Trump's budget plan shifts wealth from young to old, analysts say

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By Andy Sullivan U.S. President sweeping would effectively transfer wealth from younger Americans to older generations, nonpartisan analysts say. Though the bill contains breaks for parents, newborns, private-school students and other younger Americans, those benefits would be outweighed by the trillions of dollars it would add to the $36.2 trillion national debt, they say. That could push down economic growth over the long term and leave younger people saddled with higher taxes and mortgage payments. "Future generations are kind of left holding the bag," said Kent Smetters, director of the Penn Wharton Budget Model. The nonpartisan research organization found that a 40-year-old earning close to the median income would effectively lose $7,500 over the course of a lifetime if the bill became law. A 70-year-old with the same income, by contrast, would end up $17,500 richer.Several factors contribute to this disparity. Younger workers, who typically earn less, would not benefit as much from the bill's income tax cuts compared to those at the peak of their earning years. They would also be more exposed to cutbacks in student aid and the Medicaid health program, which covers four out of 10 hospital births in the ."In the short term the benefits are certainly tilted towards higher earners, which is often a good proxy for age," said Jessica Riedl of the conservative Manhattan Institute. But the biggest factor, analysts say, is the $3 trillion the bill would add to the national debt. That is likely to push up interest rates in the years to come and require the government to devote a growing portion of its budget to debt service rather than other purposes. "There is an obvious intergenerational transfer here," said John Ricco of the Yale Budget Lab, which found that the bill would add $4,000 to the annual cost of a home mortgage in the year 2055, when today's newborns will be 30 years old. Republican lawmakers say the bill , which passed the House of Representatives and is now pending in the Senate, would help younger Americans by putting Medicaid on a more sustainable footing and boosting economic growth and entrepreneurship, which would help younger people entering the workforce. The bill also follows through on Trump's campaign promises by carving out new tax breaks for tipped income and overtime pay, which Republicans say could help younger workers in service ...

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