New GOP tax cuts would add $3.8 trillion to deficit, says report
Budget hawk warns 'Tax Cuts 2.0.' would balloon debt
Advocacy groups worried about the deficit excoriated the Republican new plan to extend tax cuts, saying it would require the government to borrow trillions of dollars.
"This is a plan built on quicksand - sinking in the very debt that finances it,"said Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB). "Not only will it add hundreds of billions to the deficit, but it may actually slow long-term growth, especially if recent spending increases are also made permanent."
House Republicans unveiled a package of "Tax Reform 2.0" bills on Monday that would make some tax cuts from their 2017 tax overhaul permanent. The original tax law made some of the cuts temporary to comply with deficit rules the GOP needed to follow in order to side-step a Democratic filibuster of the law.
The Joint Committee on Taxation calculated that making such provisions permanent would cost $657 billion over a decade, but watchdogs say that the price will be much higher because the tax cuts only expire at the end of the ten-year budget window.
"Large as it is, this estimate significantly understates the long-term cost because the bill largely affects only the final three years of the 2019-2028 'budget window.' We estimate that the legislation would cost roughly $2.9 trillion over 2026 to 2035, the first full decade it would be in effect," said Center on Budget and Policy Priorities president Bob Greenstein.
CRFB estimated once interest was taken into account, the price tag would hit $5 trillion over 20 years.
"Another round of tax cuts financed with borrowed money is doubling down on fiscal irresponsibility," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation, another group focused on curbing debt.
"Tax cuts simply don't pay for themselves," he added, alluding to a common GOP talking point.
Republicans, who long hammered Democrats over debt, have been under fire for inflating the deficit.
The nonpartisan Congressional Budget Office (CBO) found that in the first 11 months of the 2018 fiscal year, which ends on September 30, the federal deficit hit $895 billion, nearly a third more than the same period the previous year.
The main drivers of the increasing debt were the GOP tax plan and a bipartisan agreement to increase discretionary spending.
While most Republicans remained mum on the matter, Senate hopeful Mitt Romney wrote a missive slamming his party for losing sight of fiscal conservatism ahead of the new tax plan's release.
"Republicans have been shouting about this as long as I can remember," Romney wrote on his campaign website Monday. "But now that Republicans are in charge in Washington, we appear to have become silent about deficits and debt."
Democrats slammed the Republican plan as fiscally irresponsible and regressive.
"With version 2.0 of the GOP tax scam for the rich, Republicans want to add even more to the deficit, and even more to the bank accounts of the wealthiest 1 percent. Then, Republicans will use the massive deficit from their tax scam to justify ransacking the Medicare, Medicaid and Social Security that seniors and working families rely on," said House Minority Leader Nancy Pelosi (D-Calif.).
Rep. John Yarmuth (D-Ky.), the ranking member of the House Budget Committee, also argued that the increasing debt would endanger popular mandatory spending programs.
"Just like their irresponsible tax cuts last year, this new tax plan showers benefits on the wealthiest Americans, while adding hundreds of billions of dollars to the nation's debt through 2028 and trillions more after that," he said. "When those bills come due, Republicans will try to pay them by attacking crucial programs American families rely on, and at the top of their list are Medicare and Social Security."