The Unpleasant Impact of an Unserious Budget

Josh Hoxie

Josh Hoxie Project on Taxation and Opportunity, Institute for Policy Studies

If you can get past the fuzzy math, Trump’s budget means certain pain for most families — and big tax cuts for the wealthiest few.

Federal budgets, while boring and wonky, can have a serious impact on our lives. They dictate our collective priorities for how we choose to spend our public resources in support of the common good. That is, good budgets do that. But you’d be hard-pressed to call the most recent budget from the Trump administration good.

 

To be clear, it’s hard to even refer to this budget as serious. Sure, it’s written in official-looking thick blue books, and it outlines spending figures using precise numbers. But that’s about where the formality ends. Tucked into the formal budget is a set of assumptions that present a fantastical approach to simple arithmetic.

Estate Tax Two-Step

Take the estate tax for just one example, also known as the inheritance tax. The estate tax is a pretty straightforward idea: a levy on the inter-generational transfer of immense wealth that only the very wealthy pay. It’s been on the books for about 100 years.

If left untouched, it will generate an estimated $174 billion over the next 10 years, precisely $0 of which will come from anyone who could reasonably be considered middle class.

The Trump budget proposes to eliminate the federal estate tax. Trump’s own family stands to benefit enormously from this gift to the wealthiest households.

The budget also proposes to dramatically cut federal student loan programs by about $143 billion. Notably, the Public Student Loan Forgiveness program is eliminated, a program that hundreds of thousands of graduates signed up for expecting their student loans to be eliminated after 10 years of service in the public sector.

Do the Math?

Trading a massive tax cut for the ultra-wealthy in exchange for massive cuts to programs that help young people go to college is bad enough. But then there’s the math.

The Trump budget, despite proposing to eliminate the estate tax, still counts the estate tax revenue as part of its revenue projection. In fact, the administration expects estate tax revenue to top $300 billion, nearly double the normal projection. This lie is critical to their absurd claim that their budget will balance.

News flash: If you cut taxes, it means you don’t get the revenue from said taxes.

Mathematical Menagerie

The estate tax double-count is just one of the many mystical components of their mathematical menagerie.

A poll of top-tier economists by the University of Chicago (which has among the most conservative econ departments in the country) found practically unanimous agreement that there’s no way the budget will balance. The administration’s assumptions are just too far-fetched — no matter how many times you spin in a circle, squint, and pray that the numbers on the page change.

Unfortunately, while the administration’s struggle with basic arithmetic can be amusing, the potential impact of this budget is far from humorous.

It will mean millions of families pushed off their health coverage, millions of mothers blocked from receiving nutritional assistance for their babies, and millions more families in our northern states forced to choose between heating their house and affording their groceries.

Long-time Rep. Barbara Lee of California put it well: “I have never seen a budget so devoid of compassion and empathy for families struggling to make ends meet,” she observed.

There appears to be no law barring Congress from enacting a budget with fundamentally bogus assumptions, and many of Trump’s supporters on Capitol Hill are happy to play ball. One hopes their constituents will be much less willing to go along with the morally bankrupt mathematical mess this administration calls a budget.

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Reposted from Our Future.

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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