Cutting supports to those in need — just to help the rich

So, you think that was a big battle last week over avoiding a federal shutdown?

You haven’t seen anything. The big tests are yet to come.

We need to connect the dots between costly tax cuts for the wealthy and the health and nutrition safety net for Americans who need help. The focus ahead is on the 2017 tax cuts passed in the first Trump administration and scheduled to expire at the end of this year. The president and his backers in Congress want to extend and expand the tax cuts — $4.5 trillion from 2025-2034[2].

Largely because of these tax cuts we now see serious threats to health care, to food assistance, to education.

— First, the tax cuts are driving deficits and debt. Again, you think those issues are big now? They’ll be bigger if the cuts are extended or made permanent.

— Second, they overwhelmingly benefit the wealthy. What middle-income Americans will see is a pittance compared to what the wealthy will receive.

— Third, the tax cuts will force the cuts in critical services like Medicaid and SNAP that we’re hearing about. Because the tax cuts create deficits, Congress has to find a way to “pay” for them.  And that comes at the expense of those critical services.

And what would be the consequence?

— Big share of cuts to the wealthy — $1.1 trillion to the richest 1% of Americans[1] — which equals roughly the amount of proposed Medicaid and SNAP cuts.

— Pushing federal costs, like in SNAP and Medicaid, to states — states that are cutting taxes themselves and won’t have the ability to pick up those costs. If a 10% match for SNAP benefits were in place last year, Iowa would have had to pay almost $53 million, according to the Center on Budget and Policy Priorities. People will suffer.

— Estate tax alone — extending the big break added in 2017 would give a $5.7 million tax cut to the wealthiest 1 in 1,000 estates [3] — about 170 times the annual income of a family of four at the poverty line ($32,150).

Consider the dots being connected by Sharon Parrott, president of CBPP:

“Under what set of values does a budget target those who struggle to pay their bills for severe cuts, while giving an annual tax cut averaging $62,000 for those who make $743,000 or more a year? The tax cut for these wealthy households is greater than the annual family incomes for most of the 72 million people — 1 in 5 people in the U.S. — who have health coverage through Medicaid.”[4] 

That's the federal question that U.S. House and Senate members must consider — but Iowans should expect their congressional delegation to take it a step further. For one thing, both senators and all four House members previously served in the Iowa Legislature. They should know this will put officials in their state in an impossible position. There will be no way Iowa could continue its current obligations to residents AND take on longtime federal supports as well.

As the state's economic forecasters noted last week, state revenues are declining.[5] Iowa state legislators and the Governor should be pushing their federal counterparts to make sure the U.S. government maintains its responsibilities and not sacrifice critical economic supports to keep and expand big tax cuts for the wealthy, and put all of us in greater debt. It is unsustainable.

Instead, we could target tax cuts only to those who need the help — as we should have done in 2017 — and let the wealthy pick themselves up by their bootstraps.

Ask yourself, where do you, where does your family, where do your neighbors fall when these choices are made? Ask your representatives and senators the same.

Mike Owen is deputy director of Common Good Iowa. Contact: mowen@commongoodiowa.org.