Republicans win crucial vote for tax cuts with new gimmick, but theres a catch
REBEKAH ENTRALGO at Politico
https://thinkprogress.org/republicans-secure-critical-vote-for-tax-cuts-with-new-gimmick-c89a20755873/
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The backstop details, like so much of the tax plan, are currently unknown. It isn’t known what would trigger the backstop, what kinds of taxes would be raised or size of the tax increases. But by ceding to Corker and Lankford’s concerns, Senate Republicans are, in effect, admitting the plan that they’ve touted as being a boon to both the middle class and the economy won’t actually do all that they said it will.
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The backstop would theoretically go into effect if the economy grows slowly. The reality is that if the economy is doing poorly, the last thing Congress would want to do is increase taxes and could easily cancel the increase. In this sense the details of the backstop do not matter because, practically speaking, it will never happen.
There is, however, already a backstop in place in the form of statutory pay-as-you-go (PAYGO), which could trigger deep spending cuts, including a $25 billion dollar cut to Medicare.
PAYGO rules require broad spending cuts of mandatory programs for any legislation that doesn’t pay for itself. Under these rules, the government would have to make $150 billion in mandatory spending cuts every year for the next 10 years. The programs at risk of getting cuts include Customs and Border Patrol, the Student Loan Administration and the Military Retirement Fund, among others.
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