As a member of the broad national community of advocates for economic justice and equity for low and moderate income Americans, the National Association of Social Workers (NASW) is opposed to the Tax Cut and Jobs Act. This bill, as written, would produce a windfall for the “super rich” while decimating safety-net programs that serve low-income elderly, children and families. The tax cut bill was recently passed by the House of Representatives and it is now in the hands of the Senate. The Senate’s version of the tax bill, which retains the massive tax cuts for businesses and the wealthy, is estimated to increase the deficit by about $1.5 trillion over ten years .
Therein lies the problem because – under Congress’s budget rules- all spending bills that increase the deficit must be offset by equal cuts in federal spending. This rule is euphemistically referred to as Paygo. To comply with Paygo, the Senate bill proposes major cuts to programs that are critical to low-income Americans. These proposed cuts are both unacceptable and inequitable.
According to the Congressional Budget Office (CBO), Paygo directives would force spending cuts of $150 billion a year to offset the reduced tax revenues. CBO suggests this would force a cut of $25 billion from Medicare – the maximum amount allowable – and then cuts totaling between $85 billion to $90 billion from other programs such as the federal student-loan program and farm subsidies, Medicaid, the Supplemental Nutrition Assistance Program (SNAP) public education, and the Child Care and Development Block Grant.
The Senate’s version would also eliminate the individual mandate in the Affordable Care Act (ACA). Over ten years, this maneuver would generate $53 billion to be used towards offsetting the cost of tax cuts for billionaires. At the same time, repealing the individual mandate would result in over 13 million more people without health insurance. It will also raise premiums for millions more, and cause uncertainty and instability in the individual health insurance market.
Similarly, the Child Tax Credit proposal in the Senate tax bill would not help families with low and moderate-income families – who struggle to pay for child care. This is because the Senate tax bill would increase the Child Tax Credit (CTC) and simultaneously reduce the amount that families can claim for the actual costs for childcare. As a result, a single mother working full time at the federal minimum wage and earning $14,500 would only get an additional $75.00 in CTC benefits. This supposed benefit does nothing for income compromised families – striving to make ends meet- to counter the high cost of child care that they are faced with every month.
The economic inequities created by this proposed tax cut bill exacerbates the existing income disparities between the rich and poor. NASW believes that the Tax Cuts and Jobs Act only adds to the real and perceived notion that our country has turned its back on the have-nots and is catering to the demands of the super-rich. Therefore, we call on the Senate to reject this bill in favor of an approach that reduces extreme economic inequality when reforming our tax system.
Founded in 1955, the National Association of Social Workers (NASW) is the largest membership organization of professional social workers in the world, with more than 120,000 members. NASW works to enhance the professional growth and development of its members, to create and maintain professional standards, and to advance sound social policies.