The far-reaching domestic policy bill that Republicans recently pushed through the House would provide rich Americans with a financial lift while taking away government benefits from the poor, the nonpartisan Congressional Budget Office said on Thursday.
The analysis is the first from the budget office that lays out how Americans at different income levels would be affected by the Republican legislation, which slashes taxes and cuts spending on safety-net programs like Medicaid and food stamps. Americans would, on average, gain from the bill, according to the analysis, but the consequences would be very different for poor Americans and for rich ones.
The bottom 10 percent, for example, would overall lose government benefits worth an average of $1,559, or 3.9 percent of their current income, each year over the next decade, according to the budget office. The bottom 30 percent of Americans would all, on average, lose more benefits than they would receive from the bill. In contrast, the top 10 percent would gain an average of $12,044, a 2.3 percent annual increase to their current income.
Middle-class Americans would see smaller gains. The middle 10 percent of Americans would on average net $514 per year if the measure were enacted, an annual increase of 0.5 percent in their current income.
Overall, the richer Americans are, the larger the benefit they would receive from the legislation. That is true for the bill overall over the next decade, as well as for each individual year through 2034 as provisions in the bill phase in and out.
While stark, the budget office’s conclusion was not a surprise. Several other independent analysts had already concluded that the legislation would be regressive, meaning that its benefits would be skewed toward Americans with more income.
That is because of the nature of the agenda Republicans have pursued. In general, income tax cuts, the centerpiece of the bill, tend to provide their biggest benefits to the high-earning Americans who pay the most in taxes. The poorest Americans already often do not owe any income taxes, meaning they do not benefit from a tax cut.
At the same time, Republicans have targeted programs that help low-income Americans for cuts. Under the House-passed version of the legislation, nearly 11 million Americans are expected to lose health coverage, for example. The loss in those benefits would overwhelm the modest savings that Americans on the lower rungs of the income ladder would see from tax cuts.
Even with the cuts to safety-net programs, the legislation would still be costly, with the budget office previously estimating that it would add nearly $3 trillion to the debt over the next decade, including additional borrowing costs.
Republicans in the Senate are still working on the legislation, though the changes they are planning are not expected to alter the overall thrust of the legislation, meaning the final product is all but certain to favor rich Americans over poor ones.
Andrew Duehren covers tax policy for The Times from Washington.
The post Rich Gain and Poor Lose in Republican Policy Bill, Budget Office Finds appeared first on New York Times.
