President And GOP Lawmakers Lied: 2017 GOP Tax Cuts Did Not Pay For Itself/ Deficit Is Way Up

Image result for photos of congressional representatives celebrating 2017 tax cuts

We all heard the republican President Donald Trump and the GOP lawmakers lie to the American peoples around December 2017, as to how they justified paying for their huge tax cuts by adding to the deficit $1.5 trillion dollars over 10 years, with the argument that the tax cuts would result in an increase in tax revenues which would bring down the deficit.

Let’s not forget their promises on how the average Joe worker would start to see an increase in wages. This hasn’t happened because the president’s tariffs along with other policies have caused an increase in inflation.

Lately, we have heard the republican US Senate Majority Leader Mitch McConnell complain about the 17% rise in the US deficit since 2017 is due to spending on entitlement programs, including social security and Medicare. He has stripped away the veneer on any GOP commitments not to touch entitlement programs. But if he thinks that there will be partisan support after the GOP just gave that 2017 huge tax cut to their wealthy friends and donors, he’ll soon learn he’s operating ‘solo mio’.

Image result for photos of congressional representatives celebrating 2017 tax cuts
MCCONNELL

Here’s the rest of the story…

On October 16, 2018, John Harwood of CNBC penned the following report, “The numbers are in, and Trump’s tax cut didn’t reduce the deficit – despite his many promises” 

Excerpts:

  • “On the campaign trail, Trump first proposed a $10 trillion tax cut, far larger than any Republican rival’s, but insisted it wouldn’t boost the federal budget deficit because the economy would “take off like a rocket ship.”
  • “Though Trump sharply pared back this proposal, he continued to maintain the deficit wouldn’t rise.”
  • “That claim was politically important for congressional Republicans who used it to convince holdout lawmakers to vote yes.”
  • “But even as growth has accelerated, the Treasury reported that the 2018 deficit swelled to $779 billion. That level, the highest in six years, marks a 17 percent increase over 2017.” 

    “Presidents often make extravagant claims for their policies. But rarely are they proven so false so fast as Donald Trump‘s claims about tax cuts and deficits.”

    “Those claims date back to Trump’s 2016 presidential campaign. He first proposed a $10 trillion tax cut far larger than any Republican rival’s, but insisted it wouldn’t boost the federal budget deficit even temporarily because the economy would “take off like a rocket ship.”

    “His own advisors knew that was impossible, so Trump sharply pared back this proposal. But he continued to maintain the deficit wouldn’t rise.”

    “That claim was politically important for congressional Republicans. They relentlessly attacked President Barack Obama for increasing deficits and debt.”

    “Not only will this tax plan pay for itself, but it will pay down debt,” Treasury Secretary Steven Mnuchin asserted as Congress debated the Trump tax cut. Mnuchin named two factors — increased economic growth and reduced corporate tax avoidance — that would offset revenue losses from lower rates.”

“The years when we increased deficits are years when the economy is slowing down,” said Gary Cohn, then director of the National Economic Council. He explained lower rates would lead corporations to shift taxable operations back to the U.S. from abroad.”

Image result for photos of congressional representatives celebrating 2017 tax cuts

“House and Senate leaders used those arguments to reassure Republican holdouts. “We’re right there in the sweet spot with economic growth that gives us more revenue,” Speaker Paul Ryan declared.”

“We fully anticipate,” said Senate Majority Leader Mitch McConnell, “this tax proposal in the end to be revenue neutral for the government if not a revenue generator.”

“A few skeptics worried anyway. Calling debt “the greatest threat to our nation,” Sen. Bob Corker of Tennessee vowed to oppose it “if it looks like to me … that we are adding one penny to the deficit.”

“He had good reason for skepticism. Deficits rose after tax cuts under Republican Presidents Ronald Reagan and George W. Bush. Independent economic forecasters, liberal and conservative alike, projected the pattern would repeat.”

Image result for photos of congressional representatives celebrating 2017 tax cuts
GOP WONDER WHY TAX CUTS AREN’T POPULAR WITH VOTERS

“Ultimately Corker joined fellow Republicans in finding reasons to go along.”

Some considered tax cuts their highest priority. Others privately welcomed deficits as a prod to shrinking government. Still others resolved their ambivalence by siding with their party.

“There are about as many economists as there are opinions,” said Rep. Tom Cole of Oklahoma. “In the end I’m going to trust the people who are philosophically aligned with me.”

In June, six months after the tax cut passed, Cohn’s successor, Larry Kudlow, claimed the deficit “is coming down rapidly” due to economic growth. Now, the government Trump oversees has demonstrated the opposite.

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“Even as growth has accelerated, the Treasury reported that the 2018 deficit swelled to $779 billion. That level, the highest in six years, marks a 17 percent increase over 2017.”

“Federal spending as a share of the economy fell. But revenue fell even more, with corporate tax receipts plummeting 31 percent. The Congressional Budget Office forecasts deficits hitting $981 billion in 2019 and exceeding $1 trillion every year after that.”

Image result for photos of congressional representatives celebrating 2017 tax cuts

Fast turnaround

As predictable as that was, it represents a lightning-fast falsification of a major commitment.

The Trump administration has long since abandoned its pledge that wealthy Americans wouldn’t receive tax cuts; they actually received the largest cuts. Testing other promises requires more time.

“As early as 2021, White House economist Kevin Hassett says, effects of the tax cut will bring average families a $4,000-a-year raise. So far, worker pay increases have been largely gobbled up by inflation.”

“More significantly, Trump promised tax cuts and the rest of his economic program would boost annual economic growth to 4 percent or higher. More cautious advisors pared back that claim and said Trump will create sustained growth of 3 percent or more.”

“Either benchmark would be a major boost from long-term forecasts of 2 percent growth before Trump took office. After the government reported second-quarter 2018 growth of 4.2 percent, the White House and Republican allies hailed evidence of a promise kept.”

Not so fast. Economic forecasters project third-quarter growth falling below 4 percent — and slowing further after that.

“Mark Zandi, chief economist of Moody’s Analytics, envisions growth ending up at 2.9 percent for 2018, 2.8 percent for 2019, and just .9 percent for 2020. Over the long run, major forecasters still see the economy on a path of 2 percent growth.”

13 comments

    • Dear Mary Plumbago,

      It is a safe bet that every one of those GOP lawmakers who voted for this 2017 tax cuts bill for the rich, benefited bigly for this vote which was paid in part by adding $1.5 trillion dollars to the US deficit over 10 years.

      Hugs, Gronda

      Liked by 1 person

  1. Gronda, the CBO projected it will increase the debt by $1.5 trillion over the next ten years. The spending bill will add $500 billion. This is on top of an expected increase in the debt from by $10 trillion taking it from $21 trillion to $31 trillion. We are now at $22 trillion.

    This is beyond poor stewardship. It is malfeasance. The Tea Party made a huge stink when it was $8 trillion then again when it was $14 trillion. Now, that the GOP is in power it is not an issue. Our country must deal with this issue and environment and climate change.

    I am frustrated as a now 60 year old. If I was in my twenties, I would be absolutely furious at all politicians, but especially the malfeasance of the GOP. This beyond hypocrisy. Keith

    Liked by 4 people

    • Dear Keith,

      You know that these republicans knew that what they were doing was wrong but they didn’t care. They wanted their tax cuts even if trillions were added to US deficit.

      Now the US Senate Majority Leader Mitch McConnell is blaming government spending on entitlement programs like social security, Medicare and Medicaid as the cause for the 17% spike in the US deficit since 2017. We now know how the GOP lawmakers plan to pay down this deficit. Excuse me, but there is no way Americans are going to buy this plan.

      Thanks for adding the information about the rise in the US deficit.

      Hugs, Gronda

      Like

  2. The republicans are now using the debt and deficit to claim we have to cut the social safety programs. McConnell claimed the problem is the 3 “entitlement” programs ( it is not entitlement we payed into them ) Social Security, Medicare, and Medicaid. He denies the tax cut or increase in Military spending have anything to do with it. I am so angry at all of this. Hugs

    Liked by 4 people

    • Scottie, before Trump came along, the two representative problem children of Washington dysfunction were Harry Reid and Mitch McConnell. McConnell will say one thing with fervor when a minority leader and argue the exact opposite point when a majority leader. He does not lie nearly as much as Trump, but I do not feel he shoots straight with people. A great example is the Merrick Garland nomination never even getting an audience and then rushing through a flawed candidate in Brett Kavanaugh before people could fully investigate his warts. Keith

      Liked by 2 people

      • I agree keith. I see both as older people in their 70’s who have nothing left to lose regardless of what they do. They have the huge amount of money they raked in, they have the power their positions have given them, even if they leave they lose nothing. ZI think there should be an age limit to congress. Maybe that will stop some of this abuse. Hugs

        Liked by 1 person

  3. Dear Scottie,

    I used to be against term limits but I’m now at the point, that I could go for this. These old Grumpy Old Perverts are clueless and they don’t care how their actions harm the vast majority of the American peoples.

    To whom much is given, much is expected. These peoples think that they are more deserving than those not as well off.

    Hugs, Gronda

    Like

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