House Republicans on Tuesday, March 17 unveiled a $3.8 trillion budget plan for next year which effectively breaks tight budget limits on military spending, but promises bigger cuts to social programs, such as food stamps and Medicaid.
The spending plan by Budget Committee Chairman Tom Rice (R-GA) pads both the Pentagon and State Department accounts for overseas operations in Afghanistan and elsewhere by $36 billion above President Barack Obama’s $58 billion request for such spending, which is not bound by the return of automatic cuts next year.
To meet their promise to balance the budget within a decade, Republicans proposed cutting $5.5 trillion from a federal budget on track to total $50 trillion over that period. They also swallow up almost $1 trillion in higher tax revenues over a decade, by assuming the expiration of popular tax breaks (like the research and development tax break that are known collectively in Washington-speak as tax “extenders”).
In the immediate term, the measure would produce higher deficits as lawmakers block a looming cut in Medicare fees to doctors, as well as increase the Pentagon’s spending budget.
Chairman Price said the budget is the right solution “as our nation faces tremendous fiscal and economic challenges and, if nothing is done, a future of less opportunity and low expectations.”
Democrats, meanwhile, sharply criticized the proposal.
“It will mean the end of the current Medicare guarantee, and millions of seniors in nursing homes will be especially hurt by the irresponsible cuts to Medicaid,” said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. He said it also includes “windfall tax cuts to the top 1 percent.”
The sleight of hand on defense spending has already raised the ire of conservative groups, such as the Heritage Foundation, and isn’t likely to win approval by the Senate. Still, it could clear the way with pro-Pentagon forces in the House GOP, which had made it clear they could not support a budget that promised less for the Pentagon than the President’s initial request.
The overseas account, separate from the core defense budget, has covered the cost of two wars in Iraq and Afghanistan since the military campaign began in 2001. The account has also recently helped the Pentagon deal with cuts in projected defense spending.
The House Republican plan also reprises sharp proposed cuts to the Medicaid program which assists the poor and elderly, food stamps, and health care subsidies under so-called Obamacare. But it retains Obama health care program cuts to Medicare providers. Medicaid alone would account for almost $1 trillion in cuts over a decade.
Price’s plan, written in consultation with other GOP leaders, borrows heavily from prior GOP budgets, including a controversial plan that would transform Medicare into a voucher-like program for seniors who plan to join the program in 2024 or later. They would receive a subsidy to purchase health insurance on the private market.
The use of overseas military funds to skirt spending caps on the US military is a new feature of the plan. War spending is exempt from budget limits and the move would allow Republicans to use budget tricks to match Obama’s proposal boosting defense spending by $38 billion above current limits, a key demand of the GOP’s plan.
“It’s a gimmick,” said Senate Armed Services Committee Chairman John McCain (R-Ariz.) of padding war accounts. Many Senate Republicans, GOP aides claim, are likely to reject the plan to radically reshape Medicare, feeling more hesitant about the use of war funds to help out the Pentagon.
(With reports from Associated Press)
