For Immediate Release
Monday, July 30, 2001
Republican Leaders Admit Massive Tax Cut Means Raid on Social Security and Medicare
Washington, DC —In the face of mounting evidence that the $1.35 trillion tax cut they approved two months ago is already eating into the remaining budget surplus, Republican leaders are publicly confessing that they may also raid the Social Security and Medicare trust funds.
In public comments and an internal GOP memo, House Speaker Dennis Hastert and other Republican representatives have acknowledged that they may well dip into the Medicare and even Social Security surpluses to make up for losses in revenues resulting from the massive 10-year tax cut proposed by President Bush and passed by the Republican Congress as well as the slowing economy, as opponents and many economists had predicted would occur:
House Speaker Dennis Hastert: "The Medicare trust fund is debatable. We're trying not to—we're trying to stay out of it...I would hope not" (Washington Post, 7/30/2001).
GOP Memo: "We are possibly already into [the] Medicare [Part A] trust fund this year and every year through FY05…We also are very close to touching the Social Security surplus in FY 03" (BNA Daily Labor Report, 7/27/2001).
House Budget Committee Chairman Jim Nussle: "There's not enough for hopes and dreams…We could very easily dip into other fenced areas like Medicare and Social Security" (Washington Post, 5/21/2001).
"Republicans are finally admitting what we've been saying all along: President Bush's gigantic tax giveaway for the wealthy is threatening our nation's long-term fiscal health," said Gerald W. McEntee, President of the American Federation of State, County and Municipal Employees (AFSCME). "It's breathtaking that the Republicans were able to ruin a decade of progress in reducing deficits in only a few months."
AFSCME is a co-founder of Fair Taxes for All, a coalition of over 500 national organizations that opposed the Bush tax plan and favor using the surplus in a more balanced and equitable way.
Mr. McEntee noted that members of Fair Taxes for All are sending a joint letter to all members of Congress this week warning them not to pass any further tax cuts or repeal "sunset" provisions that end the tax cut after 10 years. The coalition will also put extra pressure on those members of Congress who supported the final bill — both Republicans and Democrats — to rethink their votes.
"We will not forget which of our representatives abandoned average families. They will continue to hear our voices as the surpluses disappear and the nation faces the terrible consequences of this reckless tax cut," Mr. McEntee warned.
