Expected Trump tax cut sparks deficit spike debate

Budget hawks are giving President Trump a break ahead of his planned rollout of a massive corporate tax cut that is expected to add to the federal deficit.

Ahead of Trump’s proposal to cut the corporate tax rate to 15 percent from 35 percent, Finance Committee Chairman U.S. Sen. Orrin Hatch said he is “not convinced cutting taxes is necessarily going to blow a hole in the deficit.”

“I actually believe it could stimulate the economy and get the economy moving,” the Utah Republican said yesterday. “Now, whether 15 percent is the right figure or not, that’s a matter to be determined.”

Congress’ official budgetary scorekeeper said slashing corporate taxes — even temporarily — would add to long-term budget deficits, complicating Republican plans to pass the cuts under a budget maneuver that would allow them to pass a tax bill with a simple majority in the Senate but only if it didn’t add to the deficit.

Republicans’ apparent lack of concern about the deficit prompted Democrats to call them out.

“I’m particularly struck by how some of this seems to be turning on its head Republican economic theory,” said U.S. Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.

Pennsylvania U.S. Sen. Bob Casey, agreed, saying: “On a lot of fronts, both the administration and Republicans have been contradictory, to say the least.”

A less ambitious corporate proposal from House Speaker Paul Ryan to cut corporate taxes to 20 percent for three years would cost $500 billion in the first decade and add to the long-term deficit if not offset by cuts, according to the nonpartisan Joint Committee on Taxation.