House GOP banking chairman waves off tax cut deficit concerns, pivots to entitlement reform

On Thursday, the congressional tax scorekeepers at the Joint Committee on Taxation projected that the Senate Republican tax plan would add $1 trillion to the federal deficit, using "dynamic scoring" that accounts for economic growth. "This is the standard by which the GOP has insisted that fiscal legislation should be judged" for 40 years now, notes New York Times business reporter Binyamin Appelbaum‏. It wasn't the result deficit-wary Republicans wanted, and it led to an overnight rewrite of the tax plan — that plus a parliamentary disqualification of a proposed "trigger" to raise taxes if the $1.63 trillion in tax cuts don't pay for themselves.

Earlier Thursday, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) dismissed the "trigger" idea. "The bottom line is, we'll be able to fill any deficit hole with additional revenues, and we basically saw the same during the Reagan tax cuts, frankly the Kennedy tax cut, you can even go all the way back to the Coolidge tax cut," he told Bloomberg's Kevin Cirilli. "We will be able to raise more revenues, and if not, as a Republican, the answer would be less spending, not more taxes."

The national debt is "the greatest crisis that receives almost no attention in Washington," Hensarling added, elaborating on the spending cuts. "What we need to do is, obviously, reform current entitlement programs for future generations. That's a heavy political lift, but so far we haven't found any help from Democrats."

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On Wednesday, Sen. Marco Rubio (R-Fla.) had similarly suggested cutting future Medicare and Social Security benefits as the next step after passing tax cuts. Calvin Coolidge's tax cuts in 1926, it should be noted, "would substantially contribute to the causes of the Great Depression," the precursor to entitlements, Great Depression historian Robert McElvaine wrote in The Washington Post on Thursday. "Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed." You can read more at the Post.