House of Representative Budget Committee Chairman Paul Ryan, R-WI announced and released the GOP’s budget plan entitled “The Path to Prosperity” for fiscal year 2015 on Tuesday, April 1, 2014 which will cut spending by over 5 trillion over the next 10 years to reach a balanced budget in 2024. As with the budget plan the President Barack Obama and the White House released a month earlier on March 4, the Republican budget plays to their constituents in advance of the midterm elections in November.
The entire budget looks at 5.1 trillion spending cuts over the next 10 years. The budget includes drastic spending cuts primarily to domestic social programs including food stamps, college loan programs, housing subsidies, income assistance which will save $966 billion. The changes in the structure and rules for Medicare and Medicaid will save $732 billion. There will also be $791 billion in cuts to discretionary spending programs. For the social programs Ryan looks to convert them into grants given to the states to control.
The budget blueprint, however, increases spending in one area, defense and the military. The GOP wants to reclaim their “mantra” as the party that places defense as a priority, especially with the cuts the Obama Administration is instituting for the military that will place them in a pre-World War II position and the recent crisis in the Ukraine. Over 10 years $483 billion more will be spent on the military than the Congressional Budget Office suggests and $274 billion more than Obama allotted in his budget, with the first raise of $43 billion planned for 2016.
The Washington Post analyzed the GOP’s renewed military position, concluding that “it is clear that the GOP is reprioritizing national security. As a party it is making a statement that the president’s defense budget and national security policies have left us weaker and more vulnerable. That is a major turn from only a few years ago and suggests that the party is returning to its tough-on-defense roots.”
The GOP budget gets rid of the automatic spending cuts known as the “sequester” and also does not raise taxes. The main point is balancing the budget by decreasing spending through cuts to programs, while keeping the Republican promise to their constituents not to raise taxes. The budget proposal states; “By balancing the budget, the ‘Path to Prosperity’ will promote economic growth. By paying down the debt, the federal government will help keep interest rates low, which will spur greater investment and productivity”
The majority of the savings, $2.1 trillion comes from repealing Obamacare, the Affordable Care Act. Now with the White House reaching their goal of 7 million health insurance sign-ups by the end of the open enrollment period, it will be more complicated for the Republicans to repeal a successful law. Ryan did not outline a solid health care alternative to the Affordable Care Act only saying it will be “patient centered reforms that will help increase access, improve quality and lower costs.”
Ryan uses a “macroeconomic effect” to calculate savings and the deficit’s reduction. USA Today explains that fiscal conservatives oppose this method, not believing the reductions are the same as actual spending cuts.
The Ryan budget is mostly symbolic representing Republican fiscal policies as USA Today explains the budget “outline[s] Republican priorities and goals for taxes and spending over the long term. Congress does not have to vote on the budget, because of the two-spending bill that is in place for 2014 and 2015. Reuters called the blueprint a “manifesto of Republican priorities” meant as a contrast to Obama’s budget, which represented Democratic priorities in the midterm elections.
Still the Republican Congress intends to debate the budget and put it to a vote next week even though it will not become law. The budget, however might not even receive enough votes from Republicans to pass, because of opposition from Tea Party conservatives, because it does include enough spending cuts, and might go far for moderate Republicans with Democratic constituents. No Democrat will vote for this budget, and even if 16 Republican oppose it, the budget plan will not pass.
Rep. Ryan rationalized the decision for drastic cuts to the budget telling the press on Tuesday; “This is a plan to balance the budget and create jobs, and it builds off a simple fact: We can’t keep spending money we don’t have.”
Continuing, Ryan praised the spending bill he co-authored in December, but needs to continue with the GOP’s fiscal philosophy, explaining; “The Bipartisan Budget Act was a good first step. But we can and must do more. As the House majority, we have a responsibility to lay out a long-term vision for the country, and this budget shows how we will solve our nation’s biggest challenges.”
The Ryan 2015 budget focuses on deficit reduction, but the deficit currently sits at $514 billion, the lowest of Obama’s presidency and by the end of his administration the unemployment will be at 6 percent, making deficit reduction a less urgent priority. Republicans think that this fiscal philosophy will help them maintain control of the House in the midterms and win the six Senate seats needed to gain control of the Senate too.
Ryan’s motives are not entirely for the party, but also personal. His conservative budgets help catapult him to the 2012 Republican presidential nomination; he has an eye still on the 2016 GOP presidential nomination.
More immediately Ryan plans to step down from the head of the Budget Committee, and wants instead to be the Chairman of the House Ways and Means Committee. The current head Dave Camp, R-MI, announced on Monday, March 31 that he does not intend to run for reelection in the midterms.
Ryan wants to be involved in revising the tax code, which the Ways and Means Committee controls. Ryan even outlines his tax reform plans in his budget, eliminating the current seven brackets to just two brackets, one that would pay 25 percent in taxes and one that would pay 10 percent, simplifying the entire code.
Last month Rep. Ryan criticized the Obama budget, and expressed; “This budget isn’t a serious document; it’s a campaign brochure. In divided government, we need leadership and collaboration. And in this budget, we have neither. The president has just three years left in his administration, and yet he seems determined to do nothing about our fiscal challenges.” Now Ryan countered with the GOP’s own campaign brochure to meet the Democrats own.
Right away Democrats went on the attack criticizing the spending cuts to social programs, Chris Van Hollen, D-MD, and the “top Democrat on the House Budget Committee” called Ryan’s budget “a declaration of class warfare.” Sen. Chuck Schumer, D-NY stated that “The problem is the Ryan budget wouldn’t do a thing to help the middle class. Simply attacking Obamacare won’t get them the political victory they seek.”
President Obama and the Democrats are focusing on economic opportunity to make the middle class within reach for low-income Americans, and they accuse the Republican budget as catering to the wealthy. Obama’s $3.9 billion budget will receive $3.3 trillion in revenues and was tagged the “roadmap for growth, opportunity, and fiscal responsibility.” The Democratic budget calls for $56 billion more in spending for discretionary programs then previously agreed upon $1.014 trillion, and focuses less on cutting the deficit, that automatically highlights the Democratic audience Obama intends to please with it.
The White House released their own lengthy statement attacking the budget highlighting that the Republicans are for the wealthy, while the Democrats are for the lower and middle-class Americans. Part of the White House statement read; “Unfortunately, Republicans in Congress do not have a plan that works for the middle class and the House Republican Budget is the same old top-down approach. Because of a stubborn unwillingness to cut the deficit in a balanced way by closing tax loopholes for the wealthy and well connected, the House Republican Budget would slow the economy, stack the deck against the middle class, and threaten the guaranteed benefits seniors have paid for and earned.”
The White House statement concluded by trying to emphasize the party’s different approaches, saying; “Budgets are about choices and values. House Republicans have chosen to protect tax breaks for the wealthiest rather than create opportunities for middle class families to get ahead. The President believes that is the wrong approach and that we should instead be making smart investments necessary to create jobs, grow our economy, and expand opportunity, while still cutting the deficit in a balanced way and securing our nation’s future.”
The GOP budget plan unveiled on Tuesday it still has to keep in line with the spending limits guidelined in the two-year bipartisan budget agreement passed in December 2013 and created through a bipartisan committee headed by Rep. Ryan and his Democratic counterpart in the Senate Patty Murray, D-WA. The budget committee assigned to create the spending bill came to an agreement for a two-year budget deal, on Tuesday afternoon, Dec. 10, 2013.
The budget framework outlined government spending for the next two fiscal years 2014 and 2015, each year’s budget will be “just over a trillion,” more than 2013’s budget, capping spending at “$1.012 trillion in fiscal year 2014, and $1.014 trillion for fiscal year 2015.” The budget also replaced the sequester cuts, the unpopular across the board budget cuts. There was less headway in reducing the deficit, but there was still some efforts included with “targeted spending cuts.” To please Democrats there were no cuts to Social Security and Medicare and neither are their funding part of the yearly spending cap. With the deal, alternative methods for harnessing revenue were included, but there were no new taxes or tax increases.
Ryan received a backlash from conservative Republicans for the bipartisan spending bill he agreed to in December 2013. The FY 2015 budget he just released is meant to placate the conservatives he offended, showing he still is a fiscal conservative, but one that is trying to find a balance for the entire party, and based on reality, a difficult position. Still Ryan’s budget created a blueprint to counter the Democrats; one they hope will help them gain control of the entire Congress for the next two years in the midterm election this November.
House Republicans’ Fiscal Year 2015 Budget: “The Path to Prosperity”: Read the Plan — Key Facts and Summary — Summary Tables — Charts and Graphs — Setting the Record Straight — Legislative Text
- Statement by the Press Secretary on the House Republican Budget | The White House, April 1, 2014
Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. Her specializations are US, Canadian & Israeli politics.