The House Freedom Caucus should raise the issue of automatic spending cuts that would occur to the Medicare program should Congress pass a sweeping tax overhaul, Sen. Chris Van Hollen wrote in a Wednesday letter to the group.
“While I did not always agree with Freedom Caucus positions when I served in the House of Representatives, the Freedom Caucus has been a strong supporter of debt reduction,” the Maryland Democrat wrote.
At issue is the so-called pay-as-you-go law, or Pay-Go, which requires cuts to mandatory spending programs if actions during a congressional session raise the deficit over a five- or ten-year window.
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The Republican tax bill can add up to $1.5 trillion to the federal deficit in order to still qualify for the fast-track procedure known as reconciliation, conditions set under the fiscal 2018 budget resolution approved by Congress this year.
Should such a bill pass, the Office of Management and Budget would be required to immediately reduce fiscal 2018 spending by $136 billion, the Congressional Budget Office reported Tuesday.
Medicare would suffer the largest cut — an expected $25 billion, per the CBO — but several others would be affected by the remaining $111 billion in cuts.
“If Congress passes a deficit-financed tax cut this year, there will be little time to waive statutory PAYGO before the session ends,” Van Hollen wrote. “The sequestration under Statutory PAYGO would harm Americans across the country.”