House Democrats released a proposed 10-year budget Monday that would protect non-defense spending from steep cuts but cause federal deficits to rise for several years in the coming decade.
Relative to the Congressional Budget Office baseline, it would reduce deficits by $1.8 trillion, mostly from higher revenues. The debt-to-GDP ratio would remain above 70 percent throughout the period.
The proposal follows the unveiling last week of the House Republicans’ budget plan.
Both sides in the House deserve credit for proposing 10-year budgets when it would have been easier in an election year to go no further than the two-year appropriations cap agreement reached in December.
Unfortunately, the Senate Budget Committee has no plans to draft a budget resolution this year. As a result, there will be no concurrent congressional budget resolution and no prospect of an agreed-upon fiscal plan that looks out beyond 2015.
Under their plan, the House Democrats say, the deficit would be growing more slowly than the economy at the end of the 10-year “window” for budget estimates. However, deficits would be significantly higher in several earlier years, hitting 3.1 percent of GDP in 2021 and 2022 before ostensibly dropping to 2.3 percent by 2024.
The Democrats’ budget suggests extending long-term unemployment compensation, which expired in December, for a full year. The Senate, however, voted 59-38 on Monday to extend that program for only five months.
While extended unemployment assistance is reasonable, the Senate bill relies on poor funding provisions, including a “pension smoothing” gimmick that would actually cost the government money in the long run.