Op-Ed: House Budget + Trump Tax Cuts = Raw Deal for NJ

This op-ed appeared in the August 6, 2017 edition of the Sunday Bergen Record.

After spending the last six months trying to take health coverage away from tens of millions of Americans, President Trump and Speaker Paul Ryan are turning their attention to a lower-profile but equally damaging set of policy changes. The House Republicans’ proposed budget unveiled this month, and the accompanying tax cuts outlined by the President, puts millions of New Jersey families at risk while giving huge breaks to the Garden State’s fortunate few.

Much like it did during the failed efforts to roll back the progress we’ve made on health care, New Jersey’s Congressional delegation has an outsized role to play in stopping this madness. The Republicans who put the people in their districts before political party during the health care fight – Reps. Lance, LoBiondo and Smith – should continue to do so as the battle moves to budget and tax policy. After all, the threat these proposals pose to their constituents’ well-being remains incredibly serious.

Their GOP colleagues who supported Trumpcare – Reps. Frelinghuysen and MacArthur – ought to join them this time, and use their considerable influence in D.C. (Frelinghuysen, in particular, as Appropriations Chairman) to ensure New Jersey gets a fair tax and budget deal, not a raw one.

What’s at stake?

The budget plan could result in devastating cuts to programs that expand economic opportunity for all New Jerseyans, including investments in science, technology, job training and education that are proven to grow the economy, with $1.3 trillion in cuts over a decade in so-called “non-discretionary defense” spending (in other words, any domestic and international spending that isn’t an entitlement program and isn’t the military). Under the House GOP plan, by 2027 this spending would 44 percent lower than it was in 2010, while defense spending would grow by $929 billion between now and then.

But the proposal would fall hardest on Garden State residents struggling in the state’s sluggish economy, with a severe $4.4 trillion cut in entitlement programs over 10 years.

Among the carnage is a $150 billion cut to food assistance through a 20 percent reduction in the Supplemental Nutrition Assistance Program (SNAP). These cruel cuts put the nearly 900,000 New Jerseyans who are helped with affordable groceries through SNAP at risk. In the state’s districts represented by Republicans, approximately 80 percent of families who received SNAP benefits in 2015 had at least one person who worked during that year – and 51 percent had at least one child in the home.

Meanwhile, as Republicans continue their efforts to sabotage health care by repealing of the Affordable Care Act, the proposed budget also puts health care in the crosshairs, with a whopping $2 trillion in cuts to Medicaid and Medicare over a decade.

The Medicaid cuts alone come in at around $1.5 trillion, a deeper cut than anything that’s been considered in the ACA repeal bills. The budget incorporates the Medicaid cuts in the House-passed ACA repeal legislation, and then adds additional cuts on top. It still permanently cuts and caps Medicaid funding to states, completely changing the entitlement nature of the program and shifting significant costs to states. Most states – like New Jersey, with its deep budget crisis – will not be able to make up the lost funding, which will then result in cuts to health care, restrictions on eligibility, or some combination.

These cuts put about 1.8 million New Jerseyans – including 852,000 kids – at risk. About half a million constituents in New Jersey districts represented by Republican members of Congress rely on Medicaid for health care – and nearly half of them are children.

To make matters even worse, these deep and damaging cuts to key investments, services and programs are merely a vehicle to deliver massive tax breaks to the wealthiest Americans.

In New Jersey, the top 1 percent of the state’s taxpayers – with average incomes of $3.1 million a year – would receive an average tax cut of $130,440, which is more than 250 times larger than the average $510 tax cut the bottom 60 percent of New Jersey taxpayers – with average incomes of $77,800 – would receive. In fact, the average tax cut for the wealthiest New Jerseyans is more than double the average annual income of the state’s middle-class families.

Overall, New Jersey’s top 1 percent would receive 55 percent of the tax cut dollars, while the bottom 60 percent would receive just 21 percent. But the small tax savings received by New Jersey low- and middle-income families would likely be more than offset by the cuts in services and supports included in the proposed budget. In the end, most New Jersey working families would be much worse off if this plan were adopted.

New Jersey is just now beginning to regain its footing after a long stretch of slower-than-average economic growth. The state’s middle-class is shrinking, the gap between the very rich and the rest of us is growing, and poverty remains a pressing problem. The House GOP budget would set the Garden State back, and our Representatives ought to oppose it.

 

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