The deep flaws in the Senate GOP's tax reform plan continue to emerge. The bill will trigger PAYGO and force devastating cuts to services like Medicare and student loan programs.
Since the tax plan adds $1.5 trillion to the deficit, it triggers a balanced budget law called “statutory pay-as-you-go” (or PAYGO). Under PAYGO, any legislation that increases the federal deficit must cover the costs of this deficit through mandatory cuts to existing programs.
According to the Committee for a Responsible Federal Budget, Medicare, agricultural subsidies, student loan programs, social service block grants, mandatory ACA spending, and many other programs could be slashed by a whopping $103 billion just next year. Medicare alone would face cuts of $28 billion in 2018.
Despite the plan's grave consequences, many senators from both parties reported being unaware of its PAYGO implications. I hope that Senators Young and Donnelly are aware of the harm that PAYGO-mandated cuts will do to vital programs like Medicare.