The White House released a tax and spending plan Monday that would not eliminate the federal budget deficit after 10 years, its first public acknowledgment that large spending increases and the $1.5 trillion tax cut are putting severe pressure on the government’s debt.
The proposal, titled “Efficient, Effective, Accountable: An American Budget,” sets forth Trump’s priorities for Congress.
The plan calls for major cuts to Medicare that conservatives have long sought. It would continue to markedly increase military spending and set aside money for a wall along the U.S.-Mexico border.
But even with these Medicare reductions, which add up to more than $3 trillion in cuts over 10 years, the proposal would not bring the budget into balance because of the lost tax revenue and higher spending on other programs.
The biggest Medicare change would have seniors hit the so called prescription drug doughnut hole sooner and let far fewer leave the coverage gap, where they then pay only 5 percent of the drug cost — and Medicare is on the hook for 80 percent.
The White House projects a large gap between government spending and tax revenue over the next decade, adding at least $7 trillion to the debt over that time. In 2019 and 2020 alone, the government would add a combined $2 trillion in debt under Trump’s plan.
Trump's Medicare changes may shock many elderly Americans back into the work place, resulting in a rise in the Labor Force Participation Rate.
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