Tuesday was one of those “roller coaster” days in Washington.
Here are some highlights:
Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) reached a limited deal to stabilize health care markets and preserve the cost-sharing reduction subsidies President Donald Trump canceled last week via executive order.
A federal judge in Hawaii blocked the latest incarnation of Trump’s travel ban hours before it was set to take effect.
Congressional Republicans are also now one step closer to instituting tax cuts for the wealthiest Americans after Senators John McCain (R-Ariz.) and Thad Cochran (R-Miss.) endorsed the GOP budget bill, opening debate.
The proposed budget Republicans unveiled last month takes aim at working families, the elderly, children, the sick, and poor with a $5.4 trillion cut over 10 years that would ratchet up defense spending and transfer wealth to the top one percent of the population.
In a statement, McCain said:
“I support the Senate budget resolution because it provides a path forward on tax reform. I have long supported efforts to fix our burdensome tax system and hope Congress will produce meaningful reform that simplifies the tax code, strengthens America’s middle class and boosts our economy.”
In a speech to the Heritage Foundation on Tuesday, President Trump commented:
“If we get the Republicans we need, which is virtually every single one of them…we will get that largest tax cut in the history of our country. And you will see things happen like have never happened before. We will have employment. We will have jobs. We will have companies moving back into our country.”
Republicans still have yet to create a tax cut plan or identify the trillions of dollars in tax deductions they anticipate eliminating.
Few, if any, Democrats are expected to support the tax plan, pushing back against the White House’s assertion that corporate tax cuts raise wages. But Democrats need some Republicans to oppose the plan if they are to see it fail.
Sen. McCain told reporters his vote is contingent, at least partially, on the amount of military spending the bill contains.
The bill is not a fait accompli, though, even with McCain and Cochran’s votes. Republicans control 52 of the Senate’s 100 seats, so they can afford to lose two votes and still pass the budget. Without Cochran, they could only afford to lose one.
Republicans cannot cut taxes without first passing the budget resolution. This creates an incentive for Congress members to support it.
Sen. Rand Paul (R-Ky.) opposes the budget in its current form, but voted to initiate debate after a conversation with the president.
House Speaker Rep. Paul Ryan (R-Wisc.) continues to oppose the bill. He said it must include substantial spending cuts before he would support it.
The report states:
“Tax cuts provide no durable solution to any genuine economic problem for America’s working families, but do make some genuine problems even worse.”
Under this plan, those already wealthy would see the most significant gains. Low- and middle-income families, however, would receive a pittance.
Since 1979, the wealthiest Americans have seen their incomes increase 160 percent. The middle 20 percent of families, however, have only achieved a modest 13.6 percent increase because of policy decisions that have transferred economic power away from low- and moderate-wage workers toward capital-owners and corporate managers.
In light of this, the EPI reports:
“Tax cuts for the rich would just further direct resources to the top of the income distribution, and would also provide even greater incentive for capital-owners and corporate managers to rig the economic rules to send more income their way. Solving the problem of degraded economic leverage leading to near-stagnant pay for the broad middle class should be the economic priority of Congress.”
According to EPI, the best investment is in low- and middle-income Americans’ financial security, not in the practice of handing more money to those who already literally have too much.
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