House Budget Committee Chairman Tom Price (R-GA) released his budget proposal this morning, which outlines spending priorities for 2016 through the next decade. The proposal is a mixed bag. It includes some reform steps, but also fails to aggressively confront the dire fiscal realities facing the nation with specific spending-cuts.
Spending Restraint– The budget proposes $43.2 trillion of total spending over the next decade, which is $5.5 trillion below baseline projections from the Congressional Budget Office (CBO). Ten year projected deficits are also much lower than CBO projections; $1.3 trillion compared to $7.2 trillion. This proposal balances the budget within ten years, moving us closer to solving our long-term fiscal challenges.
ObamaCare Repeal– Price’s proposal includes full repeal of ObamaCare including all of its health care and tax provisions. This constitutes a large share of the spending cuts, $2 trillion of the $5.5 trillion.
Defense–The 2011 bipartisan Budget Control Act (BCA) set caps on defense and nondefense discretionary spending through 2021. Many Republicans have pushed Price to rescind the caps on defense spending, claiming that they are too draconian and will undermine America’s security. Other Republicans pushed to keep the BCA caps as an effective restraint on spending. The Price budget goes for the easy political solution: it retains the BCA caps for defense spending for fiscal year 2016, but it increases the “emergency” defense spending account, known as Overseas Contingent Operations (OCO), by $16 billion compared with fiscal year 2015. This allows Price to honor the BCA, while violating its spirit. Under this plan, the U.S. will spend $387 billion more on defense over the next decade than CBO baseline projections.
Entitlement Reform–CBO projects that 85 percent of spending growth over the next decade will be due to Social Security, Medicare, and net interest. The Price budget acknowledges the need to reform Social Security and Medicare, but fails to meet the challenge. The budget does not include a plan to reform Social Security, other than saying it needs a “long-term solution” from a “bipartisan commission.” Medicare reforms don’t start until 2024. Waiting up to a decade to reform these two programs is a dereliction of duty.
Tax Reform–The budget proposal is vague about this important topic. It urges Congress to consider tax reform, but does not detail any specific reforms, nor does it provide a timeline for considering proposals.
Overall, Price’s budget proposal would cut spending and balance the budget, but it still leaves much to be desired.