Republicans have passed their massive tax reform bill through Congress, but they may have to wait a bit longer for it to become law.
President Donald Trump still needs to sign the bill, and he might not do so until the new year. That's for one reason: to avoid a massive $25 billion cut to Medicare.
The cut would come from the Pay As You Go Act, or PAYGO. The rule requires that any substantial increase in the deficit from a bill must be offset by reduced spending elsewhere. If no offsets are included in the bill, automatic cuts kick in when the deficit starts to grow.
The tax bill will add substantially to the deficit — around $1.5 trillion over 10 years — meaning that under PAYGO rules, an equal amount of spending must be cut to make up for the shortfall. According to a letter from the Congressional Budget Office, $150 billion a year would need to be slashed.
