Republicans in the House of Representatives presented a budget proposal Tuesday. According to the new proposal, federal deficits will be eliminated in ten years. This would include major overhauls to Medicaid, Medicare and any other social safety net programs. This $3.8 trillion proposal promises a shrinking government and lower taxes.
The proposal addresses concerns of those worried about cuts in military spending and those concerned with “fiscal discipline.” The increases in military spending through emergency war funds that are not subject to a sequester, meaning there is no congressionally mandated spending cap.
The Republicans appear to be extremely focused on eliminating deficit. Some of the savings will be found in the repealing of the Affordable Care Act. Republicans are in control of the House and the Senate for the first time since 2006. The budget is a test of the Republican party’s ability to unify and govern. The House budget will reduce spending by $5.5 trillion over ten years. In 2025 there is a projected surplus of $33 billion. This plan will be presented Wednesday, with the promise of a balanced budget.
President Obama is poised to speak out with any disagreements he may have in the approach of the proposal in Cleveland, Wednesday. The proposal does not emulate the future or growth for America, according to President Obama. America needs a budget that will ensure the middle-class can maintain security.
A White House official says the proposed Medicare plan, repealing the Affordable Care Act and the desired changes to Medicaid is an “attack on the American healthcare system.” Tom Price (R, GA), the House Budget Committee Chairman, believes that people are unhappy that the country’s problems are not being dealt with, but this proposal proposes a way to deal with major problems while saving money and strengthening social safety net programs. Price says the Republicans will be funding priority programs and reducing spending where a program is neither efficient nor effective.
The budget proposal would give control of Medicaid and food stamps over to the states to reduce federal spending. There are also cuts in entitlement programs adding up to $1 trillion in ten years. The proposal does not state how, when or where those cuts will be made.
Democrats believe the proposal is full of gimmicks that only make it appear to eliminate deficits. The House wants to repeal the Affordable Care Act, but is relying on government revenues that includes $1 trillion that would be gained through the law. Representative Chris Van Hollen, top Democrat on the House Budget Committee said, their proposal does not have any balance,” not even under Enron accounting rules.”
President Obama’s budget proposal relies on tax increases to cover deficits. It also included an increase in military and domestic spending, however, the White House has made it clear that there will be no military spending that is not equal to non-defense spending. Most Republicans will not agree on a budget that does not increase military spending with so many imminent threats. Current law would raise military spending to $523 billion but that does not include the Overseas Contingency Operations (OCO), which is a separate war fund. Obama had the idea to increase military spending to $561 billion and added $51 billion for the Pentagon through the OCO making military spending $612 billion.
House Republicans put military spending at the sequester level and added $90 billion through the OCO totaling $613 billion. Some of this increase would have to be offset, which is unlikely, so funding will have to be lower. Conservative Republicans call the contingency fund a magician’s act, or sleight of hand. However, they will not let that prevent them from voting for the budget. Most House Republicans are poised to pass the budget using shortcuts that will allow them to bypass Senate Democrats to send the repeal of the Affordable Care Act to the president. This is called, “reconciliation” and the House and Senate will have to both pass the budget in order to use this procedure.
By Jeanette Smith
Photo of courtesy of Caleb Smith – Flickr License