White House warns GOP plans for MAGAnomics would cut vital safety net programs
President Joe Biden was scheduled to make a speech Thursday about his own Bidenomics agenda.
The Biden administration has released a memo warning that the economic agenda being advanced by congressional Republicans threatens popular safety net programs like Social Security and Medicare. The memo comes ahead of a speech President Joe Biden is scheduled to give in Maryland on Thursday on his own “Bidenomics” economic policies.
According to the Hill, White House adviser Anita Dunn writes in the memo: “Today, the President will explain how these harmful cuts fit into the larger Republican budget plan…and what that plan would mean for the American people. And he will contrast that with his plans for Social Security, Medicare, and Medicaid, tax fairness, and fiscal responsibility—areas where Bidenomics and MAGAnomics couldn’t be more different.”
The administration has adopted the term “Bidenomics” to refer to the principles behind economic legislation Biden has signed into law, including the American Rescue Plan, the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act.
In the memo, the administration refers to the proposed 2024 budget released in June by the House Republican Study Committee, titled “Protecting America’s Economic Security,” as containing the principles underlying MAGAnomics. There are 175 Republican members of the committee, representing 78% of the 222 Republicans currently in the House majority.
The budget calls for preserving the tax cuts passed in 2017 under former President Donald Trump, raising the Social Security retirement age, and privatizing Medicare. The proposal also suggests repealing significant portions of the Inflation Reduction Act and building a wall on the U.S. border with Mexico.
The plan “would likely drive tens of millions into the ranks of the uninsured and severely reduce access to health care and long-term services and supports needed by low-income children, families, seniors, people with disabilities and other adults,” research professor Edwin Park of the Georgetown University McCourt School of Public Policy’s Center for Children and Families wrote in an analysis of the budget released on June 26.
The advocacy group Social Security Works warned in a statement released on June 14 that the plan would “destroy Social Security as we know it.” “These changes would transform Social Security from an earned insurance benefit, which replaces wages lost in the event of old age, disability, or death, into a subsistence-level welfare benefit,” said Nancy Altman, the president of the group.
The budget also calls for repealing the clean energy investments included in the Inflation Reduction Act.
Many of the proposals in the budget are similar to economic principles the Trump administration enacted or advocated.
The Trump administration described its economic proposals as “MAGAnomics” in a July 2017 op-ed in the Wall Street Journal written by Mick Mulvaney, then the head of the White House Office of Management and Budget. Mulvaney went on to serve as Trump’s acting chief of staff from 2019 to 2020.
In the op-ed, Mulvaney advocated making steep cuts to taxes, government regulation, and welfare programs and prioritizing fossil fuel over clean energy.
“If we enact the president’s broad agenda—if MAGAnomics is allowed to work—we will have set the stage for the greatest revival of the American economy since the early 1980s,” Mulvaney wrote. He claimed that passage of Trump’s plan would lead to 3% economic growth, and other officials in the administration predicted growth “substantially over 3 percent.”
In 2018, the year following the passage of the Tax Cuts and Jobs Act, the economy grew 2.9%. Despite Trump’s claims that his tax policies would benefit working-class people, a 2020 analysis by the Tax Policy Center determined that 60% of the tax savings in the law went to people in the top 20% of income earners.
After the legislation cut corporate tax rates by 40%, federal revenue from corporate taxes fell by 31% the first year the law was in effect.
Soon after, the COVID-19 pandemic severely impacted the global and domestic economies, pushing the unemployment rate as high as 14.7% in April 2020. Experts have estimated that the pandemic severely cut the economic output of the United States by as much as $14 trillion.
Biden signed the American Rescue Plan, which was designed to stimulate the economy after the pandemic. Additionally, he successfully shepherded the passage of an infrastructure bill after Trump promised to do so and failed to deliver.
Since Biden took office, the unemployment rate has gone from 6.2% in January 2021 to 3.8% in August 2023. More than 13 million jobs have been added to the economy under Biden, more than under any other president in a single term.
The investment firm Morgan Stanley credited Biden’s agenda for recent economic growth in an analysis released in June, and upwardly revised its forecast for growth. Ellen Zentner, the group’s chief U.S. economist, said the infrastructure law is driving a boom in large-scale infrastructure.
“The economy in the first half of the year is growing much stronger than we had anticipated, putting a more comfortable cushion under our long-held soft landing view,” Zentner added.
Published with permission of The American Independent Foundation.
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