vision of what the Republican majority wants to do, and perhaps would do if it had eight or nine more votes in the Senate. It suggests that basically every Republican in each chamber (the only senator opposed was Rand Paul, who wanted deeper cuts) is comfortable aligning himself or herself with an agenda that radically cuts the social safety net for… retirees and the middle class. – Dylan Scott in Vox, 10/26/17
The GOP budget and tax scheme, which leadership would like to pass before the holidays, has been rightly described as a “lump of coal for the middle class.” Yes, the tax plan is a big, fat Christmas gift to the wealthy, wrapped in a package of distortions. Despite President Trump’s disingenuous claim that it helps middle income earners, 80% of the tax savings goes to the wealthiest 1% of the American people. The rest get only a trickle of tax relief.
Tax policy that benefits the middle class, including deductions for state and local taxes, goes out the window in this plan. So might existing exemptions for 401K contributions, currently set at $18,000 per year. GOP leaders have talked about significantly reducing the amount of pre-tax contributions people can make, reportedly to $2,400 per year. (The exact details are secret, of course, until the plan is unveiled on November 1st.) The party of personal responsibility is actually proposing to penalize Americans for saving for retirement – as some 50 million of us now do to the tune of $67 billion in tax savings per year.
The GOP would pay for massive tax breaks for the rich by cutting essential safety net programs for seniors and other vulnerable Americans. These are among the Scrooge-like proposals in the budget plan:
*Cuts nearly $500 billion from Medicare by privatizing the program and raising the eligibility age.
*Cuts $1.3 trillion from Medicaid over ten years, jeopardizing long term care services and supports for the elderly.
*Cuts $653 in Supplemental Security Income (SSI) for some 8 million low-income seniors and people with disabilities.
*Will likely require cuts in in Older Americans Act programs (e.g., Meals on Wheels), home heating assistance for seniors, and research into diseases affecting the elderly, including Alzheimer’s and cancer.
Meanwhile, the supposedly budget-conscious GOP has voted to allow itself to deficit-fund $1.5 trillion of the tax cut package. As the hole in the deficit grows, Republicans will then be able to come after Americans’ earned benefits – Social Security and Medicare – to try to close the gap, even though Social Security and Medicare Part A are self-funded and don’t affect general revenues.
Of course, the long-planned assault on Medicare has already begun – with new viability now that Republicans control all branches of government. The budget resolution contains oft-told prevarications about the program:
“Medicare spending is on an unsustainable course… Given this untenable situation, the budget resolution supports work by the authorizing committees to recommend legislative solutions extending Medicare’s solvency in the near term, while pursuing policies that place the program on a sustainable long-term path.” – GOP 2018 Budget Resolution
The way to strengthen Medicare now and for the future is to keep the Affordable Care Act in place (which is already saving Medicare hundreds of billions) and allow the government to negotiate prescription drug prices with drug companies, for starters.
Because Congressional leadership is forcing reckless tax cuts through the reconciliation process (where measures can pass the Senate with a simple majority), Democrats will be unable to impede this cruel juggernaut. As we saw in the Obamacare repeal battle, it will once again fall to a handful of Republicans of conscience to put the brakes on unfair tax and budget cuts. But they will do so only if they hear loudly and clearly from all of us.