President Obama’s status-quo budget includes a nearly $1 trillion spending increase, a $1 trillion tax increase, and record levels of new debt.
WASHINGTON—House Budget Committee Chairman Paul Ryan of Wisconsin issued the following statement in response to President Obama’s FY2014 budget proposal:
“I’m disappointed by the President’s proposal because it merely ratifies the status quo. It doesn’t break new ground; it goes over old ground: It takes more from families to spend more in Washington. And the White House says they never balance the budget. Instead, it raises taxes by $1.1 trillion. It increases spending by $964 billion. And it adds $8.2 trillion to our debt.
“Both sides have put plans on the table. And there are many differences between them. The President and Senate Democrats believe Washington knows better, so their plan puts more power in its hands. By defending the status quo, they’re letting critical programs like Medicare wither on their watch. They’re cementing record poverty and high unemployment into place.
“We’re offering a different approach. We don’t want to regulate people’s lives even more. We want to improve them. Our plan balances the budget in ten years to foster a healthier economy and to help create jobs. Our plan expands opportunity for the young. It guarantees a secure retirement for seniors. And it repairs the safety net for those in need.
“In the next few weeks, we’ll work to find common ground and to move the debate forward. Even if we can’t agree on everything, we need to make a down payment on our debt—now. We can start with common-sense reforms to strengthen entitlements and revenue-neutral tax reform.
“The President’s budget is such a disappointment because it’s a missed opportunity. We need a new approach to meet our generation’s most pressing challenges. I hope the other side will join us in proposing real reforms. But until then, we need to take steps in the right direction. I am hopeful we will.”
Key facts from the President’s fiscal year 2014 budget:
Their Budget Never Balances—Ever
- The House budget balances in ten years, but, like Senate Democrats, the White House says their budget never balances—ever.
$8.2 Trillion in New Debt
- Accounting for the cost of eliminating the sequester and removing the budget gimmicks, net deficit reduction is only $119 billion.
- Additional deficit increase in FY2013: $61 billion
- Total U.S. debt in 2023: $25.4 trillion
- Debt increase per household: $60,980
- Interest payments on the debt in 2023: $763 billion
- Deficit in 2023: $439 billion
$1.1 Trillion in New Taxes
- President Obama’s budget increases taxes by $1.1 trillion—on top of $1 trillion in taxes from Obamacare and more than $600 billion from the President’s recent tax hike.
$964 Billion in New Spending above Projected Growth
- Spending increase next year alone: $154 billion
- Additional spending in FY2013: $61 billion
- Total spending over ten years: $46.5 trillion
- Rate of annual increase in mandatory spending: 5.2%
The Budget Grows the Government at the Expense of the Economy
President Obama’s budget takes more from hardworking families to spend more in Washington, D.C. Instead of empowering people with more control over their lives, the President’s plan empowers bureaucracy. Instead of creating good-paying American jobs, the President’s plan destroys jobs, depresses wages, and diminishes opportunity.
Republicans are offering a different path. Our plan to balance the budget will end the waste of taxpayer dollars and foster a healthier economy, delivering real solutions to help improve people’s lives.
Spending Daily | March 21, 2013
Bill to Avert Government Shutdown Gives More Flexibility in Sequester Cuts
Reuters, “The Senate on Wednesday approved legislation to avert a government shutdown next week, freeing Democrats and Republicans to spend the next few months arguing over deeply divided strategies to shrink longer-term budget deficits. The bill, which would keep government agencies and programs funded through the end of the fiscal year on September 30, must go back to the House of Representative for final approval on Thursday. House Appropriations Committee Chairman HalRogers said he was pleased with the bill and believes it can pass the Republican-controlled House. ‘It’s a great success,’ Rogers told reporters. He called the effort a ‘healthy start’ toward returning to a normal, bipartisan budgeting process. The measure, approved by a 73-26 vote, keeps in place $85 billion in automatic spending cuts, but it offers the military and some domestic agencies more flexibility to shift funds within these reduced budgets to higher-priority programs. … Without new government spending legislation enacted by March 27, federal agencies and discretionary programs ranging from the Department of Transportation to national parks would have faced a shutdown.”
“Paul Light: The Sequester Is an Overhaul Opportunity”
Paul Light editorializes in The Wall Street Journal, “With the advent of the trillion-dollar budget sequester two weeks ago, many Americans assumed that the government’s motley collection of furloughs, freezes and poorly planned cuts would result in even worse performance by the federal bureaucracy than they’ve come to expect. Congress and the president can make all the grand promises they wish, but Americans have almost no confidence that the bureaucracy will deliver their money’s worth.Yet the sequester has given Congress and President Obama a once-in-a-generationopportunity to close this ‘implementation gap’ and rebuild trust in government. They can do so by setting targets for the most aggressive bureaucratic overhaul since former President Herbert Hoover took the helm of a blue-ribbon commission in 1947 that streamlined or consolidated dozens of agencies and cut layers of fat between the top and bottom of the federal government. … Federal employees know that the system needs an overhaul. According to the government’s own 2012 survey of almost 700,000 employees, barely a third believe that promotions are based on merit. Fewer said steps are taken to deal with poor performers. Just one-fifth said pay raises are linked to performance. … Saving money through an amended sequester should not be an excuse for continuing wasteful domestic or military programs, discretionary or mandatory. Rather, saving money should be viewed as the product of continuous bureaucratic improvement.”
“The War Over ‘Balanced’”
POLITICO reports, “Washington’s budget writers are waging war over a single word: ‘balanced.’ House Budget Committee Chairman Paul Ryan (R-Wis.) calls his new fiscal blueprint a ‘balanced plan.’ Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said Wednesday that her version is a ‘truly balanced approach.’ Republicans are touting internal polling that suggests Ryan’s balanced budget will play well in competitive districts. But Democrats are confident that their approach will prove more popular because it was road-tested by President Barack Obama when he won re-election last fall. It’s hardly a new fight, but action on the House and Senate budgets this week has raised the stakes over whose version of balance is the right course for thenation. … Republicans are playing catch-up with Obama, who framed his ‘balanced approach’ formulation during the 2011 debt-limit debate and rode it straight through the election last fall. And they recognize that — as Obama would say — words matter.”
House GOP Looks to Pass Ryan Budget Blueprint
The Hill reports, “Republican leaders are poised to pass Rep. Paul Ryan’s (R-Wis.) budget on Thursday, having convinced centrists and conservatives to back the blueprint that Democrats believe is their road map back to the House majority. As of late Wednesday, only three Republicans had publicly said they intend to vote against the Ryan plan, while 33 House GOP lawmakers were undecided or declined to comment, according to a whip count conducted by The Hill. Among the undecided lawmakers, several noted they would probably support the measure. … Ryan had floated changing some Medicare provisions in his new budget, but backtracked when centrists balked. … Despite conservative support for Ryan’s budget plan, some lawmakers worried that their leadership won’t offer the follow-up legislation to make good on the ideas put forth in the blueprint. A group of fiscal hard-liners is eyeing the next battle over raising the debt ceiling as an opportunity to enact reforms to entitlement programs that would begin the path to balance laid out in Ryan’s plan.”
Chen: Republicans Should Focus on Deficit-Reducing Changes to ACA
Lanhee Chen, former policy director for the Romney campaign and senior official at the Department of Health and Human Services under the Bush administration writes in Bloomberg, “Calculations based on a recent report by the nonpartisan Government Accountability Office show that the Affordable Care Act could add $6.2 trillion to U.S. deficits over the next 75 years. … And the GAO report is hardly an outlier: It notes that other nonpartisan sources, including the Congressional Budget Office, have questioned the assumption that the Affordable Care Act’s cost-containment mechanisms are sustainable. All this is cause for concern and a reason to overturn the law. But let’s be realistic: Full repeal isn’t happening as long as Democrats control the White House and Senate. So Republicans should focus instead on deficit-reducing changes that Obama and congressional Democrats might actually consider.”
“About That ‘Scalpel’”
The Wall Street Journal editorializes, “President Obama often claims he wants to cut the budget smartly, using a ‘scalpel’—not a meat axe, machete, cleaver or chainsaw, to list a few of his favorite metaphors. He’ll need a more inspired term to describe what he’s now doing to Medicare Advantage, perhaps napalm or WMD. The Affordable Care Act drained $306 billion from this growing version of Medicare that 29% of seniors use to escape the traditional entitlement and obtain modern private insurance, but the Administration is imposing the cuts in ways that are even more harmful than the law requires. The post-election timing is no accident. In 2012 only 4% of the Medicare Advantage cuts were scheduled under the law, but the folks who run Medicare at the Health and Human Services Department improvised a $3.8 billion nationwide ‘demonstration project’ that paid bonus subsidies to Medicare Advantage insurers to improve quality. The project couldn’t demonstrate anything because the payments went to 90% of insurers regardless of quality, but they did cancel out most of the 2012 cuts. That did the trick for voters in Scottsdale or Boca Raton who might have noticed higher costs or lost the coverage they have and prefer. Federal auditors suggested the project was illegal, but in any case it is now winding down and HHS is making up for lost time.”
Senate Passes Spending Measure But Partisan Divide Continues
The New York Times reports, “The Senate passed a spending measure on Wednesday to keep the government financed through the end of September, resolving one contentious budget fight as Congress moved quickly to the next. While the Senate dealt with the most immediate financial concerns, the House of Representatives engaged in an animated debate over the budget for the 2014 fiscal year that begins when the spending measure expires Sept. 30. … It was a day when members took to the microphones on the floor to make excessively partisan sound bites that seemed scripted for campaign commercials. Each side staged its own moments of political theater, forcing and casting votes designed to embarrass the other.”
Euro-Zone in Crisis Again After Cyprus Debacle
The Washington Post editorializes, “Could a full-blown European financial crisis begin in tiny Cyprus, with a population of just more than 1 million and a gross domestic product of only $23.6 billion? The idea is only slightly stranger than the notion that this Mediterranean offshore-banking center, partially occupied by Turkey since 1974, belonged in a currency union with Germany in the first place. But Europe’s leaders, in their wisdom, let Cyprus join the euro zone in 2008, and now the future of a continent hinges on bailing out the island and its insolvent banks. European policymakers, led by Chancellor Angela Merkel’s German government, have made a hash of things so far. Cyprus needs to recapitalize its financial system, which is badly damaged by exposure to the sovereign debt of neighboring Greece. The International Monetary Fund (IMF) and E.U. governments agreed to lend $13 billion of the necessary funds, in return for the usual austerity and a contribution of $7.5 billion from the Cypriot government. … For the Cypriot government, however, taxing fat cats risked alienating Russian Prime Minister Vladimir Putin, whose government Cyprus already owes $3.3 billion for a previous bailout.”
(WASHINGTON D.C.) — Last week when House Budget Committee Chairman Paul Ryan released his budget plan, the Washington Post tried to encapsulate the document in one single chart – “The Ryan Budget, in One Chart” – which shows the percentage change relative to the CBO baseline, illustrating a steep decline in “Medicaid/Other Health” spending. But does Rep. Paul Ryan’s budget really impose “draconian cuts?”
Go beyond the headlines and things look very different. The Independent Women’s Forum dug into the numbers to show a different perspective of what the Ryan Budget really looks like. IWF compared outlays in Social Security, Medicare, Medicaid and ObamaCare under current policy projections to those under the Ryan proposal. Under the Ryan budget, spending still rises in every category (except ObamaCare, which Ryan would keep flat at zero). Outlays are still going up, but in Washington, Democrats call these “draconian cuts.”
Side-by-side charts: Washington Post chart (left) and Independent Women’s Forum chart (right)
Hadley Heath, senior policy analyst at the Independent Women’s Forum said, “We can see that Ryan’s changes, when considered in light of the larger fiscal picture of our entitlements, aren’t draconian. They’re sensible.” She continued, “In the past, Ryan has been criticized by fiscal conservatives for not balancing the budget fast enough. And as we’ve seen during the recent hysteria over Sequestration, politicos on the Left are ready to demagogue and scare-monger over even the slightest cuts. Ryan’s plan won’t be the end of the world; it is a good compromise that puts us on a path to fiscal sanity.”
Independent Women’s Forum is a non-partisan, 501(c)(3) research and educational institution dedicated to expanding the conservative coalition, both by increasing the number of women who understand and value the benefits of limited government, personal liberty, and free markets, and by countering those who seek to ever expand government in the name of protecting women.
Spending Daily | March 13, 2013
Video: “Obama: ‘No,’ My Budget Won’t Be Balanced”
In and ABC News interview, President Obama said his budget would not be balanced. Watch the video from The Washington Free Beacon here.
Obama’s Budget Coming Week of April 8, More Than Two Months Late
Bloomberg reports, “President Barack Obama will send his fiscal 2014 budget to Congress the week of April 8, an administration official said today, more than two months late. The president’s spending blueprint was due on Feb. 4. The administration said last month that the debate over taxes and spending at the end of last year, combined with across-the-board spending cuts that kicked in March 1, would delay its release. … The president has said he’s planning to again seek many of the same proposals for spending and for deficit reduction that were contained in last year’s $3.8 trillion budget, which was never adopted by Congress.”
Poll: Obama Approval Down on Handling of Economy
According to The Washington Post, “The afterglow of President Obama’s reelection and inauguration appears to have vanished as increasingly negative views among Americans about his stewardship of the economy have forced his public approval rating back down to the 50 percent mark, according to a new Washington Post-ABC News poll. In December, just after he won a second term, Obama held an 18-percentage-point advantage over congressional Republicans on the question of whom the public trusted more to deal with the economy. Now, it’s a far more even split — 44 percent to 40 percent, with a slight edge for the president — but the share of those saying they have confidence in ‘neither’ has ticked up into double digits. The poll contains ample evidence of the disillusionment voters feel toward both sides amid a sense of continuing dysfunction in Washington, which since December has been grappling with fiscal crises and deadlines of its own making.”
Republicans, Democrats Present “Clashing Budgets”
The Hill reports, “House Republicans and Senate Democrats unveiled clashing budgets Tuesday that highlight the ideological chasm between the two parties on taxes, spending and the size of government. The plan from Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, would slice spending by $5.7 trillion, cut the top tax rate to 25 percent and balance the budget in 10 years. Its Democratic counterpart, from Senate Budget Committee Chairwoman Patty Murray (Wash.), raises nearly $1 trillion in new taxes, adds new stimulus spending and does not project any date at which balance will be reached.”
Budget Comparison: “Apples to Bicycles”
David Nather writes in POLITICO, “Democrats and Republicans have put together their dream budgets — political documents that are more like wish lists than usable road maps for the future of government spending. Both have no chance of becoming law, but they do help explain the impasse over spending and debt in Washington. The two plans — one by Republican Paul Ryan and the other by Democrat Patty Murray — aren’t even apples and oranges. They’re more like apples and bicycles. Ryan’s budget shoots to balance the budget in 10 years by slashing health care spending. Murray’s plan, which Democrats outlined in bare-bones form Tuesday, seeks to lower deficits by raising $1 trillion in new revenues and leaving out big entitlement changes but doesn’t take on balancing the budget.”
Senate Dems Clash With Obama on Entitlements
The Hill reports, “Liberal Democrats challenged President Obama on Tuesday over his willingness to cut Social Security benefits. Sen. Tom Harkin (D-Iowa) said he and Sen. Bernie Sanders (I-Vt.), among others, challenged Obama on the so-called ‘chained CPI’ — a change in the way Social Security benefits are calculated. Obama has said he is open to chained CPI as part of a ’grand bargain’ that would include spending cuts as well as new revenue. And he didn’t back down from that support during a closed-door meeting with Senate Democrats, despite pushback from Harkin and Sanders. Harkin said the message from Obama was ‘basically, things are open for negotiation’ in pursuit of a grand bargain. ‘The president sort of talked about being willing to make some changes here so we can improve someother things over here’ when Sanders raised the issue, Harkin told reporters. In previous efforts to negotiate a grand bargain with House Republicans, Obama had supported raising the Medicare eligibility age. The White House has since said that Obama would not support that proposal. Harkin said Obama didn’t explicitly rule out raising the Medicare age, but implied that the policy has fallen out of favor. ‘I didn’t hear a commitment, but I spoke about that,’ Harkin said. ‘He didn’t make a commitment, but he seemed to indicate that yes, there are other ways of solving the entitlement problem without doing that.’”
“Obama Tells Democrats They Must Be Open to Entitlement Changes”
Bloomberg reports, “President Barack Obama told Senate Democrats that they should be open to changes in entitlement programs to achieve a long-term budget deal, according to several lawmakers who attended a meeting with him on Capitol Hill today. Iowa Senator Tom Harkin said Obama told Democrats during the 90-minute meeting that he wanted a broad, bipartisan deficit-reduction deal this year. Harkin said Obama rebuffed his demand, joined by Vermont Senator Bernie Sanders, for an assurance that Medicare and Social Security benefits would be remain untouched in any ‘grand bargain’ agreement.”
In Talk With Dems, Obama Stands Firm
The Hill reports, “Obama stood firm Tuesday when pressed to back away from benefit cuts during the meeting with the Senate Democratic Conference, according to lawmakers who attended. Democrats emerged from the Senate’s Mike Mansfield Room publicly declaring party unity. … ‘Most of the conversation I caught was on Social Security,’ Sen. Chris Murphy (D-Conn.) said, describing the back-and-forth on entitlement reform. ‘He’s been clear in the past that he’s willing to take a look at some aspects of Social Security.’ Some Democrats pressed Obama to back away from benefit cuts and instead support tax increases as the sole solution for prolonging the program’s solvency. Obama had discussed entitlement reform with a dozen Senate Republicans over a private dinner last week. ‘I urged him not to cut Social Security and benefits for disabled veterans,” said Sen. Bernie Sanders (Vt.), an independent who caucuses with Democrats. ‘He is concerned about the long-term solvency of Social Security and so am I. But I think he recognized there are different ways to approach it. You can bring more revenue into the program or you can cut benefits.’”
“Defense officials press Congress for budget flexibility”
Reuters reports, “Senior defense officials said on Tuesday they were doing their best to offset the worst impacts of $46 billion in budget cuts that began this month, but they will have to slash personnel and weapons programs if reductions keep coming in future years. Deputy Defense Secretary Ashton Carter told a conference of industry officials that the Pentagon was facing a ‘double absurdity’ of having to implement across-the-board budget cuts generally seen as bad policy while being funded for last year’s spending levels and priorities. … The department is also being squeezed by financial constraints imposed by the legislative mechanism Congress used to fund the government through March 27. Unable to reach a budget deal, they passed a resolution that extended funding based on last year’s spending and priorities. As a result, the Pentagon has more money for weapons programs than it requested but is facing a multibillion-dollar shortfall for operations and maintenance. Pentagon officials are urging Congress to give them an appropriation that would shift the funding into the right accounts for this year’s priorities.”
Debt Ceiling Crisis Still Ahead After Spending Fight
Roll Call reports, “Conservatives are privately debating how much space to give House leaders to follow through on promises made at their Williamsburg, Va., retreat in January, with a wait-and-see approach embraced by key veterans and a smaller movement of mostly newer lawmakers wanting to push leadership harder. The divide is behind the mixed signals in the past week as Republicans provided a surprisingly unified vote on the continuing resolution followed quickly by bold threats by conservatives to bring down rule votes. The debate has big implications for how Republicans will approach future spending showdowns such as the next debt ceiling increase and shows there are rumblings beneath the surface during a period of relative tranquility for the GOP conference.”
Ryan Budget Includes Defense Spending Caps
The Wall Street Journal reports, “Rep. Paul Ryan proposed a Republican budget blueprint Tuesday that included caps on defense spending, a shift for his party that could provide a point of compromise with Democrats. The House Budget Committee chairman’s proposal marks a significant reversal for the GOP since just last fall. Mitt Romney, the party’s 2012 presidential nominee, who made Mr. Ryan his running mate, campaigned on a plan to markedly increase the Pentagon budget, saying it should represent no less than 4% of gross domestic product. Mr. Ryan’s budget calls for $560.2 billion in defense spending in 2014, roughly $100 billion less than the 4% formula. Over 10 years, he would spend at least $2.3 trillion less on defense than he and Mr. Romney advocated. The defense proposal was a rare development on a day when House Republicans and Senate Democrats displayed deep policy differences as they released portions of their budget proposals for the next fiscal year, which starts in October.”
Feds Under Pressure From Business Groups to Explore Cost of Regulation
The Hill reports, “Federal agencies are under mounting pressure from business groups to run rigorous economic tests before handing down regulations. As the focus in Washington shifts focus from legislation to regulation in President Obama’s second term, the private sector is calling for strengthened requirements on agencies to measure the costs and benefits of new rules. A study issued Tuesday by the U.S. Chamber of Commerce, for example, urged regulators to adopt ‘rigorous cost-benefit analysis to arrive at more rational decision-making,’ especially as they consider the hundreds of rules required by the Dodd-Frank financial reform law. ‘This is 400 rules happening at once across 20 agencies,’ David Hirschmann, president of the Chamber’s Center for Capital Markets Competitiveness, said of Dodd-Frank. … But consumer groups argue that the federal government already relies too heavily on the guesswork of economic analysis. They say it is often easier to document costs of new rules than less tangible benefits such as improved quality of life. Flawed economic projections, they argue, are gumming up the works for urgently needed rules to protect public safety and health.Matters could get worse if economic considerations become more firmly embedded into rule-making decisions, they contend.”
At first look, the budget unveiled today by House Budget Committee Chairman Paul D. Ryan (R-WI) advances much-needed reforms and importantly accomplishes the crucial goal of balancing the budget within the decade, though this is partially on the coattails of Obama’s tax increases. Not a silver bullet, it is more of a stasis budget, rather than a bolder plan that builds on the reforms of previous years.
There are six things that each budget from the House, Senate, and President should accomplish. These are laid out in the Heritage plan, Saving the American Dream, which:
- Balances the budget in less than 10 years, without raising taxes, and keeps the budget in balance thereafter;
- Swiftly overhauls entitlement programs, including Social Security, to guarantee economic security to seniors while making the programs affordable;
- Repeals Obamacare in its entirety;
- Fully funds defense;
- Rolls back discretionary spending; and
- Rolls back recent tax increases with a sweeping, growth-oriented tax reform plan and caps taxes at the historical average of 18.5 percent.
Here’s how, at first blush, the Ryan plan measures up:
Gets to Balance. The Ryan budget achieves an important improvement over last year by balancing the budget within 10 years. The President’s budgets have never even attempted this, and given the Senate’s rusty skills in budget writing, it’s unlikely they would choose this course, either. The Ryan budget slows the growth of spending to about 3.4 percent per year, compared to roughly 5 percent today, with about $5 trillion less spending.
But, regrettably, Ryan’s budget also relies on Obama’s $618 billion fiscal cliff tax increase and Obamacare’s $1 trillion in tax hikes (more on this next) to get to balance. This means that tax levels rise almost immediately to 19.1 percent of GDP, well over the 18.5 percent benchmark. Balance is important, but so is the size of government. Without the tax increase, this budget would have had to have been more assertive in attacking spending and reforming entitlements to achieve and sustain balance.
And while the intent, we are told, is to stay in balance in the coming years and decades, regrettably, as the Congressional Budget Office (CBO) has not updated its long-term model yet, there is no CBO scoring to say how or whether this happens.
Repeals Obamacare Spending, But Keeps the Taxes. The vital organs of Obamacare—the insurance exchange subsidies and Medicaid expansions—are scheduled to start next year. Ryan’s budget takes the correct and necessary step of repealing them. But, as noted above, perhaps the biggest shortcoming of this budget is that it keeps the tax increases associated with Obamacare. These tax hikes are the oxygen that fuels the fire of ever bigger spending. But the entire fire needs to be put out—all of Obamacare should be repealed, including its tax hikes.
Defense Funding Levels Mixed. Like last year, the Ryan budget protects defense from the eviscerating sequestration cuts. This is sound. As North Korea’s posturing shows, the world is not a safer place today. But the national defense budget has been squeezed by Obama’s reductions just when U.S. forces need replenishment and modernization. Ryan’s budget essentially adopts the defense spending caps in the Budget Control Act without sequestration. This is better than the President’s plainly inadequate funding for current and future needs, and certainly better than the sequester, but still less than what is required.
Entitlement Reforms; More Needed. Ryan continues to be a strong leader here, tackling Medicare’s abject failures head on. His signature solution of a premium support model for Medicare is the hallmark of his budget. Moving to a patient-centered model would free retirees from relying on the unstable and unsustainable government-run Medicare program and restrain costs through the competition rather than price-fixing. The sooner this transition is made, the better.
But the transition is too slow, as it once again exempts those over 55 from these changes to Medicare. Our spending problem is so severe that all Americans should be part of the solution. While this “grandfather” clause is understandable, most Americans this age will have more than a decade remaining in their working lives. We cannot continue to keep leaving one more year of the baby boomer generation out of the solution because Washington fails to act.
Though the budget takes the first step on by turning Medicaid into a block grant, more important is to move the mainstream Medicaid population into private insurance.
And discouragingly, like last year, there is no Social Security reform at all. This is especially disappointing, given the current discussions of commonsense, simple reforms like increasing the retirement age or moving to a more accurate measure of inflation like chained CPI.
Reduces Non-Defense Discretionary Spending. By extending the Budget Control Act spending caps for two years and keeping sequestration levels, the Ryan budget makes strong reductions to this spending. It also assumes some worthy and long overdue reforms, such as consolidating the federal government’s 49 job training programs, many of which are ineffective, and first steps at reining in farm subsidies.
Growth-Oriented Tax Reform. The Ryan budget lays out important principles for tax reform and rightly rejects closing tax preferences (“loopholes”) just to raise revenue. True tax reform is revenue neutral: Any revenue raised by eliminating tax preferences should be offset by lowering tax rates. The budget sets the same, pro-growth goals for fewer, lower rates and territoriality as last year.
Bottom Line: The Ryan budget delivers on its new promise this year—to balance the budget within the decade. Unfortunately, it does use higher taxes to help achieve this. It maintains Ryan’s signature reform to Medicare, which will go far toward reining in unaffordable entitlement spending.
Though more could be done along the lines of Saving the American Dream to advance bolder entitlement reforms and to throw off the yoke of Obama’s tax hikes, this budget takes first steps toward reining in spending and reforming entitlements. And if preliminary news reports are to believed, this plan is sure to be far superior to the Senate’s version now awaiting its finishing touches replete with still more tax increases, spending and looming deficits.
WASHINGTON—Today, House Budget Committee Chairman Paul Ryan of Wisconsin and Committee Republicans released their plan to balance the budget in ten years. It is a responsible plan to cut spending, reform government, and foster a healthier economy. It provides economic security for families, repairs the safety net for the poor, strengthens retirement for seniors, and expands opportunity for all.
The Fiscal Year 2014 budget will be formally unveiled at 10:30 AM ET today. To watch Chairman Ryan and Budget Committee Republicans discuss their plan, tune in here.
Writing in today’s Wall Street Journal, Chairman Ryan makes the case that we need to stop spending money we don’t have. Ryan writes: “Yet the most important question isn’t how we balance the budget. It’s why. A budget is a means to an end, and the end isn’t a neat and tidy spreadsheet. It’s the well-being of all Americans. By giving families stability and protecting them from tax hikes, our budget will promote a healthier economy and help create jobs. Most important, our budget will reignite the American Dream, the idea that anyone can make it in this country.”
Read the full op-ed here.
For additional budget resources and the latest news, please visit budget.house.gov.
WASHINGTON — The House Republican and Democratic leaders generally get a fair amount of leeway in their remarks on the House floor, but Rep. Andy Harris (R-Md.) thought Minority Leader Nancy Pelosi (D-Calif.) stepped over the line when she thanked Rep. Chris Van Hollen for his work on the budget Tuesday.
Van Hollen, the top Democrat on the Budget Committee and a fellow member of Harris’ Maryland congressional delegation, had been trying to offer a Democratic plan to replace the sequestration budget cuts, to no avail.
When Pelosi, a former speaker of the House, thanked him for his work, Harris, a second-term tea party favorite who was presiding over the chamber, scolded her for turning to Van Hollen and using his name in a technical breach of decorum.
“The minority leader is reminded to address the remarks to the chair,” Harris said, prompting a chuckle of disbelief from Pelosi.
The growing national debt demands immediate attention and real solutions from America’s elected leadership.
That was the message delivered yesterday by a group of young Americans at a press conference with House Budget Committee Chairman Paul Ryan (R-WI) and Representative Cathy McMorris Rodgers (R-WA).
“The greatest dysfunction of all is the fact that these young people standing here are facing a diminished future, no matter how you slice it,” said Ryan. “This isn’t a Republican issue. It’s not a Democrat issue. It’s a math issue.”
“Sixteen trillion dollars is a huge number, and individually, if you do the math, each of us are over a hundred thousand dollars in debt,” said Sohaani Perera, an attendee from College Park,Maryland.
“I’ve never even seen that much money in my life, and the idea of being that much in debt for something I’m not even responsible for – I feel penalized, and so does the rest of my generation,” she said.
Representatives Adam Kinzinger (R-IL) and Aaron Schock (R-IL) also spoke at the press conference, which was sponsored by the House Republican Conference, chaired by McMorris Rogers.
“I think it’s unfair of us now to ask that once [young people] become—once they have families, once they’re out in the workplace, that we ask them to bear the national debt because of our out-of-control spending,” said Kinzinger.
Other students worried about whether or not the entitlements they are paying for would be there when they retired.
“My other concerns are that when I do reach the age where I will be able to collect Medicare and Medicaid, that it’s not going to be there,” said Katelyn Williams of Hempstead, New York.
That’s right. Without real reforms, these programs will not be there for these students. They must be reformed.
The debt issue is one of basic responsibility, said John Pendleton ofRichmond,Virginia.
“I feel like I’ve been fiscally responsibly in saving money, so I expect the government to do the same,” he said.
The President and Senate Democrats need to get serious about spending.
WASHINGTON—The Congressional Budget Office released its Budget and Economic Outlook, which projected an $845 billion deficit for fiscal year 2013. In response, House Budget Committee Chairman Paul Ryan of Wisconsin issued the following statement:
“The CBO’s report is yet another warning that we need to get spending under control. The deficit is still unsustainable. By 2023, our national debt will hit $26 trillion. We can’t let that happen. We need to budget responsibly, so we can keep our commitments and expand opportunity.
“Unfortunately, the President has yet to produce a budget—in violation of federal law. And Senate Democrats haven’t passed a budget in nearly four years.
“This isn’t a partisan issue. It’s math. Unless the President and the Senate offer a credible plan to close the deficit, we will have a debt crisis—and the country will suffer.
“House Republicans have offered their solutions. Now the President and Senate Democrats must do the same.”
CBO’s Key Findings
- The CBO projects an $845 billion deficit for fiscal year 2013.
- In 2023, the federal government will collect twice as much revenue as it did in 2012. Even so, the deficit will hit $978 billion.
- The CBO projects the total debt will rise by $10 trillion by the end of the budget window (debt held by the public will rise by $8.7 trillion). By 2023, total debt will equal $26 trillion.
WASHINGTON—Earlier today, House Republicans announced a path forward on the nation’s near-term budget challenges. The 1974 Congressional Budget Act requires passage of a budget resolution by April 15 each year. Under Senator Harry Reid’s leadership, the Senate has refused to pass a budget for 1,360 days. As the Administration and Congress work through opportunities to cut government spending, there will be no consideration of a long-term debt-ceiling increase unless both the House and the Senate pass a long-term budget plan. The plan also includes a bipartisan proposal to withhold Senators’ salaries if they fail to pass a budget.
In response to the plan outlined by House Republican leaders, House Budget Committee Chairman Paul Ryan issued the following statement:
“I stand in strong support of the agreement reached by my colleagues today. Our conference has united around a common-sense proposal. It rests on the recognition that our challenge is twofold: We have to pay our bills today, and we have to make sure we can pay our bills tomorrow. To achieve both ends, we must cut spending and budget responsibly.
“Since taking the majority, House Republicans have done their job. We’ve passed a budget that promotes economic growth and gets spending under control. But for nearly four years, Senate Democrats have refused to pass a budget. Today’s agreement will hold the Senate accountable for this legal and moral failure. Just as April 15 is tax day for American families, it is budget day for Congress. Unless the Senate acts, there will be no consideration of a long-term debt-ceiling increase. I look forward to working with my colleagues—in both houses and in both parties—on this vital issue.”