Washington Watch: Disaster averted

President Donald Trump is already talking about a new round of tax cuts. And guess who will benefit?

By DOUGLAS BLOOMFIELD
U.S. President Donald Trump waves to supporters at a campaign rally on the eve of the U.S. mid-term elections at the Show Me Center in Cape Girardeau, Missouri, U.S., November 5, 2018. (photo credit: CARLOS BARRIA / REUTERS)
U.S. President Donald Trump waves to supporters at a campaign rally on the eve of the U.S. mid-term elections at the Show Me Center in Cape Girardeau, Missouri, U.S., November 5, 2018.
(photo credit: CARLOS BARRIA / REUTERS)
Paul Ryan said one of his proudest achievements as speaker of the House was enactment of the 10-year, $1.5 trillion tax cut, and one of his deepest regrets – “our greatest unfinished business” – was his failure to enact what he euphemistically called “entitlement reform.”
I’d call that “disaster averted.” His plan for entitlement reform, a goal shared by Senate Republican Leader Mitch McConnell for the next Congress, was for massive cuts in Social Security, Medicare, Medicaid, food stamps and other welfare programs. They wanted to eviscerate the nation’s social safety net to pay for slashing the taxes of wealthy GOP donors and corporations. President Donald Trump is already talking about a new round of tax cuts. And guess who will benefit?
While Republicans persistently try to repeal the Affordable Care Act (ACA) and fail to come up with a viable alternative, many Democrats, and even some Republicans, are talking about enacting “Medicare for all” while the White House and GOP leadership are pushing what should be called Medicare for fewer.
Protecting Obamacare from Trump’s attempts to repeal it helped Democrats win 40 seats in the midterm elections, and health care is likely to be a major issue in next year’s presidential campaign. Trump turned away swing voters last year with his vow to destroy the ACA. It turns out that after he got into office and started ripping it apart, and showing his real intent was repeal and not replace, consumers began to realize that they liked what they had and wanted to keep it. Next year look for Democrats to talk about a government-run, single-payer system of national health insurance patterned after the public-private Medicare partnership; opponents will brand it “socialized medicine.”
If Republicans are serious about cutting health care costs, they can begin by removing the ban on Medicare directly negotiated drug prices with industry. But don’t hold your breath. The GOP is too beholden to Big Pharma. As with so many regulators in the Trump administration, the fox was put in charge of the hen house. Trump’s Health and Human Services secretary, Alex Azar, came to Washington from giant drug maker Eli Lilly, where he was president of the US division.
Conservatives like to talk about privatizing Social Security; instead of putting their payroll taxes into the Social Security Trust Fund, individuals would be able to invest part or all of it as they see fit. That was president George W. Bush’s top agenda item for his second term. Enough Republicans joined Democrats in stopping that. Had he succeeded, millions of Americans’ savings would have been wiped out by the time Bush left office thanks to the Great Recession of 2008.
When the stock market was rising earlier this year, Trump was boasting how he’d helped save everyone’s 401(k) retirement plans, but he’s been silent (on that, at least) since Wall Street’s deep dive into the Trump Slump that wiped all gains for the year for millions of Americans.
Republicans have been trying and failing to repeal Social Security since it was enacted under FDR in 1935. Candidate Trump promised “there will be no cuts to Social Security, Medicare & Medicaid,” but we’ve all learned the hard way about his veracity.
His top economic adviser, Larry Kudlow, said “spending for welfare programs and social spending” is “not a growth prescription. It’s just spending.” What he avoided saying is that those programs don’t bring in big corporate donations.
Trump’s budget this year called for but didn’t get major reductions in Social Security, Medicare, Medicaid and other social safety net programs.
The Republican approach to entitlement reform could have a huge impact on an aging Jewish community and the myriad community services that help those in need in our community. The answer is not cutting and restricting benefits.
Trump’s assault on health care and the social safety net helped win Democratic votes in November, and he isn’t done.
Not content to take away the paychecks of hundreds of thousands of federal workers during the Christmas holidays by shutting down a quarter of the government to force Democrats into funding his Mexican border wall, he added another lump of coal for the rest of the government’s civilian workforce. He killed a scheduled 2.1% across-the-board cost of living pay increase for more than two million federal workers.
The government can’t afford a pay raise for its employees, said the president who has already spent more taxpayer dollars to jet off to play golf at one of his resorts than most of those federal workers earn in a lifetime.
Trump may be counting on his base in the hinterlands hating government so much that they also loathe the people who work for it –the deep state he rails against – and that they’ll be happy he dissed them, but his decision may succeed more in recruiting Democratic voters.
Trump’s base may not like the government but they love their Social Security checks. Privatizing will put their retirement plans in Wall Street’s hands. And pockets.
If Republicans truly want to make Social Security solvent for coming generations, they can start by having everyone pay their fair share. Today’s payroll tax puts the heaviest burden on low- and middle-income earners.
According to the IRS, the employee tax rate for social security is 6.2% of earned income up to $118,500. Those who earn the maximum, pay $7,347 in withholding for Social Security; those in the upper tax brackets like Trump, his family and most of his cabinet and make $10 million, they’d still pay only $7,347, way below their fair share of $620,000.
That’s one more way the rich get richer.
Voters’ decision to shift power in the House of Representatives will be critical to blocking efforts to roll back Social Security, Medicare and Medicaid to pay for cutting taxes for the top one percent.
Disaster averted. For now.