May 25, 2017
Trump's Budget - A Disaster
By Mike McManus
The proposed Federal budget is very much like the President - packed
with unbelievable lies. Four examples:
First, the proposed budget would end the estate tax, which is paid only
on estates worth more than $5.45 million. However, ending that tax would
add $300 billion to the deficit over a decade. Yet the Trump budget
counts $300 billion in revenue from the estate tax over 10 years. Either
Trump lied in saying the estate tax was ending or he is lying in saying
the deficit will not grow by $300 billion!
Second, Trump says he will have a balanced budget with no federal
deficit in 10 years - a commendable goal. However the federal deficit
for 2017 is $603 billion, and is projected to be $500 billion a year
initially, rising to $1.7 trillion by 2027 if Trump tax cuts and
spending increases are approved.
A balanced budget in a decade is a HUGE lie.
Trump proposes spending increases that total $717 billion over a decade,
such as a $469 billion hike in military spending; a $200 billion
investment in infrastructure; and one I favor, a $19 billion paid
parental leave program.
He also proposes doubling the standard deduction for individuals,
essentially eliminating taxes on $24,000 of a couple's earnings.
Millions would no longer pay federal income taxes.
Individual tax brackets would shrink from seven to three - 10%, 25% and
35%, further easing the tax burden on most Americans who now pay up to
39.6%. In another boon for wealthier taxpayers, it would repeal the 3.8%
tax on investment income imposed by Obamacare - a tax most people never
In addition, Trump proposes cutting the corporate tax rate from 35%
(which is one of the highest in the world) - to only 15%. Corporations
would also not have to pay taxes on their foreign profits. They would
also enjoy a special, one-time opportunity to bring home perhaps a
trillion dollars that they are "parking" overseas - at a very low rate.
The Tax Policy Center estimated that the corporate tax cuts and the
elimination of alternative minimum tax would cost $2.4 trillion over a
However, Steven Mnuchin, the Secretary of the Treasury, said he was
confident the Administration's tax proposal would "pay for itself"
through economic growth. He asserted it would spur the economy to grow
at 3% annually - up from the current 2%. "The economic plan under Trump
will grow the economy and will create massive amounts of revenues,
trillions of dollars in additional revenues," Mnuchin declared.
That's the third big lie.
Maya MacGuineas, president of the nonpartisan Committee for a
Responsible Federal Budget, wrote in a New York Times column this week
that the 3% growth rate is "a full percentage point above what the
Congressional Budget Office forecasts. With baby boomers leaving the
work force, demographics are destiny, and there is no reliable plan to
increase growth that much.
She added, "Furthermore, these numbers come before what the White House
has promised to be `one of the biggest tax cuts in American history,'
which is conspicuously missing from the budget altogether. Indeed, the
budget seems to assume tax cuts will increase revenues."
There's a fourth lie - tax cuts that are bragged about, but not counted
in the budget!
The Administration is also proposing massive cuts in certain types of
federal spending that would reduce the deficit. First, he would "repeal
and replace" Obamacare, saving $1.25 trillion over a decade. The House
bill that accomplishes that goal will force 23 million people to lose
health insurance, according to an estimate by the Congressional Budget
Office this week.
It would also weaken Obamacare's protection for people with pre-existing
conditions, while providing large tax cuts for the upper 1%. The
Administration also proposes $610 billion in additional Medicaid cuts,
for a total savings of $1.85 trillion in health care.
Trump's budget would also devastate the poor. It would cut the Food
Stamp program by $193 billion over a decade - more than a 25% cut. One
part of that would shift the cost to states of $116 billion. Large cuts
in housing vouchers would eliminate them for 250,000 poor families. The
Low Income Home Energy Assistance Program which helps millions pay
heating bills - would be eliminated.
The State Department would have to cut 29% of its budget, and the
Environmental Protection Agency would suffer a 31% slash. Social
Security's disability program would be cut $48 billion.
Hopefully, the Republican House and Senate will expose most of these
lies and toss mean-spirited proposals out the window. If they don't,
taxpayers will replace them with Democrats in 2018.
Copyright (c) 2017 Michael J. McManus,
President of Marriage Savers and a syndicated columnist. For previous
columns go to
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