CongressionalRepublicanleadersinsist that the national debt is among our nation’s greatest challenges, and reducing it is among their highest priorities. In fact, they claim that reducing the debt is so urgent it warrantsendangeringthe entire U.S. economy through debt limit brinksmanship.But their legislative agenda to date points in a very different direction—with proposals that would increase the debt by over $3 trillion.
- The firstbillpassed by the new Republican House majority increased the debt by$114 billionby allowing wealthy people and corporations to continue to cheat on their taxes.
- Congressional Republicansproposedrepealing—and are evenrunning adsattacking—reforms President Biden signed to lower prescription drug costs. Repealing these policies would increase the amount of money Medicare pays Big Pharma, raise costs for seniors, and add$159 billionto the debt.
- House Republicans haveadvocatedandproposedrepealing tax increases on large corporations that President Biden has signed into law, adding$296 billionto the debt.
- House Republicanleadershave also committed to extend the expiring Trump tax cuts, a$2.7 trilliondebt increase that would give the top 0.1% (with incomes over $4 million per year) a$175,000annual tax cut, over 2.5 times a typical family’sannual income.
Grover Norquist, President of Americans for Tax Reform, exposed the political logic of Congressional Republicans’ fiscal hypocrisy. HetoldRepublicans their focus should be “not the deficit” after all: it’s to shift public discussion to cutting spending, paving the way for more tax cuts for the wealthy.
That trickle-down economic theory has never worked. President Trump and President Bush’s tax cutsaddedtrillionsto the debt and failed to deliver their promised benefits for the economy or American workers. And taking revenues—and even savings from cutting corporate subsidies—off the table means Congressional Republicans consistently propose deep cuts to programs seniors and middle-class and working families count on.
That’s whythe American people deserve to see Congressional Republicans’ full and detailed budget plan and compare it with the President’s Budget planto invest in America, bring down costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit, which he will release March 9.
Congressional Republicans’ Commitment to Debt Increases
The fiscal consequences of the debt increases Congressional Republicans have put at the top of their agenda are stark.After a decade, these policies, if enacted, would add over $3 trillion to the debt (accounting for debt service costs), increasing debt as a share of the economy by almost 10 percentage points.
Congressional Republicans’ debt increases include:
The Tax Cheats Protection Act:House Republicans’ firstbillin the new Congress would add$114 billionto the Federal debt by repealing President Biden’s legislation that cracks down on wealthy tax cheats. While working people pay99%of taxes on their income from wages and salaries, the top1% hides about 20%of their income from tax, including by funneling it through offshore accounts and tax havens that do not report earnings. President Biden passed a law to make our tax system fairer by cracking down on wealthy tax cheats, while protecting middle-class taxpayers and small businesses and improving taxpayer service. But221 House Republicansvoted to enable tax fraud by wealthy Americans and large corporations.
Increase Spending With a Handout to Big Pharma:House Republicans have introduced abillto repeal the entire Inflation Reduction Act (IRA), including the reforms President Biden signed into law to lower prescription drug costs. Congressional Republicans and Big Pharma have launched aconcertedattackon the IRA’s prescription drug reforms, advocating to increase both Federal spending and seniors’ costs to increase Big Pharma’s profits. Thanks to the new prescription drug law, Medicare will finally be able to negotiate drug prices, and drug companies will pay rebates to Medicare if they try to hike their prices faster than the rate of inflation. Congressional Republicans want to repeal these policies, giving a$159 billionhandout to Big Pharma, raising costs for seniors, and driving up the Federal debt.
Enrich Multi-Billion Dollar Corporations:In 2020,55of the largest, most profitable corporations paid $0 in taxes. The President signed into law legislation to level the playing field for companies and small businesses that are already paying their fair share in taxes. Under his corporate minimum tax, the largest, most profitable corporations—those with over $1 billion in profits—have to pay a 15% minimum tax on the profits they report to their shareholders. But House Republicans—through their Inflation Reduction Act repeal bill and otherstatements—have made clear that they want to enrich large corporations that don’t pay their fair share. That would add$222 billionto the debt.
Increase the Tax Subsidy for Stock Buybacks:President Biden signed into law a surcharge on corporate stock buybacks, which reduces the differential tax treatment between buybacks and dividends and encourages businesses to invest in their growth and productivity as opposed to paying out corporate executives or funneling tax-preferred profits to foreign shareholders.The President in his State of the Union addressproposedquadrupling the stock buybacks tax to 4% to address the continued tax advantage for buybacks and encourage long-term investment over giveaways to executives. House Republicans instead want to repeal the stock buybacks tax and let corporations continue to funnel tax-preferred profits to shareholders instead of investing in productivity and the broader economy. That would add$74 billionto the Federal debt.
Extend President Trump’s Unpaid-for Tax Giveaway to the Wealthy and Large Corporations:President Trump and Congressional Republicans deliberately sunset portions of their tax giveaway to the wealthy and large corporations. They did this to conceal how much their plan added to the debt as well as how large the tax breaks were for multi-millionaires and large corporations. Now, HouseRepublicanLeadershiphas made clear that extending President Trump’s tax giveaway to the wealthy and large corporations is one of their top priorities. An analysis by theTax Policy Centerfound that doing so would mean an average tax cut of $175,000 for the top 0.1%—Americans making more than $4 million per year. That average tax cut is more than 2.5 times a typical family’sannual income. Meanwhile, extending the expiring Trump tax cuts would add$2.7 trillionto the Federal debt over 10 years.
The President supports a fiscally responsible approach to continuing current tax policies for people making less than $400,000 per year, and opposes any tax increase for this group. Meanwhile, Congressional Republicans—including themore than three quartersof them who are signatories to Grover Norquist’s tax pledge—have made clear they will oppose paying for middle-class tax cuts by raising taxes on the wealthy and large corporations.
Even Without a Budget, Congressional Republicans Are Already Showing Who Will Pay the Price
The proposals Congressional Republicans have put forward show that, even as they commit to massive tax cuts for the wealthy and large corporations, they are more than ready to raise taxes on middle-class and working families. The House Republican IRA repeal bill would cut premium tax credits that are helping an estimated 14.5 million people pay for health insurance. And the House Budget Committeelast weekdoubled down on eliminating Affordable Care Act premium tax credits for middle-income people with high health insurance premiums: a tax increase of$7,600per year for a typical 62-year old earning $55,000.
In addition, some Congressional Republicans continue to push a national retail sales taxbillthat would repeal most existing taxes and impose a new 30% sales tax on American families. The legislation would increase debt bytrillions—and cut taxes for a couple making a million dollars a year by more than $200,000—and at the same time would raise taxes by at least $7,000 for a retired couple with $60,000 in Social Security income and at least $6,000 for a single mom making $38,000, a recentanalysisfound.
The bottom line is: having committed to over $3 trillion in debt increases and also insisted they are committed to reducing the debt,Congressional Republicans owe the American public a complete and transparent accounting of who will foot the bill.Will it be middle-class and working families, seniors, students, or all of the above?
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