If Republicans pass either of their tax bills, Medicare and a host of other federal programs will face automatic spending cuts. Medicare would be facing a cut of 28 billion dollars in 2018. The cuts to Medicare would increase annually until 2027 when 56 billion dollars would be taken from Medicare.
Other mandatory programs that haven’t been exempted from the cuts such as: Agricultural Subsidies and Supports; Operations and support for Customs and Border Control; Student Loan Administration; and more would receive no funding through 2026.
The reason for the scheduled cuts is the Pay as You go Rule (PAYGO). Under statutory PAYGO, legislation adding to the debt creates automatic sequesters (across the board cuts) to mandatory spending programs that haven’t been exempted. PAYGO limits cuts to Medicare to four percent annually. All other affected programs would be eliminated because the 1.5 trillion-dollar debt created by the Republican tax bills is large enough to swallow them whole.
In the Senate, the Byrd Rule requires 60 votes to waive statutory PAYGO. So, Republicans couldn’t avoid statutory PAYGO wreaking Havoc on federal programs and the American public without Democratic support.