Republicans’ tax bill could trigger a $25 billion cut to Medicare

Tara Golshan · Tuesday, November 14, 2017, 4:35 pm

The Republican tax reform bill could trigger something President Donald Trump promised would never happen: an automatic $25 billion cut to Medicare.

Republicans are trying to pass a $1.5 trillion tax cut — which the Congressional Budget Office said Tuesday could trigger a sequestration across some major mandatory spending programs, like Medicare, federal student loans, and agriculture subsidies, and even some funding for customs and border patrol.

It all comes down to the “pay-as-you-go,” or PAYGO, rule — a 2010 law that says all passed legislation cannot collectively increase the estimated national debt. In other words, if Republicans want to pass a tax cut, they have to pay for it with mandatory spending cuts — or, inversely, if Congress boosts funding for entitlement programs, it has to increase taxes.

If Congress violates this law, the Office of Management and Budget, which keeps the deficit scorecard, “would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion,” the CBO said in a letter to Minority Whip Rep. Steny Hoyer (D-MD).

Republicans are already balking at the notion.

“No such thing is going to be triggered automatically,” Sen. Pat Toomey (R-PA), who sits on the Senate Budget Committee, told reporters about the CBO’s letter Tuesday.

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https://www.vox.com/policy-and-politics/2017/11/14/16651184/gop-tax-bill-medicare-cut-paygo