January 18, 2018, 11:36 pm
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1 Philippine Peso = 393.89636 Sao Tome Dobra
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Deficit worries complicate path for Republican tax cuts

WASHINGTON- Unease among Republicans about a massive increase in the federal deficit could complicate passage of two tax-cut bills working their way through the US Congress, endangering President Donald Trump’s top legislative priority.

The Committee for a Responsible Federal Budget, a nonpartisan budget watchdog in Washington, on Friday called a Senate Republican tax plan a “fatally flawed budget buster,” likening it to Republican legislation in the House of Representatives that the House tax committee has approved.

Both measures would add $1.5 trillion over 10 years to the annual budget deficit and the $20 trillion national debt, according to congressional tax analysts.

The watchdog group estimated that $900 billion of the projected $1.5 trillion deficit increase would come from business tax cuts. The remainder would come from individual tax cuts, including a cut in the estate tax on inheritance that would help only the richest Americans, it said.

Republicans hold a tenuous 52-48 majority in the Senate. For that reason, if they lose the support of only three senators from their ranks, they cannot pass a tax bill as long as Democrats stay united in their opposition.

Nearly 10 months into his presidency, with his party in control of the House and the Senate, Trump is still without a major legislative victory. Failing to get a tax bill through the Senate could cost Republicans in November 2018’s midterm elections.

The Tax Foundation, another nonpartisan group, said the Senate plan would add $1.78 trillion to the deficit over a decade. It estimated that over the same time frame lower taxes would expand the US economy by 3.7 percent, add 925,000 full-time jobs, raise wages by 2.9 percent and generate enough new tax revenue to erase all but $516 billion of the deficit effect.

For decades, Republicans positioned themselves as deficit hawks, refusing to raise the debt limit, opposing Democratic spending programs and warning of crushing federal debts being passed on to future generations of Americans.

The tax plans now being debated represent a stark reversal, with congressional Republican leadership and tax law writers urging passage of deficit-expanding tax changes. Only a handful of Republican senators already have publicly voiced misgivings.

After the Senate plan was released on Thursday, Republican Senator Jeff Flake said in a statement, “I remain concerned over how the current tax reform proposals will grow the already staggering national debt by opting for short-term fixes, while ignoring long-term problems for taxpayers and the economy.”

Senator James Lankford said in a statement, “As we work on tax relief, we must also not lose sight of our responsibilities to protect the nation, provide basic government services and confront our federal debt.” - Reuters
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