Politics: GOP leader concedes tax cuts may not pay for themselves as 2019 deficit grows - PressFrom - US

PoliticsGOP leader concedes tax cuts may not pay for themselves as 2019 deficit grows

00:55  12 june  2019
00:55  12 june  2019 Source:   washingtonpost.com

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Republicans claimed that the new Tax Cuts and Jobs Act would pay for itself or even decrease the federal deficit . A primary reason for the increase in the deficit was a decrease in revenue due to the GOP tax law. The evidence so far contradicts Republicans leaders and the Trump administration's

The theory: tax cuts can pay for themselves . Trump administration advisers have repeated this mantra to explain I would love it if tax cuts paid for themselves , but I'm also someone who looks at the numbers. This text may not be in its final form and may be updated or revised in the future.

GOP leader concedes tax cuts may not pay for themselves as 2019 deficit grows© Jonathan Ernst/Reuters U.S. House Ways and Means Committee Ranking Member Representative Kevin Brady (R-TX) sits for an onstage interview about the U.S. budget at the Peterson Foundation’s annual Fiscal Summit in Washington on June 11, 2019. (Jonathan Ernst/Reuters).

Rep. Kevin Brady (R-Tex.), a lead architect of the GOP tax bill, suggested Tuesday the tax cuts may not fully pay for themselves, contradicting a promise Republicans made repeatedly while pushing the law in late 2017.

Pressed about what portion of the tax cuts were fully paid for, Brady said it was “hard to know."

“We will know in year 8, 9 or 10 what revenues it brought in to the government over time. So it’s way too early to tell,” said Brady at the Peterson Foundation’s annual Fiscal Summit in Washington D.C.

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The federal deficit grew to 9 billion in the 2018 fiscal year. That's according to new numbers from the Expectations are they'll raise interest rates perhaps another percentage point in 2019 . KING: I mean, David, advocates of these tax cuts said, look, they're going to pay for themselves because

The Treasury Department on Monday estimated that Republican tax cuts will pay for themselves through growth — but it assumes other It's unlikely that Congress will pass the White House budget as proposed, and there is no guarantee that GOP lawmakers will adopt the infrastructure package that

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The federal government’s deficit typically shrinks during strong economic times, but the deficit is up nearly 40 percent so far this fiscal year, according to the latest Congressional Budget Office report released Friday.

Spending is up $255 billion for the first eight months of the fiscal year, the CBO said, while revenues are up only $49 billion. Corporate tax receipts are down after Republicans enacted the largest reduction in business taxes in U.S. history. Individual income taxes are basically flat this year (they are growing less than the rate of inflation). Most of the revenue increase is coming from President Trump’s tariffs and more payroll taxes, which were not cut in the tax bill.

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Those effects will only partially offset the deficit cost of the tax cuts . The administration had promised the cuts would pay for themselves . Many economists believe that if deficits continue to rise and the national debt grows , government borrowing will "crowd out" private lending and force up interest rates.

Fitch says the GOP tax cuts may lead to only a "short-term" boost in economic output. Republicans backing the bill have contended the plan will boost the economy and cancel out most or all of the deficit increase over time. The proposed Republican tax cuts will not pay for themselves through growth

“Revenue fell, it didn’t rise, after the tax cuts,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

Brady’s comments are a marked departure from the claim many Republicans made during the tax bill debate that the tax cuts would be fully paid for by additional economic growth that would, in turn, spur additional tax revenues for government coffers.

Numerous independent analyses concluded that the tax bill would add substantially to the U.S. debt, which currently stands at $22 trillion. CBO estimated the total cost of the Tax Cuts and Jobs Act is $1.9 trillion — after taking into account additional growth and interest payments.

“Anybody who tells you the fact the tax cuts are going to pay for themselves. It’s not true. It’s nonsense. You can use the full words of B.S.,” said House Speaker Nancy Pelosi (D-Calif). in an appearance at the Fiscal Summit shortly after Brady.

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GOP tax cuts are expanding the deficit . Had the tax changes not been enacted, the federal deficit in 2018 would have dropped to well The House passed this bill just before it recessed for the midterm elections, and the scuttlebutt I hear from budget insiders is that Republican leaders are seriously

For tax cuts to pay for themselves within ten years, they would have to spur enough additional economic growth for The key finding is that tax cuts will eventually pay for themselves . It just takes more than the ten years Congress Now, some people might say that the above analysis is flawed.

But Brady said it was important to consider whether the tax cuts were a good investment. He argued there are “very encouraging” signs that the economy is performing better after the tax cuts with strong job growth, improved wage growth and higher business investment.

“I don’t think anything could have been worse for the deficit than to stick with the old economy and stick with the tax code that was so outdated,” said Brady, who pointed to higher payroll tax collection as a sign more people are working now.

The economy expanded at a rate of 2.9 percent last year, up from 2.2 in 2017 and 1.6 in 2016, according to the Commerce Department. The White House predicts 3 percent growth for years to come, but nearly all independent economists expect growth to be closer to 2 percent for much of the next decade.

Republicans say the federal government has a spending problem and needs to scale back while many Democrats want to see higher taxes, especially on wealthier households.

The GOP-controlled Senate, the Democrat-controlled House and the White House are currently in the midst of tough negotiations on the 2020 budget plan that is supposed to take effect on Oct. 1. If no agreement is reached, automatic caps will take effect that reduce both domestic and military spending by a total of $125 billion, a scenario few want in the run up to an election year.

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Tax cuts pay for themselves , they argue. Thus, to prevent the budget deficit from increasing, tax cuts would need to be offset by spending More money can be added or not while economic growth is taking place, and economic growth may or may not take place when the money supply is increased

It appears that the tax cuts are not paying for themselves as promised. Do you still think the GOP is the party of fiscal responsibility? Washington has become the city of excess. Neither party cares about the deficit or our ever exploding national debt. This will destroy our nation in the long run, they

House Budget Chair John Yarmuth (D-Ky.) said the negotiations are “not going very well” so far.

“I don’t think there would be any problem at all getting Senate and House agreement on funding levels,” said Yarmuth, but he called the White House “unpredictable.”

The expectation is that Congress and the White House will eventually agree to lift spending even higher than it is now for both military and domestic programs. Yarmuth’s proposal would raise spending by about the same amount as the GOP tax cuts for the next decade, according to the Committee for a Responsible Federal Budget.

“There is no center of gravity to reduce spending in this town,” said Mick Mulvaney, Trump’s acting chief of staff at the Fiscal Summit.

Mulvaney, a former GOP congressman who pushed back aggressively against President Obama for smaller budgets, called Trump’s budgets the “most fiscally responsible budgets that have ever been drafted.”

But experts disagreed, pointing out that the president’s budgets relied on very optimistic growth assumptions and hefty cuts to domestic programs that were a non-starter in Congress. The budget deficit is up more than 80 percent so far this fiscal year over the same period in 2016 before Trump took office.


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