For Immediate ReleaseFriday, September 27, 2019
Time to Eat Your Words, Sec. Mnuchin: Tax Cuts for the Wealthy Didn't Lower Deficit
Two years ago today, Treasury Secretary Steven Mnuchin sold the proposed Trump-GOP tax cuts to lawmakers and the American public by making a bold promise: the tax cuts would reduce the federal deficit by more than $1 trillion.
“We think this tax plan will cut down the deficits by a trillion dollars,” Mnuchin said in an interview on Fox Business. “That’s a large number.”
Instead, that “large number” is about the amount -- $1.067 trillion -- that the federal budget deficit has reached in the first 11 months of the 2019 fiscal year, a 19% increase over this time last year. The current shortfall exceeds the 2018 deficit of $779 billion, which itself was an increase over the 2017 deficit of $665 billion, according to the White House’s Office of Management and Budget (OMB). The budget deficit hasn’t hit $1 trillion since 2012 in the aftermath of the financial crisis.
“Mnuchin’s empty promise shows just how much the 2017 tax cuts for the rich were a scam on the American people,” said Frank Clemente, executive director of Americans for Tax Fairness. “Mnuchin’s prediction was off by $1 trillion. A Treasury secretary who can’t count needs to be held accountable.”
Mnuchin also predicted that the tax cuts would accelerate the rate of economic growth to above 3%. He called it “a moderate aspiration, and we can do higher than that.” But that hasn’t happened either. Annual gross domestic product was under 3% last year after passage of the tax cuts, and the latest third quarter results show GDP growth of 2% and a likely increase of 2.2% for the year.
As the deficit swells because of the tax cuts mostly benefitting the wealthy and corporations, which will cost $1.9 trillion over 10 years, Trump and his allies in Congress are proposing cuts in critical services – Medicare, Medicaid, Social Security, etc. – to cover the cost.
“This was the bait-and-switch plan all along,” Clemente said. “Bust the budget with tax handouts to the rich and corporations, and then pay for them by cutting essential services to working families.”
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Americans for Tax Fairness (ATF) is a diverse campaign of more than 425 national, state and local endorsing organizations united in support of a fair tax system that works for all Americans. It has come together based on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. This requires big corporations and the wealthy to pay their fair share in taxes, not to live by their own set of rules.