Right now, the Republican controlled Congress is speeding down a path that would raise costs for food and health care for millions of families by taking away Medicaid and Supplemental Nutrition Assistance Program benefits. It would do so in order to help pay for massive tax cuts primarily benefiting the most well-off, including millionaires and billionaires.

In this episode of Policy for the People, we speak with Oregon Senator Ron Wyden about what the budget blueprint currently being discussed in Congress means for Oregonians and the nation. 

We also speak with Steve Wamhoff, Federal Policy Director at the Institute on Taxation and Economic Policy, about his recent report titled Federal Tax Policy: What Should It Accomplish? In it he argues that our federal government needs to raise more revenue, not less, and do so in a progressive way. In other words, we need to go in the opposite direction from the current plan in Congress.

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Transcript

We make this transcript available for your convenience and to increase the accessibility of our content. The transcript was generated by software and was slightly edited for clarity. If you are able to, we encourage you to listen to the recording.

Juan Carlos Ordóñez, host: Rarely have the stakes been so high in Congress. Right now, the Republican controlled Congress is speeding down a path that would raise costs for food and health care for millions of families by taking away Medicaid and Supplemental Nutrition Assistance Program benefits. It would do so in order to help pay for massive tax cuts, primarily benefiting the most well-off, including millionaires and billionaires. What does the budget plan moving through Congress mean for Oregonians and the people of this country?

Today on Policy for the People, we get the perspective of Oregon’s senior Senator, Ron Wyden. My colleague Alejandro Queral, Executive Director of the Oregon Center for Public Policy, spoke with Senator Wyden. In the first half of the show, we share their conversation.

The Republican tax plan favoring the wealthy would result in a huge loss of federal revenue, and that is going in the opposite direction of where our nation needs to go, argues Steve Wamhoff, Federal Policy Director at the Institute on Taxation and Economic Policy. In the second half of this show, I speak with Steve Wamhoff about his analysis.

Alejandro Queral: Senator Wyden, and thank you for joining us in Policy for the People once again. It’s a privilege to have you on. I want to start by asking you about the Trump administration and how it has taken a frenzied approach to cutting federal spending, putting at risk programs that are essential to the well-being of Americans, from health care to food assistance, while also undermining key institutions and longstanding norms, including the rule of law. How are Oregonians reacting to these rapid changes? What are you hearing from your constituents? 

Senator Ron Wyden: Well, based on the number of people that are coming to my town hall meetings, the interest is just off the charts. For example, I had a town hall meeting recently in Sisters in Central Oregon; we had 1,400 people. The gym was filled and we’ve had ten meetings open to all.

I’ve had more than 1,100, and the interest is just extraordinary. And that’s because Oregonians have really figured out what the Trump operation is all about. It’s about giving tax cuts to billionaires, people who are billionaires several times over and paying for it by cutting Medicaid, by cutting anti-hunger programs, housing programs, and the essentials. And, you know, this is a very skewed approach with respect to government. We all want people to do well, but the Trump people just want to give all the breaks to the people at the top, and everybody else is going to have to suffer and try to make ends and meet, and it’s going to cause a lot of hardship. 

Alejandro: Thank you. Yes, I think those town halls do reflect a lot of concerns from Oregonians across the board. And one of the issues that you raise is the upcoming fight on the federal budget. The Republican controlled Congress passed a budget framework in late February calling for $2 trillion in cuts to programs like food Assistance, the V.A., Medicaid, all those that you’ve mentioned. But I wanted to focus on Medicaid for just a minute because according to the latest report from the Oregon Health Authority, more than a third of Oregonians are enrolled in Oregon’s Medicaid, now known as the Oregon Health Plan. And more than half of all children rely on the program for medical care. So this is truly a critical issue for many Oregonians. How do you see the Medicaid fight playing out in the Senate? 

Senator Wyden: Well, I’m all in on this battle. I’m the senior Democrat on the Senate Finance Committee. We have jurisdiction over Medicaid. And the fact is, this is a lifeline for vulnerable Oregonians. A very substantial portion of the Medicaid bill is also paid for by Medicaid.

And what I can tell you is in the House of Representatives, the Republicans are kind of on Medicaid playing hide the ball; they don’t want anybody to really know what they’re up to. In the House of Representatives they have said they’re going to save in the Commerce Committee, which has jurisdiction over Medicaid, close to $1 trillion. You cannot possibly get that level of savings without causing enormous harm for vulnerable seniors.

And I go back to my days as co-director of the Oregon Gray Panthers, and we are in this fight every single day in every possible kind of way. Mehmet Oz, for example, is the candidate to run the Center for Medicare and Medicaid Services. I’ve taken him on in open hearings. I led the fight and the committee voted against him, marshaled the troops against him. We’re going to continue that kind of approach.

Alejandro: How do you see things like worker requirements playing in favor of this notion of hiding the ball that you said House Republicans are playing? Work requirements have been used in the past to reduce enrollment for folks who are otherwise eligible. Can you talk a little bit about those?

Senator Wyden: This is a very important question. I’m glad you asked. The way the Trump administration is doing it is just bureaucratic water torture. They’ve tried it in a couple of states — endless amount of paperwork, expenses. Alejandro, the other fact that is often missed is most of the people on Medicaid, a very substantial portion, are already working, and then others are taking care of family. Others are raising kids. Others are going to school. And this is something where philosophically, the Trump people think that they can find a way to make these huge cuts in crucial domestic needs, particularly health care and hunger, and just take those dollars and immediately pour them into more tax breaks for the people at the top. 

I had a program on the floor of the Senate just a couple of days ago, and we talked about the billions and billions of dollars our tax legislation has dealt out to just one pharmaceutical company. And I think that that too is part of the priorities they have. Give the breaks to these very wealthy individuals, the multinational corporations, and then say that they can enjoy the breaks because they’re paid for by people of modest means. 

Alejandro: I want to come back to taxes in just a minute, because that is a very important topic, and perhaps the driver of many of these issues, as you’ve mentioned. But first, I want to talk about another key safety net program that is potentially on the chopping block, which is the Supplemental Nutrition Assistance Program, SNAP, which used to be called food stamps. Do you think your Republican colleagues in the Senate are willing to pass the type of deep cuts their budget resolution calls for, or is there room for the public to push back and try to make them reconsider the extent of these cuts?

Senator Wyden: Well, I would urge everyone following this discussion to push back, because I’m not sure a lot of these Republican senators know a whole lot about the SNAP program. They don’t see the children, for example, that we see in our state. You know, one out of six kids face daily challenges with hunger. A lot of these legislators at the end of the week they go off and play golf with lobbyists and they don’t see them.

We have opened all town hall meetings, had more than 1,100 of them. And so I get a chance to see how Oregonians and families in every part of the state have this great need to put food on the table, and I try to ensure that kids have access to the food they rely on from school meals. These are priorities for me. I don’t think a lot of elected officials even see that. So I just hope that as a result of this program, people go to their elected officials and ask about it. 

And for example, in a lot of instances, these families are just being cheated. There are sophisticated criminals ripping off their benefits, essentially because their cards, SNAP cards, are not as secure as a lot of the cards, for example, that a bank executive will have. And so we’re trying to get that fixed and that’ll be a priority, because I’m not going to sit around and say that Oregonians who are going hungry are going to get their benefits stolen by a bunch of cyber criminals.

Alejandro: As you’ve mentioned, many of these cuts are driven by the desire to extend the 2017 Trump tax cuts, which were heavily skewed in favor of the most well-off. Beyond the impact on the nation’s safety net, what would extending the 2017 Trump tax cuts mean for working families, our state, and for the state of our democracy? 

Senator Wyden: Well, it’s certainly going to raise deficits. It’s going to cause real problems in terms of interest rates. IHikes in interest rates really affect people of modest means who are just trying to afford food and shelter and a way to get to work. So make no mistake about it. When you have big, big deficits, the billionaires get along fine, but people of modest means really feel the consequences. And under Trump’s plan, the ultra wealthy individuals rake in millions each year getting these tax breaks of extraordinary sums. And their loopholes are about the size of the Grand Canyon. 

Alejandro: Indeed, OCPP has been documenting the disparity in both income and wealth over the last 40 years. And we continue to see the accumulation of wealth by the very richest. In fact, many of the conversations around the Trump tax cuts have been focusing on how they disproportionately have benefited the richest Americans. But there’s another conversation happening, perhaps more under the radar around corporate taxes, which were also part of the 2017 Trump tax cuts. Are there further tax cuts or changes to tax law that would benefit large corporations as part of the discussions with your Senate colleagues?

Senator Wyden: Well, I think that, at every meeting, you see the Senate Republicans supercharging the effort to help the people at the top the way they did in 2017. For example, when someone listening to this program pays taxes, they pay taxes with every single paycheck. They can see their FICA right there on their paycheck. And they pay with every single one that they get. The people at the top pay what they want, when they want to. And to a great extent, if they buy, borrow and die, they can get out of paying taxes for years on end. The tax avoidance for the big multinational corporations is a little different. The way I described it is they engaged in something called round tripping. For example, they can make sales of enormous amounts in the United States, but then basically go on this excursion overseas and pay taxes elsewhere. The round tripping and the abuses you see in both areas, multinational corporations with round tripping and then the double standard with respect to individuals and billionaires. And in both cases, the people of modest means pay more and it goes to benefit the people at the top.

Alejandro: Well, and speaking of corporate tax avoidance and other forms of tax evasion, we’ve been hearing from press reports that the Trump administration has cut some 11,000 workers from the Internal Revenue Service. IRS officials have warned that this could lead to a $500 billion loss in revenue collections. What do you make of these cuts to the nation’s revenue collection agency, especially given the administration’s position that this is part of their attempt to reduce the federal deficit?

Senator Wyden: Well, we’re just a few weeks from the filing deadline, the income tax filing deadline. And the Trump/Musk operation is really hitting users with a wrecking ball. And, the rich, again, have all these accountants and lawyers. But, the person of modest means really doesn’t. There aren’t people that they can go to and get some help. We have tried to streamline the bureaucracy and the red tape, but when you have these cuts and there aren’t people there, then you have people of modest means having difficulty cutting through the red tape and the bureaucracy and people at the top, again, just walking away with a big enrichment in terms of their pockets.

Alejandro: Thank you, Senator Wyden. The last question I want to ask you is related to state legislatures: how legislators will have to deal with a potential budget deficit as a result of the changes to investment policy that the federal administration is taking on, by reducing all these programs. Can you talk a little bit about the kind of impact that you foresee the states having to deal with? And if you have a message for our state legislators, what would you like to say to them?

Senator Wyden: Well, I would take Medicaid, for example, because the federal government pays close to 70% of the bill, and it’s a federal-state program. If the federal share is reduced, the state of Oregon has a choice: either have less service for people who are poor and vulnerable or cut programs elsewhere. And I’ve been talking to a lot of the legislators, and it really is a tremendous problem because you’re skirting the priorities. You’re hurting the poor. And you’re having the state, basically, be in a position to either inflict more pain or have things shifted to other programs.

Alejandro: Thank you so much, Senator Wyden. And, it’s been a pleasure talking to you. And thank you for all your work in Washington, DC. Much appreciated. 

Senator Wyden: Alejandro. Thank you. And, we’ll look forward to staying in touch, because, I mean, I can tell you that the fighting back against this takes a lot of what we call chutzpah, which is grit and, and determination. You pick your passion, then you drill down and fight back. And that’s what the community is working on. That’s what I’m doing. 

Juan Carlos, host: That was Oregon Senator Ron Wyden discussing the big tax and budget fight presently going on in Congress. 

In two different ways, the Republican proposal to extend the 2017 Trump tax cuts, tax cuts heavily favoring the wealthy, take us in the wrong direction, says Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy. Steve recently wrote a report titled “Federal Tax Policy. What Should It Accomplish?” I spoke with Steve about the main takeaways from his report. 

Juan Carlos: So, Steve, right now, the Republican controlled Congress has put together a budget blueprint that, among other things, would extend the massive cuts enacted during the first Trump administration, the massive tax cuts. And extending these tax cuts, which are heavily tilted in favor of the rich, would cost the federal government trillions of dollars in lost revenue over the next decade. In a recent report that you wrote, you argue that rather than reducing federal revenue, our nation needs to go in the opposite direction. We should be increasing federal revenue. Can you walk us through your argument? 

Steve Wamhoff: I guess I would say taxes are super complicated sometimes, but I think that the overall story is pretty simple. The federal government needs to collect more revenue, and they need to collect it from wealthy individuals and corporations. And that’s another way of saying there’s really two important things that the government should be doing: creating a tax system that is more adequate, meaning it collects enough revenue to pay for investments that we need, and also create a tax system that is more progressive, meaning it asks more from the wealthiest Americans to contribute. And this Congress and this President are headed in the opposite direction by doubling down on the regressive tax cuts that were enacted under Trump in 2017.

They want to extend parts of those tax cuts that are going to expire. And they also want to add, several additional tax cuts on top of those. If this happens, we will lose a lot of revenue. And it won’t be to help people who actually need help. It’ll be, it will mainly benefit the wealthiest Americans. 

Juan Carlos: How does the U.S. tax collections revenue collections compare to peer nations, other developed countries?

Steve: The US collects less revenue than other countries that are comparable countries that we might compete with or trade with. There’s data from the OECD, the organization for Economic Co-operation and Development. That’s the sort of the club of countries that are the developed countries that are similar to the US, and they include most of the countries that the US trades with and competes with. And most of those countries collect tax revenue that is more than 35% of their economic output. In the United States, the revenue we collect overall is equal to only 25% of our GDP, or 25% of our total economic output. 

Juan Carlos: Would it be fair to say then that, relative to other developed nations, Americans don’t pay very high taxes?

Steve: Right. The idea that the United States is overtaxed is simply wrong. We hear this from some lawmakers, particularly in the president’s party, and that’s it just does not bear out when you look at statistics where we’re under taxed compared to other comparable countries. 

Juan Carlos: And this comparison, does it also take into account the fact that Americans pay state and local taxes, that we’re sort of comparing apples to apples here?

Steve: This is looking at all of the different taxes that are collected within each country. So it includes federal, state and local taxes. And it is the case that some state governments and some local governments need to raise revenue. But clearly, the federal government has the greatest capacity to raise revenue, and the federal government will always be the most important collector of revenue.

Juan Carlos: How does the fact that the U.S. collects less revenue than most other developed nations impact the lives of ordinary folks? In other words, why is this important for listeners to know? 

Steve: Well, several reasons. For one thing, the United States invests less in its people than other countries. Other comparable countries invest in their people. You know, when you look at the OECD countries and you look at how much they spend on different types of public investments and public services as a share of their GDP or as a share of their economic output, the U.S. is pretty low. The U.S. ranks 24 out of 29.  The countries that spend less on public investments, in public services, are Latvia, Costa Rica, Switzerland, Lithuania and Colombia. Ee should we should be able to provide more for people than Latvia, Costa Rica and Lithuania for sure. So I think that the lack of revenue is associated with this lack of investments that we’re making. 

And there are a lot of other problems, too, associated with the lack of revenue. We have these large budget deficits each year that cannot really be addressed other than with more revenue. Somehow President Trump thinks that Elon Musk is going to cut the budget in a bunch of ways that will save revenue and that is not going to happen. That’s not happening. And, when you really look at the things that the federal government spends its money on, most of that spending is on things Americans don’t want to cut anyway. So I’m just looking at some of the numbers here and 24% of federal spending is on health care programs like Medicare and Medicaid; 21% of the spending is on Social Security. Well, you know, Trump claimed he wouldn’t cut Medicare or Social Security. So what’s left? Well, there’s defense. Defense is 13% of the spending. Veterans are 8% of the spending. Republicans didn’t really run on cutting defense and veterans benefits like that, and they don’t seem to want to cut those things. No one really wants to cut veterans spending. Five percent on education. How much can you really save by abolishing the Department of Education? I don’t know. Another 13% of the spending just goes on interest payments on the national debt. 

So because we don’t collect enough revenue to cover our spending each year, we have accumulated as a nation this national debt and the interest payments on that are taking up 13% of the federal spending every year. Well, you can’t really just stop it. The government can just start making those interest payments without causing cataclysmic economic turmoil in the markets. That’s why they’ve never done that before. 

Juan Carlos: Let’s go to the second argument that you make in your report, which is that we should be working as a nation towards having a more progressive tax system, one that asks proportionately more of the rich than of the poor. Why is that? 

Steve: Well, for several reasons. For one thing, the wealthy benefit more than anyone else from the society that is built with our tax dollars, and they should be asked to contribute more to support it. And what I mean by that is that we all pay taxes that pay for highways, right? And we all benefit from that. If you drive on a highway, you benefit from that. But I think it’s pretty clear that Jeff Bezos has benefited more than anybody else. He has this company that ships products. He’s built this gigantic fortune by shipping products on the highways and the infrastructure that was built with our tax dollars. He has benefited more than other people.

So when you think about the very wealthiest people, their fortunes are built because, you know, we have  this infrastructure that is built with our tax dollars. They have this workforce created by the public education system. They often rely on research that was government funded. Their property rights exist because we have this court system that protects property rights. And we have police that defend those property rights and enforce them. You really cannot argue that anyone’s benefiting from government more than people like Elon Musk and Jeff Bezos. 

I think a related part of that is we have an economic system right that has become very unbalanced. The benefits from our economic system flowing to the people at the very, very top of the economy far exceed what would be necessary to encourage hard work and innovation by these wealthy people. Without a progressive tax code, it’s difficult to imagine how we would ever rebalance that system. 

Juan Carlos: So in your view, what would be the most impactful changes Congress could make to make our tax system more progressive? And I assume that includes not extending the Trump tax cuts that flow to the very rich. 

Steve: Right. The first important thing is: do not extend tax provisions that lose a lot of revenue and mainly benefit the wealthy and corporations. I think the next thing is, what are the permanent parts of the tax code that can be reformed? There are a lot of permanent provisions in our tax code that unfairly benefit the wealthiest individuals and profitable corporations. So when you think about the personal income tax, there is this huge category of tax breaks for income from wealth. So it’s in many ways income from wealth from investments, capital gains, dividends paid on stock, things like that. In many ways, that type of income is taxed more lightly or more generously than income from work. And that’s really unfair. It’s unfair just on principle. Why should someone with one kind of income pay a lower tax rate than someone with another kind of income, right? 

But also, it’s unfair because the kind of income we’re talking about, this investment income, the vast majority of it flows to the richest Americans. So there are a lot of capital gains tax breaks that Congress could shut down. And President Biden did propose to set a lot of them down, or at least limit them in many ways. So that’s one thing. 

Another thing, when you think about the permanent provisions in the tax code, that could be fixed, there are a lot of corporate tax breaks, special breaks, loopholes in the federal corporate income tax that benefit the wealthiest corporations. When you have a provision like this that benefits a wealthy corporation, who ultimately benefits?  it’s going to be the shareholders. And the shareholders are mostly wealthier Americans. Not entirely. But most of the shares in corporate stocks are owned by wealthy Americans and by foreign investors. The benefits of these corporate tax cuts flow to the wealthiest Americans, and a big portion flows out of the country to foreign investors. That doesn’t benefit Americans at all. And there are a lot of things Congress could do to shut down some of those corporate tax breaks.

Juan Carlos: Steve, any final thoughts you want to share with us regarding the improvements we need to make to our tax system? 

Steve: Again, I would say the conversation about taxes can seem really complicated. But I think at the end, the end, it all pretty simple. The overarching story is pretty simple. We need more revenue, not less. Congress should be passing legislation that raises revenue, not  legislation that reduces revenue. And we need a tax system that is more progressive. Wealthy people need to contribute more to federal tax revenue, and that means they need to contribute more directly, meaning higher personal income taxes, shutting down special breaks in the personal income tax that benefit wealthy people. But wealthy people can also pay more indirectly through the corporate income tax that will raise revenue and do it in a very progressive way.