House Budget Is Same Old, Same Old

House Budget Committee Chairman Diane Black (R-Ten.) rolled out the GOP’s fiscal year 2018 budget resolution last week entitled “Building a Better America (BBA).”  This budget covers fiscal years 2018 through 2027 and claims to achieve $6.5 trillion in total deficit reductions compared to the Congressional Budget Office spending and revenue baseline for the same period.  

Needless to say, that is a lot of money and these deficit reductions have to come from somewhere.  Either revenues must be increased or spending must be decreased or some combination of the two must occur.  Ms. Black claims that the BBA will produce a balanced budget with a $9 billion surplus in 2027.  That’s a pretty tall order since the CBO baseline projects a $1.4 trillion deficit for that year. 

So how will the BBA accomplish this magic?  As usual Republicans mostly want to cut social welfare programs and taxes.  The bullet points are quotes from their documents:

  • This budget addresses Obamacare by incorporating the House-passed American Health Care Act and all of its savings.

Oh, it assumes the AHCA will become law.  This bill barely passed in the House and it was roundly rejected by Senate Republicans.  Even the milder Senate Obamacare replacement legislation may fail.  Clearly the savings anticipated here are questionable.

  • Reforms Medicaid to ensure the program works best for the most vulnerable and gives states more power to tailor their Medicaid programs to meet the unique needs of their populations.

The Republican’s AHCA would reduce Medicaid funding by $800 billion over the next decade.   Perhaps they should have added:  “Prevents the need for painful medical procedures by eliminating your health care insurance.”  Congressional Republicans can’t sell the Medicaid proposals to their own members let alone the voters.

  • Saves and strengthens Medicare by moving to a premium support system that gives seniors more control of their health care. 

Yep!  This budget transitions Medicare to a system that provides beneficiaries a voucher with which to buy health care policies from insurance companies.  Supposedly there will be an “option” to retain traditional Medicare, but I suspect it will be too expensive for most seniors to afford.  When the public focuses on this proposal, all hell will break loose.

  • Border wall funding is also included in this budget through various Department of Homeland Security construction accounts.

Although this funding is not certain to survive amendments, did anyone doubt Republicans would try to fund the border wall even though it is widely believed to be a waste of money? 

  • This budget gives reconciliation instructions to 11 House committees to achieve at least $203 billion in mandatory savings and reforms (over 10 years). 

Here they are mainly talking about food stamps, housing assistance and other so-called entitlements.  Reductions to these programs will be difficult to achieve, but the House Freedom Caucus wants to cut double this amount. 

  • The resolution also instructs the Ways & Means Committee to produce deficit-neutral (revenue-neutral) tax reform legislation that will reduce tax rates and simplify the tax code to boost economic growth. 

What Republicans are actually talking about is a tax cut for the wealthy, which they always claim will jump start economic growth and create jobs.  But it doesn’t actually work that way.  President George W. Bush cut taxes significantly in 2001 and 2003 and he ended his eight years in office with the Great Recession and the worst job creation record, on record, according to the Wall Street Journal. 

But never mind the facts.  Tax reform is the real purpose of the BBA budget resolution.   It’s the vehicle by which tax legislation can be passed without fear of a Democratic filibuster in the Senate.  Unfortunately for the GOP leadership, this legislation faces tough sledding in the House.  The Freedom Caucus has already signaled that their support requires significantly more spending cuts and funding for the border wall.  They prevented passage of the GOP’s FY 2017 budget resolution in 2016.

  • We estimate that the pro-growth policies of health care reform, tax reform, welfare reform, and deficit reduction assumed in our budget will yield economic growth of 2.6 percent on average over the 10-year budget window, resulting in $1.5 trillion in deficit reduction.

Many economists would say that the BBA depends on a “pie in the sky” growth estimate.  The CBO believes economic growth will be much more modest over the next decade.  Just look at 2017.  Unemployment is low, corporations are quite profitable and still economic growth is less than two percent.

Don’t get me wrong; we need to reduce deficits and control the national debt.  But it must be done by controlling spending AND increasing revenues.  I am confident that Social Security, Medicare and Medicaid costs, which are by far the largest parts of the federal budget, can be much better controlled.  And I believe revenue can be increased while lowering the top tax rates, eliminating deductions and simplifying the tax code.  Both will require focused, bipartisan legislation.

Bipartisan, however, hasn’t been in the GOP lexicon for the past eight years. It’s the same problem they had with health care reform; major legislation must be passed with only Republican votes.  But even radical bills like the AHCA and the BBA fail to meet the far-right standards of Tea Party conservatives.  They haven’t changed since 2010 and neither have the budgets produced by Republicans since they took control of the House in 2011.

 

About eeldav

I am a retired corporate attorney who has lived in both Europe and Asia. While working my responsibilities took me to over 40 countries in Europe, the Middle East, Africa and Asia.
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