Van Hollen Presses House Freedom Caucus on PAYGO and Republican Tax Plan
Today U.S. Senator Chris Van Hollen, member of the Senate Budget Committee, wrote to House Freedom Caucus Chairman Mark Meadows about the deficit-busting Republican tax plan. If Congress does not waive Statutory Pay-As-You-Go (PAYGO) after passing a $1.5 trillion tax cut, the resulting sequestration would cut Medicare payments to doctors by roughly $25 billion and eliminate funding for all other non-exempt programs.
The Freedom Caucus has long been committed to deficit reduction - if Congressman Meadows and his colleagues support this tax plan, the American people must know without delay if they plan to set aside their commitment to tacking the deficit or if they plan to use statutory PAYGO to attack programs for middle-class families.
"This is a matter of growing urgency. Congress is advancing this tax bill with great haste. If Congress passes a deficit-financed tax cut this year, there will be little time to waive statutory PAYGO before the session ends and budget scorekeepers assess whether sequestration is required, let alone develop some other deal to reduce spending to finance these tax cuts,"wrote Senator Van Hollen."Of course, Congress would not need to waive Statutory PAYGO if it does not increase the deficit with tax cuts for millionaires, billionaires, and wealthy corporations.
Below is the full text of the letter, or it can be found here.
Dear Rep. Meadows,
As Congress considers major tax legislation, I am writing to raise the issue of Statutory Pay-As-You-Go (PAYGO) and the impacts of a deficit-busting bill. Should Congress pass the $1.5 trillion tax cut enabled by the current budget resolution, it would trigger severe automatic spending cuts. I am writing to ask you the following: As the Chairman of the House Freedom Caucus, do you intend to support a waiver of Statutory PAYGO without any preconditions, in the event that Congress passes tax cuts that increase the deficit?
While I did not always agree with Freedom Caucus positions when I served in the House of Representatives, the Freedom Caucus has been a strong supporter of debt reduction. On May 24, 2017, the Freedom Caucus said in an official statement that, "The U.S. federal government is drowning in debt." And I worked with your former Freedom Caucus colleague Mick Mulvaney on a measure to defend honest budgeting and prevent the Overseas Contingency Operations account from becoming a slush fund that enables unlimited Pentagon spending, even in the face of opposition by some in both of our Caucuses.
Congress passed Statutory PAYGO to discourage legislation that dramatically increases the national debt. Under this law, changes to the deficit from legislation enacted during the year are tallied on a PAYGO scorecard. If the total on the PAYGO scorecard at the end of the year reflects a deficit, the law requires a sequestration of non-exempt mandatory programs to eliminate that deficit.
According to a November 14 letter from CBO Director Keith Hall, if Congress does not waive Statutory PAYGO after passing a $1.5 trillion tax cut, the resulting sequestration would cut Medicare payments to doctors by roughly $25 billion and eliminate funding for all other non-exempt programs. Furthermore, eliminating funding for these programs would not be enough to fully offset the deficit caused by these tax cuts in FY 2018.
This sequestration under Statutory PAYGO would harm Americans across the country. Seniors on Medicare might have fewer choices for health care providers. Farmers would suddenly lose the safety net provided by price support programs that help farms stay in business when prices are low. Rural investment would decline due to a loss of support for agricultural research and business loans in rural areas. Meals on Wheels would no longer receive funding from the Social Services Block Grant. People with disabilities would lose the support provided by vocational rehabilitation grants that help them stay in the workforce. And there would be huge disruptions of travel and trade into the United States due to sequestration cuts within Citizenship and Immigration Services and Customs and Border Protection.
This is a matter of growing urgency. Congress is advancing this tax bill with great haste. If Congress passes a deficit-financed tax cut this year, there will be little time to waive statutory PAYGO before the session ends and budget scorekeepers assess whether sequestration is required, let alone develop some other deal to reduce spending to finance these tax cuts. Of course, Congress would not need to waive Statutory PAYGO if it does not increase the deficit with tax cuts for millionaires, billionaires, and wealthy corporations.
Thank you for your attention to this matter. I look forward to your reply.
Sincerely,
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