This week the House Budget Committee presented its budget proposal for fiscal year 2017 to the American people. The proposal spends too much, cuts too little, and is riddled with gimmicks that thwart the goal of honestly balancing the budget. This is not what a conservative budget looks like.
This budget’s primary relevance is how much spending it authorizes for domestic and defense discretionary programs next year. The proposal includes $30 billion in new spending authority above the Budget Control Act (BCA)’s post-sequester levels for discretionary programs in 2017. At $1.07 trillion in discretionary budget authority, this budget is in line with the spending increase negotiated in the Obama-Boehner budget (BBA 2015) deal. But when this bill passed last November, it did so only because of a strong showing of Democrat support.
House Majority Leader Kevin McCarthy said Thursday he won’t bring this budget to the floor for a vote next week. That means it’s not too late to move in a more fiscally responsible direction.
Those following along in this debate might wonder why a supposedly conservative House budget committee feels compelled to support this higher spending. The answer lies with their new speaker, Paul Ryan, R-Wis., and his promise to restore regular order and to offset the discretionary spending increase with reductions to mandatory spending. The problem is that both of these promises ring hollow. The most likely outcome is higher discretionary spending today while regular order and other spending cuts remain illusory.
This budget is also $57 billion higher than the budget that Congress agreed to for the 2017 fiscal year last May. This is yet another indicator to seriously question any promises of future spending cuts for spending increases today. If Congress were serious about controlling spending, it would begin reducing spending this year, and with this budget. The American people are tired of a Congress that says one thing and does another.
And yet despite this higher spending, the budget shortchanges defense. Though the budget proposal provides $74 billion in Overseas Contingency Operations (OCO) funding for defense, defense may not receive the full Overseas Contingency Operations amount if appropriators decide to meet the president’s request for $15 billion in State Department contingency funds. This budget leaves the choice up to them.
A better budget would abandon separate limits on defense and non-defense spending and replace them with an aggregate limit on discretionary spending in 2017, as promised in last year’s budget. Congress should then act on that budget with appropriations bills that reflect the American people’s desire for lower spending, less waste, and fewer special interest handouts. A conservative budget provides opportunity for all and favoritism for none.
This budget balances only with higher revenues and by counting benefits from economic growth. The proposal doesn’t reach balance until 2026 and depends on $89 billion in macroeconomic feedback effects for deficit reduction to get there. The House budget also includes an additional $225 billion in revenue from macroeconomic feedback due to economic growth effects from repealing Obamacare.
These gimmicks thwart the goal of honestly balancing the budget.
The budget also contains a provision that could allow Congress to spend about $25 billion more in discretionary spending if Chairman Bill Shuster’s Air Traffic Control corporatization plan—which would effectively reclassify Air Traffic Control spending as mandatory—is enacted. Congress should not shift any more spending to a budget category that allows spending to grow out of control.
While the budget includes support for critical initial reforms to Medicare and Medicaid, the repeal of Obamacare, and a commitment for patient-centered health care reform, it could go farther. The timeline for converting to Medicare premium-support should be moved up, and there should be an explicit option for Medicaid enrollees to use their Medicaid dollars to purchase private coverage of their choice.
Though the budget states that it would repeal all of Obamacare, including its taxes, the budget would replace Obamacare revenues with other tax increases.
On Social Security, the budget once again falls short, by taking no position on reforms to improve the solvency and affordability of the old-age-and survivors-insurance-program, and by supporting only a very minor change to the disability program by eliminating double-dipping from unemployment and disability benefits.
Congress should go back to the drawing board and produce a truly conservative budget. The American people deserve no less. Heritage’s “Blueprint for Balance” shows the way.
