On Thursday the House Ways & Means committee released the Tax Cuts and Jobs Act (H.R. 1) to simplify the Internal Revenue Code of 1986. The bill was introduced by Congressman Kevin Brady (R-TX), and supported by President Donald Trump, Vice-President Mike Pence, Speaker of the House Paul Ryan (R-WI), and Senate Majority Leader Mitch McConnell (R-KY). Paul Ryan’s press release on the Tax Cuts and Jobs Act can be found here.
Here are a few things the bill would do:
- End the medical expense deduction and other popular tax deductions
- Lower mortgage tax breaks
- Rewrite income tax brackets
- Cut corporate taxes
What about Medicare?
But there’s one more thing the bill could do that would hurt Medicare beneficiaries: it could cut $28 billion from Medicare next year. This is due to a little-known law called “statutory PAYGO.” According to Catherine Rampell of the Washington Post, the law says that “if all the bills passed by the end of the current calendar year have the net effect of increasing deficits, then automatic, immediate, offsetting cuts to certain non-discretionary spending programs –including Medicare—go into effect.” Other non-discretionary programs that could be cut are student loans and farm subsidies.
The Center for Medicare Advocacy and the Medicare Rights Center issued a statement that the legislation “sets the stage for deep cuts to Medicare, Medicaid, and Social Security in the near future.”
On Monday November 6, Republican lawmakers began revising the bill. The House plans to vote on a revised tax bill before Thanksgiving on November 23. The Tax Cuts and Jobs Act was written without any input from Democrats. The last time the tax code went under such changes was with the Tax Reform Act of 1986.