Pelosi compares cost of state and local aid from coronavirus relief bill to 2017 tax cuts

In The News, Covid19Pelosi compares cost of state and local aid from coronavirus relief bill to 2017 tax cuts

Budget & Tax, In The News,  | Quick Take
Jul 7, 2020  | 5 min read | Print Article

This article by Sophie Austin first appeared in Politifact on July 7, 2020

To put the size of a Democratic-proposed coronavirus relief bill into perspective, House Speaker Nancy Pelosi compared its costs with the debt she says was incurred by the Republican-backed 2017 tax bill.

Speaking to ABC News’ “This Week” host George Stephanopoulos about the Heroes Act, a $3 trillion coronavirus relief bill passed by the House in May, Pelosi said, “All of that money that is out there, and it is very significant, is half of what the Republicans put onto the national debt.”

We wondered if that’s accurate, so we reached out to Pelosi’s team to learn more about what she was referencing in her comment. We found that while her specific comparison has merit, it lacks context about the level of overall bipartisan support for measures that have added to the national debt.

Let’s take a look.

Drew Hammill, Pelosi’s deputy chief of staff, told PolitiFact in an email that Pelosi was referring to the portion of the Health and Economic Recovery Omnibus Emergency Solutions Act that would provide aid to state and local governments.

The so-called Heroes Act, which aims to provide money to state and local governments, small businesses, and households, received the support of just one Republican, Rep. Pete King of New York, while 14 Democrats voted against it in the House. The Senate hasn’t taken up the bill.

The legislation’s state and local aid would add $1.13 trillion to the deficit when calculated over a ten year period, according to the Committee for a Responsible Federal Budget.

Hammill said that Pelosi’s phrase, “half of what the Republicans put onto the national debt,” refers to the impact of the 2017 Tax Cuts and Jobs Act, which passed without a single Democratic vote in Congress and was signed by President Donald Trump. The Congressional Budget Office estimated in 2018 that the act would add $1.8 trillion to the deficit over 10 years, or more than $2.3 trillion including added interest expenses on the national debt.

Using those figures, the state and local aid from the proposed coronavirus relief bill would cost 49% or 63% as much as the 2017 tax bill, depending on whether it’s compared to the tax act estimate alone or with added interest. It gave tax cuts to corporations and individuals, and those cuts disproportionately benefit wealthier taxpayers.

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Steve Ellis, president of Taxpayers for Common Sense, said in an email to PolitiFact that Pelosi’s statement sounded accurate.

“If she was saying it how the speaker’s staff is characterizing it, yes, it is roughly half as much,” Ellis wrote.

However, the impact of the 2017 tax cut is still a projection and might be affected by the recession, Ellis said.

Pelosi’s statement is largely correct with respect to the tax cut bill, but it doesn’t tell the whole story of how other measures supported by both parties have contributed to increasing the national debt during Trump’s time in office.

All told, Trump has signed legislation that has added $4.7 trillion to the debt since 2017, according to the Committee for a Responsible Federal Budget. That figure includes the 2017 tax bill, the Bipartisan Budget Act of 2018 ($445 billion), the Bipartisan Budget Act of 2019 ($1.7 trillion) and the 2019 spending deal that repealed Affordable Care Act taxes ($500 billion), among others. The 2018 and 2019 budget bills and the 2019 spending deal all received large numbers of both Democratic and Republican support.

Our ruling

Referring to the proposed Heroes Act approved by the House, Pelosi said, “All of that money that is out there, and it is very significant, is half of what the Republicans put onto the national debt.”

Pelosi’s statement has merit in that the state and local aid proposed in the Democratic coronavirus relief bill amounts to about half of the projected 10-year deficits created by the Republican tax cuts in 2017.

But it implies that Republicans alone are to blame for increases to the national debt. A broader look at legislation signed by Trump shows that both parties have supported legislation that has added to the national debt.

We rate the statement Mostly True.

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