Report: GOP Tax Plan Could Add $2 Trillion To Deficit

Report: GOP Tax Plan Could Add $2 Trillion To Deficit Promo Image

Republican lawmakers are proposing a tax plan that they acknowledge would add up to $1.5 trillion to the U.S. federal deficit while independent analyses have estimated that the tab would go over $2 trillion. Democratic lawmakers have accused their GOP colleagues of hypocrisy on adding to the deficit while the Trump administration has asserted that the tax plan would compensate for lost revenues by stimulating economic growth.

On Oct. 5, the GOP-majority House pushed through a 2018 budget blueprint by a vote of 219 to 206. The legislation was designed to serve as a framework for Senate Republicans to pass a new tax plan. The GOP-majority Senate currently aims to overhaul the U.S. tax code through budget reconciliation, a process that would require a simple majority and would therefore not require any support from Democrats, Reuters reports.

Senate Republicans have proposed a tax plan that they said would slash federal revenues by $1.5 trillion by 2027. President Donald Trump's administration backs the plan, but the nonpartisan think tank Tax Policy Center estimated that the plan would add $2.4 trillion to the deficit over the same timeframe and that the top 0.1 percent of income earners would receive 50 percent of the benefits.

The House majority leader, GOP Rep. Paul Ryan of Wisconsin, blasted the TPC analysis, asserting that the think tank was "an anti-reform, propaganda group."

TPC Director Mark Mazur noted that his think tank conducted its analysis from a rough outline of the GOP tax plan, but said he stood by its findings.

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"Where we came out on the results -- that the tax plan as it stands right now would lose a lot of revenue and have the benefits tilted toward high-income taxpayers -- those are directionally correct," Mazur told Business Insider.

Another nonpartisan group, the Committee for a Responsible Federal Budget, estimated that the Trump administration tax plan would result in $2.2 trillion in lost revenue over a decade.

Ryan, who had repeatedly warned of rising deficits throughout the Obama administration, asserted in an interview that the tax cuts in the GOP plan would not add to the deficit because its tax cuts would stimulate economic growth, offsetting any lost revenues.

"If this results in giving us faster economic growth, that will help us reduce our debt," Ryan told CBS News.

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White House Office and Management and Budget Director Mick Mulvaney, who  warned of rising deficits as a congressman during the Obama administration, asserted that the tax cuts needed to add to the deficit in order to spur economic growth.

"We need to have new deficits ... If we simply look at this as being deficit-neutral, you're never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth," Mulvaney told Fox News.

Meanwhile, Democratic lawmakers have blasted the GOP tax plan, asserting that their conservative colleagues were being disingenuous about the impact it would have on the deficit.

"Republicans spent years pretending to care about the deficit when it came to making cuts to middle class priorities, but the minute it came to handing tax breaks to the rich, that all went out the window," Democratic Sen. Patty Murray told the Los Angeles Times.

"Republicans have for years railed against deficits," said Democratic Rep. Linda Sanchez of California. "You're going to have less revenue and more deficits."

Sources: Business Insider (2), CBS News, Fox NewsLos Angeles Times, Reuters / Featured Image: Gage Skidmore/Flickr, The White House/Flickr

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