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Republicans are preventing their tax bill from triggering a $25 billion cut to Medicare

They’re still talking about cutting entitlements down the road.

President Trump Meets With GOP Senators During Their Weekly Policy Meetings Chip Somodevilla/Getty Images

On its own, the Republican tax bill would trigger something President Donald Trump promised would never happen: an automatic $25 billion cut to Medicare. Now, Republicans are making sure it won’t.

In a last-minute dash to keep the government open, Republicans are set to vote on a stop-gap federal spending bill Thursday that will include a waiver to the “pay-as-you-go,” or PAYGO rule — a 2010 law that says all passed legislation cannot collectively increase the estimated national debt.

Republicans passed a nearly $1.5 trillion tax cut this week, which the Congressional Budget Office said would trigger a sequestration across some major mandatory spending programs, like Medicare, federal student loans, and agriculture subsidies, and even some funding for customs and border patrol. This waiver would allow Congress to bypass the sequestration law meant to keep the deficit in check.

Republicans, who have long decried the dangers of the national debt, have come under fire in recent weeks for pushing a deficit-busting tax cut that’s primarily geared towards corporations and America’s highest earners.

It’s clear they’re intent on making sure their tax bill doesn’t trigger a sequester. But that doesn’t mean these mandatory spending programs are safe from budget cuts. There’s already early indication of an appetite to address the national debt with entitlement cuts down the road.

A quick primer on the PAYGO law

There’s no question that Republicans are facing a major deficit problem with their tax cut. By the most recent estimates, the bill will increase the deficit by $1.46 trillion in the first 10 years, or — when adjusted for economic growth — by $1 trillion.

Already, there have been reports that the actual cost of the tax bill could even be higher; upwards of $2 trillion when considering the likely renewal of temporary individual tax cuts.

Republicans haven’t seemed to care about the deficit impact of their tax bill, claiming the tax bill would unleash unprecedented economic growth that would offset possibly all of the bill’s cost. There’s no economic evidence to this effect.

But the Office of Management and Budget keeps an account of every piece of legislation that impacts revenue or mandatory spending. At the end of each calendar year, OMB checks the scorecard — if it increases the estimated deficit, then OMB is required to implement an across-the-board sequestration of mandatory spending programs to offset the cost. For example, with this tax bill it typically “would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion,” according to the CBO’s letter to Minority Whip Rep. Steny Hoyer (D-MD).

Medicaid, Social Security, food stamps, and all social safety net programs are exempt from this sequestration. But Medicare, the Social Services Block Grant, student loans, and mandatory spending in the Affordable Care Act (other than exchange subsidies and Medicaid expansion), among others, would all be on the chopping block.

Cuts to Medicare are capped at 4 percent, about $25 billion per year, meaning cuts to the other mandatory spending programs would have to make up the difference.

Because PAYGO is a law, Congress will have to pass another law to change it, and they aren’t allowed to do this through budget reconciliation — which is why Republicans are attaching the waiver to the short-term spending bill.

Since the law’s passage in 2010, this kind of sequester has never gone into effect, and Republicans are now taking action so it doesn’t take effect this year as well.

Top Republicans are already talking about entitlement reform

Passing a waiver to the PAYGO law doesn’t mean entitlement programs are safe from budget cuts, however.

While Trump has promised again and again to protect Medicare and Social Security, House Speaker Paul Ryan and other top Republican leaders, are already sounding the alarm about an out-of-control deficit problem, targeting the programs Trump promised to protect.

“We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said on a talk radio show.

It’s a line of messaging Republicans have escalated in the past weeks. Their tax bill doesn’t have the deficit problem; it’s the other stuff, they say.

“The reason CHIP is having trouble is because we don’t have money anymore,” Sen. Orrin Hatch (R-UT) famously said on the Senate floor, defending Congress’s delayed renewal of the Children’s Health Insurance Program, which has been expired since September due to disagreement on ways to offset the program’s cost.

Republicans are pointing to programs like Medicare, Medicaid, and Social Security.

“Frankly, it's the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that's really where the problem lies, fiscally speaking,” Ryan said.

In June, Rep. Tom Cole (R-OK), who sits on the House Budget Committee and is the chair of the appropriations subcommittee that manages health spending, called Trump’s promise to leave Medicare and Social Security and balance the budget a “fantasy.”

“We have been talking about Medicare and Medicaid reform all the way through,” Cole told Vox then. “I’m not asking the president to abandon his principles. He is the president of the United States. He doesn’t have to sign something. But we shouldn’t abandon ours either.”