House Budget Committee chair: GOP budget hits 'sweet spot'
House Budget Committee chair: GOP budget hits 'sweet spot'
House Republicans on Tuesday unveiled their budget proposal which promises to cut trillions of dollars in social safety net and other domestic programs while sharply boosting military spending – all in an effort to balance the budget in the next 10 years.
The proposal, authored by Budget Committee Chairman Diane Black, R-Tenn., plans to turn this year’s nearly $600 billion projected deficit into a $9 billion surplus by 2027.
The budget includes cuts that total about $5.4 trillion in the next 10 years.
“A budget is our congressional responsibility,” Black told Fox News. “We’re doing a lot of different measures other than just the traditional budget, but the budget is what begins that process of being able to do tax reform and reductions.”
A committee vote on the budget proposal is expected for Wednesday, but action by the entire House could be delayed due to infighting in the party. Conservatives are hoping for deeper spending cuts while moderates are concerned that reductions could go too far.
And the committee’s ranking member slammed the proposal Tuesday, saying that it “sets our country and its citizens up for failure.”
“Americans deserve a budget that prioritizes their families, their communities and their security. Unfortunately, the House Republican budget fails them at every turn,” Rep. John Yarmuth, D-Ky., said in a statement to Fox News. “It is a total abdication of the responsibility we have to the people we serve, and it should be rejected.”
Here’s a look at some of the key components of the budget.
Defense spending
The House budget increases base defense discretionary spending to $621.5 billion for the fiscal year 2018 with an additional $75 billion “to fight the global war on terrorism,” according to the budget’s blueprint.
The budget resolution also introduced significant resources to border security, homeland security operations and cybersecurity, the budget blueprint states.
GOP HOUSE BUDGET PLAN BOOSTS MILITARY SPENDING, CUTS DOMESTIC PROGRAMS
"A budget is our congressional responsibility."
Additionally, the proposed budget calls for $79 billion in discretionary funding for 2018 and $70.7 billion in advance appropriation funding for the Department of Veterans Affairs – numbers that match Trump’s own proposals, according to the budget’s blueprint.
The proposal seeks to alleviate some problems of the embattled VA through several initiatives, including reducing improper payments and reviewing the Government Accountability Office’s audit of the federal agency.
Black said in an editorial Tuesday that there has been a weakening of the U.S. military in terms of potential and readiness under the Obama administration.
“Our budget seeks to change that dynamic by significantly increasing our spending on national defense so that we can provide our men and women in uniform with the resources they need to face the growing threats around the globe,” Black said.
Medicare
Second only to Social Security, Medicare is one of the largest mandatory programs in the U.S. The plan would cut nearly $500 billion from Medicare.
“Medicare is being reformed. We’re modernizing it,” Black said. “We're not cutting it but reforming it so that it is more cost effective.”
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The changes to Medicare would “save and strengthen” the program, according to the budget, as older Americans would have more control over their health care.
Black said the budget plan includes “premium support” – where the federal government would pay for the program a person chooses through a marketplace. She discredited the idea that this is a “voucher program.”
“One of the most pressing threats to the economic security of Americans is the looming insolvency of popular and invaluable programs that provide health care and retirement guarantees to seniors,” the budget blueprint says. “Without significant reforms to strengthen and preserve it, Medicare faces insolvency in 2029, an unprecedented scenario.”
Trump’s budget proposal left Medicare and Social Security safe from any cuts – in line with promises he made on the campaign trail.
“We can balance the budget without changing [Social Security and Medicare],” Office of Management and Budget director Mick Mulvaney told reporters when unveiling the president’s proposal.
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Mulvaney, who previously served on the House Budget Committee, praised the House proposal on Tuesday, saying that it “follows the leadership of President Trump in Making America Great Again.”
“Critically, this budget lays a pathway for Congress to pass, and President Trump to sign pro-growth tax reform into law,” Mulvaney said.
Rep. Diane Black (R-TN) announces the 2018 budget blueprint during a press conference on Capitol Hill in Washington, U.S., July 18, 2017. REUTERS/Aaron P. Bernstein - RTX3BY3M (REUTERS)
Tax reform
As proposed by House leaders, tax reform would essentially be deficit neutral, which means cuts to tax rates would be mostly "paid for" by closing various tax breaks such as the deduction for state and local taxes.
However, the GOP plan would devote $300 billion claimed from economic growth to the tax reform effort.
The budget resolution provides instructions for reconciliation to promote tax reform aimed at boosting economic growth, according to the blueprint.
“The reconciliation gives us the opportunity to do both tax reform and cut the mandatory spending,” Black said.
In her editorial, she added that reconciliation “paves the way for deficit neutral tax reform that will unleash the American economy.”
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Conservatives want more cuts to so-called mandatory programs, which make up more than two-thirds of the federal budget and basically run on autopilot.
“I just think that if you’re dealing with too many mandatory cuts while you’re dealing with tax reform, you make tax reform that much harder to enact,” Rep. Charlie Dent, R-Pa., said.
As the budget resolution is nonbinding, the Republican-controlled Congress could pass follow-up legislation through the Senate without the threat of a filibuster. GOP leaders hope to use that stipulation when rewriting the tax code.
Improper payments
The GOP budget plans to tackle improper payments through its budget proposal. According to the budget blueprint, the federal government divvied out an estimated $140 billion in improper payments in 2016 – and during the next 10 years that total is expected to rise to $1.4 trillion.
“These are things that are buried that you might not know about that need to be informed and looked at,” Black said.
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The House Budget Committee estimates that Medicare and Medicaid waste the most money on improper payments – with Medicare spending about $59.7 billion and Medicaid spending about $36.3 billion.
The proposal calls for a special commission to monitor and reduce these payments by 50 percent during the next five years. The commission would receive input from both the private sector and experts within the government, such as the GAO.
Welfare programs
The budget blueprint calls for states to manage their own welfare programs and encourage “self-sufficiency,” not “extended dependency” through the programs.
“If America is going to cure poverty and prevent it, anti-poverty programs’ success must be measured by the number of individuals they lift out of poverty, not the number of dollars spent,” the blueprint says.
Among other areas of reform, the budget calls for enforcing work requirements for able-bodied adults without dependents who are on the Supplemental Nutrition Assistance Program (SNAP).
It also requires verifying the income of a person on the Earned Income Tax Credit program before benefits are paid. And those seeking the refundable child tax credit would need to submit a Social Security number for each child before receiving the credit.
The Associated Press contributed to this report.
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