House Approves Ryan Budget and Passes Six-Month Funding Bill
The GOP controlled House passed two significant pieces of legislation today. They voted for a stop-gap measure that will avoid a government shutdown while funding the government until September. And they also passed a budget resolution authored by Representative Paul Ryan that promises a balanced budget in 10 years.
The Republican-controlled House voted 318-109 to approve legislation that keeps government agencies and programs funded through the end of the fiscal year on September 30, sending the measure to President Barack Obama to be signed into law.
Current spending authority was to expire on March 27, but Republicans chose not to use the threat of federal agencies running out of money and shutting down as leverage to demand deep spending cuts.
Instead, they want to wage a campaign for deficit reduction centered on proposals from House Budget Committee Chairman Paul Ryan of Wisconsin. Shortly before approving the spending bill, the House backed a budget blueprint offered by Ryan to eliminate U.S. deficits within 10 years through deep cuts in healthcare and other social programs.
The funding bill for the rest of this fiscal year, which the Democratic-led Senate approved on Wednesday, keeps in place $85 billion in automatic spending cuts, known as the "sequester."
But it takes some of the sting out of those cuts by allowing the military and several domestic agencies to shift some money within their reduced budgets to higher priority activities.
Passage of the funding measure gives Congress breathing room for a few months to argue over which party has a more viable budget vision before they face another showdown this summer over raising the federal debt limit.
Ryan's budget, marked by deep spending cuts to social programs and repeal of President Barack Obama's health care reforms, defines Republicans' positions in the rest of this year's fiscal battles and in congressional elections in 2014.
The House voted 221-207, largely along party lines, to approve Ryan's non-binding budget resolution, with all Democrats and 10 Republican conservatives opposing it.
The Ryan plan aims to drastically shrink deficits over the next decade and reach a small surplus by 2023.
Like previous budgets that made him known as a fiscal hawk and helped him become the Republican vice presidential candidate last year, it proposes major changes to the Medicare health care program for the elderly.
This popular but increasingly expensive program would be converted to a voucher-like system of subsidies for seniors to buy private health insurance or coverage through the traditional Medicare program.
The Ryan plan has some big problems. notably, unspecified tax reforms that are supposed to provide up to $6 trillion in revenue over the next 10 years.
To make spending align with revenues, the plan assumes the current level of taxes will continue, even as it repeals the tax increases in the president’s health care law and eliminates the alternative minimum tax. The plan directs the tax writers on the House Ways and Means Committee to overhaul the tax code, leaving only two tax brackets, 25 percent and 10 percent, as well as a 25 percent corporate tax rate, down from 35 percent.
But the budget does not detail the tax deductions, credits and loopholes that would need to be eliminated or cut back to finance such deep tax-rate reductions, effectively leaving tax writers a $6 trillion hole to fill – one that Democrats say is mathematically impossible without raising the tax burden of the middle class.
It hardly matters because Ryan's budget proposal has as much chance of becoming law as I do of being opening day starting pitcher for the Chicago Cubs (the Cubbies could do worse and probably will).
What is to admire about Mr. Ryan's plan is that first and foremost, it acknowledges the fact that we have a huge problem and bold action is needed to fix it. That puts the congressman's budget light years ahead of the Democrat's cynical and myopic plans that don't even try to bring the budget into balance. Ryan's plan may not cross every "t" and dot every "i" but at least it seeks to draw parameters around federal spending that are attainable.
An interesting question: Will budget cuts be easier to negotiate if the sequester cuts don't make as deep an impact as the Democrats have been saying? It will certainly put the president and his party in a much weaker position, giving Republicans the whip hand in the next round of budget talks. In fact, as Brian Beutler of TPM points out, Republicans have already scored a PR victory with the sequester. Americans are giving a collective shrug to the cuts, failing to put the kind of political pressure on Republicans that would force them to accede to the president's demands for increased taxes and restore the sequestered funds.
It seems remarkable, but the GOP finds itself in a much stronger position today than they have been in years. They've gotten the drop on the president and given his falling approval numbers, they should be able to maintain their position as long as they stick to their guns and hold the line on taxes.