McConnell Touts Tax Bill Benefits, Skeptics See Few For Kentucky

Dec 20, 2017

Kentucky’s senior senator is hailing the GOP's massive tax bill as a ticket to economic growth that delivers desperately-needed tax relief to middle class families, but detractors count the lawmaker’s home state among the biggest losers if the bill becomes law.

Sen. Mitch McConnell has stayed on message when discussing the tax overhaul, blaming Democrats and uneven media coverage for the bill’s thin poll numbers.

"Anytime you come out with a new proposal, at least new to the public, it gets beat up a lot. Most of the press, left of center, hit it pretty hard. Of course the Democrats all doubled down against it," the veteran lawmaker told The Hill.

The majority leader also argues that axing the Affordable Care Act’s individual mandate penalty – that’s the fine non-exempted Americans must pay if they don’t obtain health insurance – will free cash-strapped Kentuckians to make their own decisions about whether to purchase health insurance.

"We voted to repeal Obamacare's individual mandate tax, so that low and middle income families are not forced to purchase something they either don't want or can't afford," McConnell remarked on the Senate floor.

Opponents, however, say McConnell isn’t doing the commonwealth any favors.

"Kentucky is among the states that benefit the least," says Jason Bailey with the left-leaning Kentucky Center for Economic Policy. "The bottom 60 percent of Kentuckians will see their taxes go up while the richest 1 percent of Kentuckians will get about a $4,700 tax cut. So this is just about some handouts to the people who need it least."

Bailey worries the bill blow up deficits and create momentum on Capitol Hill to slash programs and services many poorer Kentuckians rely on – like Medicare, Medicaid, and SNAP.

While the ACA’s individual insurance markets, federal subsidies, and Medicaid expansions remain in place for now, the KYCEP founder estimates 13 million Americans could wind up losing coverage without the mandate and others in Kentucky and elsewhere will watch their premiums rise.

"This is really a huge step toward undermining the progress we've made in health coverage the past few years and that's the last thing we need (in) a state that has poor health indicators and is facing an opioid crisis," Bailey argues.

New Medicaid signups accounted for the lion's share of Kentucky's roughly half-a-million in health coverage gains, so it's unclear how the demise of the individual mandate might affect markets. Despite declining Obamacare enrollment numbers in recent years, state signups saw an early surge heading into 2018, according to healthinsurance.org. The site cautions that the numbers may have skewed higher due to the short enrollment window.

Reactions online among Kentucky lawmakers have predictably split along party lines, with 6th District Congressman Andy Barr tweeting that typical families of four earning $73,000 per year will receive "a $2,059 tax cut next year." Median yearly household income in Kentucky sits at around $44,811, according to census.gov.

Berea College in the Crosshairs?

Kentucky’s Berea College, a tuition-free private liberal arts school, has become an unlikely political football as Congress does battle over the GOP tax bill.

Eleventh hour changes to the Republican measure would put Berea, along with a few other schools, on the tax hook for their endowment earnings. The new language was introduced amid a tug-of-war between Republicans and Democrats as the legislatuion nears final passage.

Congressman Barr laid the blame squarely on the opposing party.

"Senate Democrats used procedural rules to insist that this exemption be stripped out of the final conference report," Barr charged. "It's unfortunate that they put partisan politics ahead of insuring that students, many of whom are low income and first generation college students, at work study colleges would continue to be able to receive tuition-free education."

Meanwhile, Kentucky Democratic Rep. John Yarmuth countered that the provision is what happens when one party rushes “bad policy” through Congress.

Yet Berea’s president, Lyle Roelofs, isn’t pointing the finger at either side, instead insisting the school is a “little piece of grain between two gristmills” and that neither party intentionally targeted the college. Roelofs says he hopes lawmakers can find a solution, but if not, the change will hurt the college’s mission.