Southern California Reps. Steve Knight (R-Palmdale) and Mimi Walters (R-Irvine) were key players in passing the GOP’s new tax bill. Now bad news on the bill continues to trickle in, shining a light on the harmful long-term impact of the new law.
According to a new report from Bloomberg, Moody’s, one of the “big three” ratings agencies, is worried about the fiscal stability of the United States. Moody’s analysts said the United States credit rating faces “downward pressure in the long-term, due to meaningful fiscal deterioration,” which could affect its credit rating over time.
A key reason for concern is the Republican tax bill, signed into law in December, which adds $1 trillion to the deficit.
“The recently-agreed tax reform will exacerbate and bring forward those pressures,” the Moody’s analysts wrote.
Without votes from California Republicans, the bill would not have passed, and would not be law today. Knowing the bill would increase taxes for millions of Californians, Knight and Walters joined other California Republicans in voting for the bill.
Knight and Walters continue to spin the tax bill as a success. Despite evidence that companies will pocket the overwhelming majority of the savings, one of the main GOP talking points relies on the myth that company tax savings are “trickling down” to workers.
That sham idea was recently busted, yet again, by financial analysts from Morgan Stanley.
Morgan Stanley analysts expect companies to pass only 13 percent their savings directly to workers. Splashy press releases from companies make for misleading headlines, and both Knight and Walters are guilty of misleading constituents about the tax bill.
Millions of Californians will see tax hikes because of the tax bill. In addition, because of a change to the Affordable Care Act, health insurance premiums in California are set to increase by up to 30 percent next year.
Both Knight and Walters are considered vulnerable this election cycle, and their support for the tax bill and its harmful effects on the economy only increases their vulnerability.