President Donald Trump’s $6.5 trillion pension bill is expected to cost the government more than $1 trillion over the next decade, according to a new report by the nonpartisan Tax Policy Center.
The Center’s analysis found that the president’s plan would reduce the nation’s total budget deficit by $1.3 trillion over that period, but the tax bill could add another $3 trillion to the deficit by 2027, the center’s calculations found.
The bill also calls for an additional $2 trillion in Medicare spending cuts over the coming decade, the Center found.
President Trump’s plan will increase the national debt, increase taxes on Americans and lead to higher deficits for the country, according the Center’s calculations.
That’s because Trump’s plans would add billions more in debt for the government over the decades ahead, and those costs would likely increase the government’s budget deficit in the decades after 2020, the analysis found.
Trump’s budget plan also calls out $3.9 trillion in tax cuts over 10 years, $1 billion of which are offset by a $2.1 trillion cut to Medicaid.
That could cost the federal government an additional 10% of its annual budget over the decade, as well as $1,821 for every $1 in tax revenue generated, the Tax Policy Institute found.
Republicans have repeatedly claimed that the bill’s $3,500 tax cut is offset by the $3 billion in spending cuts in the plan, but that claim is highly misleading.
Taxpayers would still pay taxes on the savings that would come from cutting Medicaid spending.
In the new analysis, the tax cuts would total $2,764 for every dollar of tax revenue that comes from reducing Medicaid spending, while the $2 billion in cuts would reduce tax revenue by $3 per dollar.
Trump has been clear that his $3 bill would reduce federal spending by $5.5 billion over the long term, which is less than the $6 trillion in additional revenue that would be generated from reducing Medicare spending.
If he wanted to get to $6,000 per person per year, he would need to reduce spending by an additional 4.7% of GDP, the new Tax Policy report said.
But Trump’s campaign promised that he would not cut Medicare spending at all, according a statement released by his transition team.
Trump also said during his campaign that his tax plan would be a “massive cut” in Medicare, but later said he meant a tax cut on millionaires, not wealthy people.
The Trump campaign has since changed its message.