The Republican tax plan expected to be released Wednesday will increase the deficit by $1 to $3.5 trillion over the course of the first decade and $2 to $10.6 trillion by 2040, according to a new analysis released Monday from the University of Pennsylvania’s Wharton School, President Trump’s alma mater.
If the Republican tax plan does, in fact, cause the deficit to surge by $3.5 trillion, then it would violate special procedural rules approved by the GOP last week, which only allow $1.5 trillion to be added to the deficit in order to fast-track the bill in the Senate.
The Trump administration argues that the plan will stimulate enough economic growth to either cover or reduce the deficit.
The Hill added:
The Wharton study estimated that the country’s economy would grow between 1.3 percent and 1.5 percent over the first decade, which would average out to about 0.2 percent of extra growth each year, well below the levels suggested by the administration.
The study also contradicted White House claims that the tax plan’s corporate tax cuts would largely end up in workers’ pockets, estimating that labor wages would only increase 1.3 percent to 1.4 percent over a decade.
The Trump administration has yet to sign a major piece of legislation, putting even more pressure on Republicans to pass tax reform before the 2018 midterm elections.