Trump-GOP Tax Plan Goes to House and Senate Conference Committee to Resolve

Exit to GOP BS re: Trickle Down Redux Since 1981

Trump and His BFF's Love It Why: Ka-Ching

As Republicans in the House and Senate hash out their tax bill differences in a conference committee behind closed doors, with the goal of producing a final bill before the holiday break, conservative economists tell TPM that the policies likely to become law will wreak havoc on the country for many years to come.

Though Republicans insisted repeatedly over the past few weeks that the $1.4 trillion in tax cuts, most of them geared toward wealthy individuals and corporations, would pay for themselves by stimulating economic growth, they presented no evidence to support their claims.

Instead, the economists and former government officials predicted, the bill will drive up the federal deficit, shrink and destabilize the health care market, exacerbate already historic income inequality, and pressure Congress to make deep cuts to the social safety net and government programs.

Comments by a few experts and also by a few GOP-Conservative Novices:

“I don’t see how this bill makes America great again,” said Bill Hoagland, a deficit hawk Republican who worked for decades for the Senate Budget Committee and now serves as the senior vice president of the Bipartisan Policy Center.
======================================================

“I am absolutely convinced that this bill will end up reducing the deficit,” Sen. Rob Portman (R-OH) told reporters. “I feel very good about the fiscal situation.”

“The JCT report is exceptionally shoddy,” Sen. Ted Cruz (R-TX).

“They’re always going to be wrong,” Sen. John Cornyn (R-TX), the Senate majority whip.
======================================================

Both conservative and moderate economists told TPM that they have seen nothing to support the lawmaker’s assertions, and called the bill “economically irresponsible.” 

Bruce Bartlett, an economic adviser to President Ronald Reagan who helped craft the 1986 tax bill, said such comparisons are extremely misleading and he added: “There is no historical evidence that any tax cut in history comes anywhere near paying for itself. At the most you get back a third of the revenue you lose, but that might be overly optimistic.”

Bartlett, went on to serve as a Treasury Department official under George H.W. Bush, continued: “When there is more slack in the economy, you get more bang for the buck. 

But there’s no reason to think that now, when we’re at a cyclical peak, that we’ll see any stimulative effect at all. If I were a corporate executive, I wouldn’t be building new factories for all the new sales I’m going to get.” 

Stan Collender, a former top staffer on the House and Senate Budget Committees, who worked under both Republican and Democratic administrations, said not only will the current bill fail to help the country, it will cause significant harm, adding: “Unless the laws of economics have been repealed, and not even Trump can do that, this has the potential for being one of the biggest disasters in American history. The pressure on Social Security and Medicaid is going to be pretty intense.” 

Even with unified Republican control, President Trump and Congress have failed repeatedly this year to pass any piece of major legislation. After multiple face-plants on attempts to repeal the Affordable Care Act, the pressure to pass something before the dawn of the 2018 midterm season ramped up significantly. And what better to bring together a fractious gang of Republicans than the Holy Grail of the GOP: tax cuts.

“They have to do this,” said Dan Scandling, who worked as a GOP House staffer for nearly 25 years. “This is what GOP candidate for years, for generations, have run on. Now that they have the House, Senate and White House, it’s time to put up or shut up.” 

Scandling concluded saying the 2018 election which House Republicans will have to slog through primaries from the right and general challenges from the left, has been the fire under the seats of wavering Republicans, overriding concerns about the federal deficit adding: “They know they would be decimated next fall if they did not deliver some form of tax reform. So they’re saying, ‘Trust us and it’ll work out in the end.'”   

But the gamble may not pay off as expected. If the tax bill becomes law, its impact will hit people across the country just a few months before they go to the polls.

Conclusion: 

1.  A lot of people will discover their home deduction is not allowed anymore.

2.  State and local income tax isn’t deductible anymore.

3.  It’s almost certain that interest rates are going to rise. 

4.  Homes will be more expensive. 

5.  Loans will be more expensive. 

6.  Car sales will go down. 

Republicans are really going to pay a political price (probably both ways: passage or not).

My 2 cents: what a frickin’ mess just to appease the top rung … as usual.

Stay tuned for the results, and thanks for stopping by.