Senate Dem Leaders Sound Alarm on Trump Admin’s Tax Plan to Add Trillions to National Debt, Say Plan is Trojan Horse for GOP to Slash Social Security, Medicare, Medicaid and Other Middle-Class Priorities Down the Road
WASHINGTON, D.C. – Senate Democratic Leaders today released a new letter to Treasury Secretary Steve Mnuchin and Office of Management and Budget (OMB) Director Mick Mulvaney expressing concern with the Trump Administration’s recent tax proposal, which would add at least $5.5 trillion to the national debt to finance massive tax breaks to the wealthiest Americans while threatening deep cuts to Social Security, Medicare, Medicaid and other middle-class priorities. Specifically, Senate Democrats are concerned that the Trump Administration’s and Congressional Republicans’ eagerness for deficit-financed tax cuts for the wealthiest could give them an excuse down the road to make new attempts to cut entitlement programs like Social Security, Medicare, Medicaid in the future.
The letter was signed by Senate Democratic Leader Chuck Schumer, Senators Dick Durbin, Patty Murray, Debbie Stabenow, Elizabeth Warren, Mark Warner, Amy Klobuchar, Bernie Sanders, Tammy Baldwin, Senate Committee on Finance Ranking Member Ron Wyden and Senate Committee on Banking, Housing and Urban Affairs Ranking Member Sherrod Brown.
The text of the Senate Democrats’ letter can be found below:
Dear Secretary Mnuchin and Director Mulvaney:
We write to express our concern that your new deficit-exploding proposal to hand out massive tax breaks to millionaires and billionaires will threaten deep cuts to Social Security, Medicare, Medicaid and other middle-class priorities. We are also concerned that the proposal will provide large tax benefits to the President and his domestic business interests.
In past years, Republicans forced large tax breaks through Congress that ballooned the federal budget deficit and added trillions to our national debt. This does not qualify as tax reform. We are deeply worried that today’s eagerness for deficit-financed tax cuts for those at the top will result in a later push by Republicans and the Administration for deep cuts to Social Security, Medicare, Medicaid and other critical public investments to curb the growing deficit. Preliminary estimates already suggest this plan will cost at least $5.5 trillion.
In fact, we believe the proposed 15% tax rate on business income will undermine Social Security and Medicare directly. This is because taxpayers will have a keen incentive to reclassify compensation – which would otherwise be subject to FICA taxes and a top ordinary income tax rate of 35% under the proposal – to pass through income, which would only be subject to the 15% tax rate. Social Security and Medicare are funded by both payroll taxes and income taxes.
The super-wealthy have done extraordinarily well in recent years, even increasing their earnings and share of national wealth after the Great Recession. Meanwhile, middle-class families are working harder than ever to make ends meet, and older Americans are increasingly reliant on Social Security and Medicare to provide a secure retirement. Given these realities, we should be focusing on ways to create jobs and allow more people to enjoy the benefits of their hard work, rather than handing out tax cuts for millionaires and billionaires.
We are eager to work on proposals to simplify the tax code, strengthen the economy, increase American competitiveness and provide mobility and opportunity to working families. But you should not expect our help in efforts to blow up the deficit and lay the groundwork for deep cuts to Social Security, Medicare, Medicaid, education, and other programs that help hardworking American families.
Sincerely,
Senator Charles E. Schumer
Senator Dick Durbin
Senator Patty Murray
Senator Debbie Stabenow
Senator Elizabeth Warren
Senator Mark Warner
Senator Amy Klobuchar
Senator Bernie Sanders
Senator Tammy Baldwin
Senator Ron Wyden
Senator Sherrod Brown
