WASHINGTON (AP) — Celebrations aside, President Donald Trump may wait until next year to sign the tax bill into law, delaying $120 billion in automatic cuts to popular programs such as Medicare and sparing Republicans from having to explain them in an election year.
Here’s why: If Trump signs the tax bill this month, it could trigger steep automatic spending cuts early next year to a raft of programs. But if Trump waits until January to sign the bill, the spending cuts would be delayed until 2019 — after next year’s congressional elections — giving lawmakers a full year to prevent them.
Congress gave final approval to the $1.5 trillion tax package Wednesday, sending it to Trump.
The bill-signing delay wouldn’t affect taxpayers. The tax cuts would still go into effect in January, and workers would still start to see changes in the amount of taxes withheld from their paychecks in February.
Most Read Business Stories
- Delays in 737 MAX certification flight may push off Boeing's goal to win approval by midsummer
- Alaska Airlines to buy 200 new jets over a decade - 737 MAXs and maybe Airbus A321s
- As fashion trends shift, Brooks Sports sues Brooks Brothers
- Tesla repeatedly veered toward spot where engineer later crashed and died, investigators say
- What slows my PC to a crawl each day at a certain time?
The delay, however, is another example of how politicians from both major parties routinely flout a law that was meant to instill fiscal discipline on Washington. The arcane budget law is called Paygo, or pay-as-you-go.
Years ago, Congress approved the law imposing steep automatic spending cuts whenever Congress passes legislation that adds to the nation’s growing debt. But the automatic spending cuts, which have been around since Ronald Reagan was president, have never been enforced.
Republicans want to add a provision to a year-end spending bill that would waive the Paygo law, but they need help from Democrats to do it.
“So, a crude tool designed to prod Congress to face up to its fiscal responsibilities now goes the way of the dinosaur,” Bill Hoagland, a former Senate Republican aide, wrote in an op-ed in Roll Call.
Despite Republican claims otherwise, the tax bill would add billions to the nation’s debt — more than $1 trillion over the next decade, according to official congressional estimates.
If the Paygo law is waived, Trump can sign the tax bill as soon as it reaches his desk without worrying about the automatic spending cuts.
But if the law isn’t waived, and Trump signs the bill this month, he would be required to issue an order to cut about $120 billion in spending in early 2018, said Hoagland, who is now a senior vice president at the Bipartisan Policy Center.
The Paygo law was meant to be painful: The cuts would target specific programs, including Medicare, price supports for farmers, a fund for crime victims and subsidies for affordable housing, Hoagland said.
If Trump waits until January to sign the tax bill, the automatic spending cuts would be delayed until 2019, giving lawmakers time to waive the Paygo law, said Ed Lorenzen, a former Democratic aide who is now a senior adviser for the Committee for a Responsible Federal Budget.
“That means Congress wouldn’t have to do anything to prevent it from taking effect until the end of next year,” Lorenzen said.
Trump’s top economic adviser, Gary Cohn, said the president would like to sign the tax bill as soon as possible.
“If we can get Paygo waived in the (spending bill), we will sign the tax bill this year,” Cohn said Wednesday at an event sponsored by Axios. “The president would like to sign the tax bill.”
Follow Stephen Ohlemacher on Twitter at http://twitter.com/stephenatap