Jonathan Ernst/Reuters
President Donald Trump and Rep. Kevin Brady
- When Republican lawmakers passed $1.5 trillion tax cuts in 2017, they promised they would pay for themselves.
- But a year and a half later, a key GOP congressman who helped craft the sweeping legislation has walked back that claim.
- The remarks were a departure from a central assertion Republican lawmakers have made since the early days of the legislation: that the tax cuts would lift the economy enough that revenue from growth would make up for the loss in tax receipts.
When Republican lawmakers passed $1.5 trillion tax cuts in 2017, they promised they would pay for themselves. But a year and a half later, a key GOP congressman who helped craft the sweeping legislation has walked back that claim.
"We will know in year 8, 9, or 10 what revenues it brought in to the government over time," Rep. Kevin Brady of Texas said at the Peterson Foundation's fiscal summit in Washington on Tuesday. "So it's way too early to tell."
The remarks were a departure from a central assertion Republican lawmakers have made since the early days of the legislation: that the tax cuts would lift the economy enough that revenue from growth would make up for the loss in tax receipts.
Since the Tax Cuts and Jobs Act was enacted last year, government revenue has fallen at the same time that spending has increased. The federal deficit increased about 38% in the first seven months of the fiscal year, according to the Congressional Budget Office.
The CBO estimates that tax cuts and interest on that debt will cost $1.9 trillion over the next decade. Meanwhile, the rate of growth Republicans had projected remains elusive.
"Although growth rates cannot indicate the tax cut's effects on GDP, they tend to rule out very large effects particularly in the short run," the nonpartisan Congressional Research Office said in a report. "This potential outcome may raise questions about how much longer-run growth will result from the tax revision."