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"This hostage crisis has never been about deficits for the GOP," said Rep. Ilhan Omar. "It has always been about wealth transfer—taking away food and healthcare from the poor and middle class to give away $3 trillion more in tax cuts to their rich friends."
With the U.S. careening toward a default crisis that they manufactured, House Republicans are reportedly crafting a major tax cut package that would overwhelmingly benefit the rich and corporations while blowing a multitrillion-dollar hole in the federal deficit.
The fresh push for tax cuts, according to Rep. Ilhan Omar (D-Minn.), further shows that "this hostage crisis has never been about deficits for the GOP."
"It has always been about wealth transfer—taking away food and healthcare from the poor and middle class to give away $3 trillion more in tax cuts to their rich friends," Omar, the deputy chair of the Congressional Progressive Caucus, tweeted Tuesday.
Politicoreported earlier this week that Republicans on the House Ways and Means Committee hope to finish work on their emerging tax legislation by June 16, just over two weeks after the so-called "X-date"—the day on which the Treasury Department expects the federal government to run out of money to cover its obligations unless Congress raises the debt limit or President Joe Biden acts unilaterally.
"Key parts of the [tax cut] package... will likely include a full restoration of research and development deductions, full bonus depreciation, removing caps on business interest expensing, and a doubling of the $1.08 million limitation on the section 179 deduction (which, like bonus depreciation, allows a company to deduct an asset's cost up-front)," Politico noted.
The outlet added that Rep. Vern Buchanan's (R-Fla.) legislation aimed at making the 2017 Trump-GOP tax cuts for individuals and some businesses permanent "also has a strong likelihood of getting marked up in a broader package." The bill, known as the TCJA Permanency Act, currently has nearly 100 Republican co-sponsors in the House.
Buchanan, one of the wealthiest members of Congress, personally benefited from the 2017 tax law that he's working to extend.
"Republicans are holding our economy hostage because they want to cut programs for working families," Sen. Tina Smith (D-Minn.) said Tuesday. "Their next big move? Massive tax cuts for their rich corporate buddies. They may call it fiscal responsibility—I call it extortion."
The Congressional Budget Office (CBO) estimated last week that extending the individual provisions of the 2017 tax cuts—which are currently set to expire in 2025—would add $2.5 trillion to the deficit over the next decade. The original law made the cut to the corporate tax rate from 35% to 21% permanent.
"The hypocrisy of Republicans in Washington is truly breathtaking," Sen. Bernie Sanders (I-Vt.) wrote in a Fox News op-ed on Wednesday. "Over and over again, we hear from the Republican leadership about how deeply concerned they are about the large deficit and national debt that we have. Really?"
"If that's the case," Sanders asked, "why are they pushing for an extension of the Trump tax breaks that disproportionately benefit the wealthy and large corporations and would increase the federal deficit by $3.5 trillion?"
The Institute on Taxation and Economic Policy (ITEP) estimated earlier this month that just 1% of the benefits of the TCJA Permanency Act would go to the poorest fifth of Americans.
The richest fifth, by contrast, would receive nearly two-thirds of the tax benefits, ITEP found.
"The average tax cut for the richest 1%," the organization noted, "would be 25 times that of the middle 20% and more than 250 times that of the bottom 20% of Americans."
\u201cNEW: The push by Congressional Republicans to make the tax provisions in TCJA permanent would cost nearly $300 billion in the first year and deliver the bulk of the tax benefits to the wealthiest Americans. https://t.co/6QgZbXjIfH\u201d— ITEP (@ITEP) 1683211388
Republicans are preparing to launch their push for new tax cuts as they continue to hold the U.S. and global economies hostage in pursuit of steep federal spending reductions, all under the guise of lowering the deficit.
"We're not going to raise taxes," House Speaker Kevin McCarthy (R-Calif.) said earlier this week. "It's a spending problem."
But research published in March by the Center for American Progress (CAP) found that the GOP austerity crusade "does not address the true cause of rising debt"—tax cuts.
"Tax cuts initially enacted during Republican trifectas in the past 25 years slashed taxes disproportionately for the wealthy and profitable corporations, severely reducing federal revenues," noted Bobby Kogan, CAP's senior director of federal budget policy. "In fact, relative to earlier projections, spending is down, not up. But revenues are down significantly more."
"If not for the Bush tax cuts and their extensions—as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining," Kogan observed. "Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57% of the increase in the debt ratio since 2001."
One economist noted that the measure is backed by the "same members who are pushing us to a debt limit crisis on claims they care about the deficit."
Led by Reps. Vern Buchanan (R-Fla.) and Michael McCaul (R-Texas), the TCJA Permanency Act, would cement into federal law tax cuts for individuals that are set to expire at the end of 2025.
The original 2017 tax law, the Tax Cuts and Jobs Act, made most of its corporate tax provisions permanent. In a statement Wednesday, the Biden White House said Trump and congressional Republicans "deliberately sunset portions of their tax giveaway" in order to "conceal how much their plan added to the debt."
According to a Congressional Budget Office (CBO) analysis released last year, extending the individual provisions of the Trump-GOP tax law would cost around $2.2 trillion through 2032. A separate Tax Policy Center analysis estimated that the extension would deliver an average tax cut of $175,710 to the richest 0.1%.
"It's no surprise that the House majority wants to spend trillions of dollars to extend the Trump tax cuts for the wealthiest Americans and biggest corporations—but it's absolute hypocrisy from the same members who are pushing us to a debt limit crisis on claims they care about the deficit," said Lindsay Owens, executive director of the Groundwork Collaborative.
"Congress should be working together to invest in worker and family priorities and increase taxes on the rich—not give them another handout," Owens added.
"Republicans will cut taxes for the mega-rich and well-connected while holding our economy hostage to force punishing cuts to programs American families rely on."
The House Republicans unveiled their legislation as they're continuing to obstruct efforts to raise the nation's borrowing limit in a bid to secure deep cuts to food aid, healthcare, and other critical social programs, claiming such spending reductions are necessary to address the rising national debt.
"The national debt is over $31 trillion," McCaul tweeted last month. "We can't afford to hand that down to our children."
In a recent opinion column, Buchanan called the national debt a "ticking time bomb," not mentioning that his party's push to extend tax cuts for the rich would contribute to the total.
"The same Republicans who claim we can't 'afford' to invest in affordable housing, better healthcare, and accessible child care aren't blinking an eye at the fact their push to extend the Trump tax giveaways for the ultra-wealthy would add trillions of dollars to the federal deficit," Rep. Brendan Boyle (D-Pa.), the top Democrat on the House Budget Committee, toldMSNBC on Wednesday.
"Republicans will cut taxes for the mega-rich and well-connected while holding our economy hostage to force punishing cuts to programs American families rely on—that should tell you everything you need to know about Republicans' priorities," Boyle added.