House GOP unveils budget plan
It would cut social benefits, lay ground for tax code revamp
WASHINGTON — Despite opposition from Republican moderates and conservatives, House leaders are pressing ahead with a budget plan whose success is critical to the party’s hopes to deliver on one of President Donald Trump’s top priorities: a GOP-only effort to overhaul the tax code.
The importance of the measure has been magnified by the cratering in the Senate of the Trump-backed effort to repeal President Barack Obama’s health care law, leaving a rewrite of the tax code as the best chance for Trump to score a major legislative win this year. The measure would require about $200 billion worth of cuts to benefit programs and other so-called mandatory spending coupled with the tax plan.
The House budget plan unveiled Tuesday is crucial because its passage would pave the way to pass a tax overhaul this fall without the fear of a filibuster by Senate Democrats.
But it also proposes trillions of dollars in cuts to the social safety net and other domestic programs and puts congressional Republicans at odds with Trump over cutting Medicare. It also would sharply boost military spending.
“In past years, the budget has only been a vision. But now, with the Republican Congress and a Republican White House, this budget is a plan for action,” said House Budget Committee Chairman Diane Black, R-Tenn. “Now is our moment to achieve real results.”
Mick Mulvaney, White House budget director, praised the outline.
“The administration urges the House Budget Committee, the full House and the Senate to move forward on a pro-growth budget resolution that supports the administration’s goals of a strong national defense, fiscal responsibility and sustained economic growth,” Mulvaney said.
Un cl e a r, however, is whether GOP leaders can get the budget measure through the House. Conservatives want a larger package of spending cuts to accompany this fall’s tax overhaul bill, while moderates are concerned that cuts to programs such as food stamps could go too far.
“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,” said Rep. Charlie Dent, R-Pa.
Members of the hard-right House Freedom Caucus, meanwhile, have been pushing for more aggressive longterm spending cuts in reconciliation. The group’s leader, Rep. Mark Meadows, R-N.C., told reporters last week that the numbers in the draft budget could not pass the House, calling the proposed $203 billion in mandatory spending cuts over the coming decade a relative pittance in a federal budget that already approaches $4 trillion in yearly spending.
Conservatives are also pushing House GOP leaders for more specificity on the tax overhaul bill — in particular, an assurance that a proposal to tax imported goods known as border adjustment will not be included.
Black announced a committee vote for today, but was less confident of a vote by the entire House next week; a delay, he said, seems likely because of the ongoing quarrel between the GOP’s factions.
The House GOP plan proposes turning Medicare into a voucherlike program in which future retirees would receive a fixed benefit to purchase health insurance on the open market. Republicans have proposed the idea each year since taking back the House in 2011, but they’ve never tried to implement it.
“Republicans would destroy the Medicare guarantee for our seniors and inflict bone-deep cuts to Medicaid that would devastate veterans, seniors with long-term care needs, and rural communities,” countered Democratic leader Nancy Pelosi of California.
The plan promises to balance the budget through deep and wide-ranging cuts. It calls for turning this year’s projected $700 billion deficit into a $9 billion surplus by 2027. It would do so by slashing $5.4 trillion in spending over the coming decade, including almost $500 billion from Medicare and $1.5 trillion from Medicaid and the Obama-era health law, along with sweeping cuts to benefits such as federal employee pensions, food stamps and tax credits for the working poor.
But in the immediate future, the GOP measure would add almost $ 30 billion to Trump’s $668 billion request for national defense. The GOP budget plan would cut non-defense agencies by $5 billion. And of the more than $4 trillion in promised savings from mandatory programs such as Medicare and Medicaid, the plan assumes just $203 billion would actually pass this year.
Democrats focused their fire on the plan’s sweeping promises to cut from almost every corner of the budget other than Social Security, defense and veterans programs. At the same time, they have little fear those cuts would actually be implemented.
Top Budget Committee Democrat John Yarmuth of Kentucky told reporters that the GOP “utilizes a lot of gimmicks and vagueness to reach some semblance of theoretical balance and also hides a lot of the draconian cuts [that] would be inflicted on the American people.”
All told, the GOP plan would spend about $67 billion more in the upcoming annual appropriations bills than would be allowed under spending limits set by a 2011 budget and debt agreement. It raises war accounts by $10 billion. And, like Trump’s budget, the House GOP plan assumes rosy economic projections that would erase another $1.5 trillion from the deficit over 10 years.
The budget resolution is nonbinding. It would allow Republicans controlling Congress to pass follow-up legislation through the Senate without the threat of a filibuster by Democrats. GOP leaders and the White House plan to use that measure to rewrite the tax code.
As proposed by House leaders, the tax overhaul would be deficit- neutral, which means cuts to tax rates would be mostly compensated 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 overhaul effort.
But conservatives are insisting on adding cuts to socalled mandatory programs, which make up more than two-thirds of the federal budget and basically run on autopilot.