by Pamela Williams
First of all, I blame Paul Ryan for hindering President Trump’s most valiant efforts to truly help the American people. I am speaking of Trump’s policy changes on ObamaCare and tax cuts for the American people. These things would help the American people more than anything Trump could do.
Matt Drudge took to Twitter to blast Congress for hanging the new president “out to dry” by failing to move on ObamaCare and other agenda items. Drudge included a photo of House Speaker Paul Ryan (R-WI) in the tweets.
Drudge tweeted: “Congress hanging The Donald out to dry. Making him do everything alone! Despicable. No tax cuts, no Obamacare repeal. NOTHING,” Drudge, a Trump supporter, said on Twitter.
Trump has been president for just over a full week and has signed a raft of executive orders and actions to implement some of the policies he campaigned on. But some of his campaign promises, like repealing Obamacare and big tax cuts, require action from Congress. However, Congress is simply not addressing them. The American people are very anxious to see progress, but it is usual for our politicians not to care.
Senator Rand Paul is a good man, and he is furious with Congress, and he is letting them have it.
This week, Sen. Rand Paul (my former boss, it should be pointed out) stormed out of a meeting with Speaker of the House Paul Ryan when he heard talk of keeping Obamacare’s Medicaid expansion intact and creating tax credits. Paul worried these tax credits would be a Republican-created entitlement program.
Unfortunately, the leadership and establishment in the Republican party is incompetent. When you compare the accomplishments of President Barack Obama at the same point in his presidency as President Donald Trump, it shows that Republicans are not doing their job.
Lets get back to Paul Ryan.
The Republican Party has been organized around the goal of reducing taxes for the affluent for more than a quarter-century. The last time Republicans had full control of government, they poured their energy into passing huge, regressive tax cuts, first in 2001 and again in 2003. The return of Republican government makes it virtually certain that regressive tax cuts will pass again — the new majority can imagine no more compelling use of their power. But the task of enacting the tax cuts into law is proving to be more difficult than it was the last time around.
The basic House Republican plan is to cut taxes by about $3 trillion over a decade. Basically the entire proceeds of their plan would go to the rich — once it’s fully phased in, the highest-earning one percent would get 99.6 percent of the benefit, according to the Tax Policy Center’s analysis of the plan last fall. Republicans will surely tweak that plan, but it contains all the elements of the ideas they have been longing to enact: reducing the top tax rate, eliminating the tax on inheritances worth more than $10 million, reducing taxes on capital, and so on. The drive to cut these taxes reflects the party’s deep beliefs that overtaxation of the rich is the most serious form of oppression in modern political life, and they are prepared to spend enormous political capital to rectify this evil.
There is essentially no dissent within the Washington Republican Party — including both Congress or the White House — on this overarching goal. The difficulty lies in the practical implementation. Republicans are struggling because they want to avoid replicating what turned out to be the fatal weakness of the Bush tax cuts. Republicans know that they won’t get Democratic support for a big tax cut for the rich, and since Democrats have 48 Senate votes, well more than the 41 needed to sustain a filibuster, Republicans need to pass their tax cuts in a bill that can evade a filibuster. The only kind of bill that can do this is a budget-reconciliation bill. But budget-reconciliation bills have certain restrictions on their design, called “the Byrd Rule.” One of those restrictions is that they cannot increase the budget deficit outside of the ten-year period after which they are passed. A reconciliation bill can increase deficits in the short run, but if it has any costs after a decade, it can be filibustered, and is therefore useless for Republican purposes.
In 2001, Republicans dealt with this problem by simply ending their tax cuts after ten years. The Bush tax cuts had no budget costs after the ten-year window because the tax cuts disappeared. They hoped the tax cuts would attract enough political support that they would automatically be extended, but this never happened. The Bush tax cuts produced an anemic recovery, not the robust growth Republicans promised, and the Democratic Party coalesced around plans to eliminate the portion of the tax cuts that benefited only the highest earners (while keeping intact the tax cuts that also benefited the middle class). Since the tax cuts expired automatically, Democrats did not need to hold a vote to phase them out.
Republicans hope to avoid such a fate for the Trump tax cuts. Their hope is to design tax cuts that technically do not lose any revenue, which would allow them to be permanent, and force Democrats to gain control of the House, Senate, and presidency in order to overturn them.
How do you design a huge tax cut for rich people without losing a lot of revenue? Republicans are looking at three pots of money to offset the cost: Dynamic scoring, Obamacare taxes, and a border-adjustment tax.
The next source of money is repealing Obamacare. The connection between the two issues might seem obscure, but it matters technically. The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.
Obamacare repeal was expected to be a rapid step, already wrapping up by now. Instead it is a quagmire with no end in sight. Of the many reasons the repeal crusade is failing, one of them is that the revenue trick is a little too clever. Some Republicans realize that if they repeal all of Obamacare’s taxes first, they’ll have no way to pay for a replacement plan later. So, as Obamacare bogs down, it has also bogged down what was supposed to be a rapid-fire progression to tax reform. (Budget expert Stan Collender has pointed out that the Republicans have designed an intricate legislative sequence to enact their plans that might collapse altogether.)
So where does that leave them? Probably in the same place they were in 2001. They could scale back on the tax cuts for the rich, but that would run counter to every impulse within the Republican Party. You will pry the tax cuts for the rich from Paul Ryan’s cold, dead hands. If Ryan’s plan fails, the next best thing to passing enormous, permanent tax cuts to the rich is to pass enormous, temporary tax cuts for the rich. If Obamacare repeal and the border-adjustment tax flounder, Congress will probably just go back to what worked (or, if you prefer, “worked”) 16 years ago. Republicans have control of Congress, and even if nothing else comes out of it and everything else falls part, the richest one percent are going to get paid.
In conclusion, I am not hopeful, and I hold Paul Ryan responsible. They are all corrupt!
Delaying Trump’s tax cuts is a huge risk – TRUMP NEWS.
Bad news: Congress is putting tax cuts on the back burner for now — a big risk.
House Speaker Paul Ryan says lawmakers will focus first on replacing .?.?. er, “repairing” ObamaCare and on President Trump’s infrastructure plans, and only take up tax bills sometime in the spring.
That means Trump won’t be able to sign anything until before the fall — at the earliest, if no other delays pop up.
Yes, the president’s early moves on deregulation and energy should boost growth, and a few industries are salivating at the thought of big infrastructure spending.
But Trump also clearly means his promises on trade and immigration, too — which has other industries nervous.
The absence of any big supply-siders in the president’s economic team is further cause for concern, as is the way the White House has taken to talking about “tax relief” rather than “tax reform.” The hunger for some details — will the cuts be retroactive to Jan. 1? — adds to the uncertainty, which is always bad for business.
Yes, the Dow is up, thanks to optimism over the Trump program. But major tax cuts were a big part of that program — and if they don’t land in good time, or turn out not to be major, pessimism can quickly return.
If Hillary Clinton had won, the US economy would probably be facing recession soon: The Obama recovery, weak though it is, has been going on that long. It’s going to take serious change to produce a boom.