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Top Republicans are brainstorming ideas to cover the cost of a massive tax cut and immigration crackdown bill. They can create a 10 percent tariff on all imports, amounting to $1.9 trillion. They could impose new work requirements for Medicaid recipients, bringing in $100 billion.
They’ve even calculated that they could generate $20 billion in tax increases for people who can use free gyms at the office, according to a 50-page list of options that the Appropriations Committee has released. at home lately.
The bigger challenge for Republican leaders is trying to figure out what can pass Congress and be signed by President Trump. With slim majorities in both chambers, they are searching for the right mix of policy changes that could offset some of the costs of Mr. Trump’s most expensive, appeasement proposals. austerity spending that is concerned with raising the government debt, and keeping the government debt down. support from more centrist members who hate to cut popular programs.
House Republicans gathered at the Capitol on Wednesday to discuss the options on the table.
Making their job more difficult is a political challenge: Many Republicans are cutting programs aimed at helping low-income Americans, all while offsetting tax increases that benefit the wealthy.
The ultimate goal is to push a behemoth bill that cuts taxes and clamps down on immigration through a process called reconciliation, which allows Republican leaders to bypass the filibuster and move legislation through the Senate. -senator with a simple majority, although all Democrats are against. .
Many anti-spending members of the GOP said they could not support a bill that would add significantly to the nation’s debt. But many of the major policies Mr. Trump wants to include in the law are costly. The tax extension he signed into law in 2017 alone is estimated to cost $5 trillion.
That left Republicans scrambling to find ways to offset those costs. The budget panel’s menu includes everything from the big swings of current politics to the low-hanging fruit. Among other things, there are proposals to eliminate major health assistance programs established by the Affordable Care Act, put caps on Medicaid funding, and end policies that provide food and housing. tax-free employer-provided housing.
Here’s a look at what Republicans think.
It’s a long-standing conservative goal, like eliminating Medicaid
Republicans have long sought to cut Medicare and Medicaid, government programs for the elderly and the poor, and the budget panel has outlined several options for doing so, including cuts federal Medicaid payment rates and establishing work requirements for program recipients.
One option raised by the committee would be to try to scale back the Affordable Care Act’s Medicaid expansion, which has led to a surge in enrollment in the program. This could reduce the portion of Medicaid costs paid by the federal government, increasing the burden on states.
Another on the list would impose work requirements for Medicaid recipients of able-bodied adults without dependents, with exemptions for pregnant women, students and the primary caregivers of those dependents. The job requirements will cause 600,000 people to lose coverage, according to estimates from the Congressional Budget Office, reducing federal spending by at least $100 billion over the next decade.
House Budget Committee aides have estimated that they could restore up to $800 billion with clean energy efforts, including eliminating tax credits created in the The Inflation Reduction Act, Mr. Biden’s landmark bill is designed to lower health care costs, reduce greenhouse gas emissions and raise. corporate tax. The rollback also includes violations of climate rules, put in place by the Biden administration, which are intended to ensure that most new passenger cars and light trucks sold in the United States are electric or hybrid by 2032.
But repealing large parts of the Affordable Care Act could prove politically dangerous. Some hard-line lawmakers have argued that Republicans should repeal the law entirely, while others — particularly those with clean-cut businesses in their districts or states — have pleaded with congressional leaders to leave some of the conditions to stay. Eighteen Republicans last year wrote to President Mike Johnson warning that “complete repeal would create a worst-case scenario that would cost billions of dollars and get no results.”
The aides who prepared the Budget Committee’s menu of cuts appear to have factored that into their calculations.
“Based on political will, a smaller restructuring option is available (starting at $3 billion) that would eliminate a small portion of these debts,” their document said. Of course, these options also offer less savings, and may not appease foodies spending the stone they need to push through all the packaging.
There are dozens of trims that could raise the price for Americans
Republicans are also considering a number of proposals that may be a small change in the country’s fiscal balance but may impose new costs on Americans. These include new taxes on free office cafeterias, as well as employer-provided meals and lodging.
The budget document also proposed an income tax on scholarships and fellowships, which are currently tax-free, which would generate an additional $54 billion in revenue. federal debt.
Useful but politically difficult options like stopping foreclosures
House Republicans’ list includes options that could generate billions of dollars in savings. But those could face almost insurmountable opposition from lobbyists and some lawmakers in their ranks.
The proposal includes ending the tax deduction for interest on real estate, one of the most valuable sections of the tax code. While Republicans limited the deduction in the 2017 tax law, ending it entirely could save an additional $1 trillion over 10 years, according to budget documents. Housing officials and legislators from rural districts with many homeowners may reject the measure.
Tariffs on US imports, a step Mr Trump has often encouraged, could also be lucrative. The document lists a 10 percent tariff on all goods as one option that would cost nearly $2 trillion, though many Republicans have said they don’t believe the tariff should pass into law. Mr. Trump.
The proposed tax on imports and exports, known as the border adjustment plan, could raise $1.2 trillion, according to documents from House Republicans. Many economists like the idea of taxing products based on where they’re sold, not where they’re manufactured, but previous Republican efforts to pass a location-based plan failed last year. 2017 after the company pushed it.
The House Republican menu includes several other tax increases, including denying businesses the ability to deduct state and local taxes. Business groups are already organizing against these expectations.
There are even more tax deductions, such as tips and overtime
In addition to extending the latest round of cuts, Republicans are interested in further lowering taxes. Mr. Trump campaigned on making various types of income, including tips and overtime, tax-free.
The House Republican document offers insight into how Congress might approach Mr. Trump’s ideas. Their advice on tax evasion, for example, will avoid income tax advice. This means that income is still subject to the payroll tax that funds Social Security and Medicare.
Framing the proposal in this way means that low-wage workers will be cut even more. It would also protect their ability to claim full pensions and health benefits and reduce the overall tax bill, which the budget document said would cost $106 billion.
At the same time, not paying taxes on extra wages could cost $750 billion over ten years, according to the budget panel.
The House Republican group, along with Mr. Trump, is expected to raise the $10,000 limit on state and local tax deductions as part of the bill. Raising the limits to $30,000 for couples and $15,000 for individuals would cost $500 billion, the document estimates, and some lawmakers want to raise the limits even further.
Mr Trump has hinted at lowering the corporate tax rate after lowering it to 21 per cent in 2017, and documents show House Republicans are considering lowering it to 15 per cent. percent.
