December 21, 2014

House Panel Considers New GOP Budget Plan

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

The House Budget Committee has begun considering a proposed budget that includes many elements of a plan that House Republicans approved last year but also some significant changes.

The Concord Coalition commended Budget Committee Chairman Paul Ryan (R-Wis.), who released the new plan Tuesday, for including proposals to curb health care spending and simplify the tax code. But Concord criticized his deficit reduction numbers for depending on “a broad array of policy choices that are not spelled out and seem unrealistic.”

“We have a major fiscal challenge that cannot be cured by minor tweaks,” said Robert L. Bixby, Concord’s executive director. “Chairman Ryan’s proposal fits the magnitude of the challenge, particularly in suggesting major structural changes in Medicare and Medicaid, which comprise the biggest share of projected federal program costs. These proposed changes will no doubt prove controversial but they should spark a needed debate about the most effective way to control health care costs.”

Ryan’s proposal to shift Medicare to a premium support system had been improved in ways that could draw more bipartisan interest. But Concord says the budget plan’s assumptions for discretionary spending appear unrealistic, both in the short term and longer term, and reflect an unfortunate reluctance to reduce defense spending.

The proposed budget would broaden the tax base while lowering rates, following the lead of bipartisan panels that have recommended reforms to cut back on “tax expenditures,” which are essentially spending programs embedded in the tax code.

While Bixby praised this basic approach to tax reform, he noted that Ryan’s budget fails to specify what tax breaks would be eliminated. To lower tax rates to the budget chairman’s proposed 10 percent and 25 percent brackets, Bixby said, “it is likely that almost all tax expenditures would have to be eliminated.”

The White House and congressional Democrats immediately criticized the Ryan plan. Senate Budget Committee Chairman Kent Conrad raised concerns about the proposed tax cuts for the wealthy and health care spending levels while calling the plan "unbalanced and unfair."

Democrats also complained that Republicans were reneging on a spending agreement that was negotiated last year as part of the Budget Control Act. On Tuesday Conrad announced that he would formally file budget allocations matching the levels that were called for in that law.

Read more with Concord Coalition Commends Paul Ryan for Proposing Major Entitlement and Tax Reform But Key Details Must Be Filled In