Washington, D.C. – House Republicans on Tuesday at a press conference on Capitol Hill, introduced a $3.8 trillion dollar budget that would dramatically shrink the size of the federal government to balance in nine years.
The plan, authored by House Budget Committee chairman Tom Price, R-Ga., is billed as “a blueprint that demonstrates how to solve our nation’s fiscal and economic challenges.”
The plan is the first drawn up under Price’s leadership of the committee, but it largely follows the template set by former chairman Paul Ryan of Wisconsin.
The budget claims $5.5 trillion in decreased spending over the next 10 years, bringing federal spending down from over 20 percent of U.S. economic output in 2014 to 18.3 percent in 2025 with deep cuts to federal programs and a shift in responsibility from Washington to state and local governments.
Overall, Price aims to lower the federal debt from 74 percent of U.S. gross domestic product today to 55 percent and falling in 2025. Under President Obama’s budget, the debt would only be slightly below today’s levels.
The plan is likely to please conservatives who have run on balancing the budget and lowering the debt and draw condemnation from Democrats and liberals who oppose cutting domestic programs and anti-poverty funding.
Price aims to navigate the differences between penny-pinching conservatives and defense hawks who favor raising the spending caps that are set to keep defense spending at $523 billion for 2016.
If you look at some of the drastic cuts you can begin with the fact that Obamacare would be repealed entirely. In its place, the budget proposes to “increase access to quality, affordable health care by expanding choices and flexibility for individuals, families, businesses and states while promoting innovation and responsiveness.”
Next up is a Medicare reform plan along the lines of the one advanced by Ryan. Starting in 2024, new seniors would receive subsidies to purchase a private health insurance plan or enroll in traditional Medicare. Meanwhile, the laws for the expansion of Medicaid, the state-administered low-income health insurance plan, would be rolled back. Instead, states would be given more flexibility in designing their programs with “State Flexibility Funds.”
Price envisions giving states similar authority over a number of federal programs for the poor, including, by 2021, the food stamp program. “Whether we are talking about food stamps, housing assistance or education benefits – all are made more difficult when Washington forgets the limits of its own understanding and power,” the budget outline says.
In shifting control to the states, the budget would cut Medicaid spending by over $900 billion, relative to $4.6 trillion expected to be spent on the program under currently law. It would also cut other mandatory programs, including many geared toward low-income beneficiaries, by over $1 trillion.
Defense wise the budget would respect the cap, but raise defense spending to $613 billion in total in 2016 by allocating funds to the Department of Defense’s Overseas Contingency Operations, or war funds.
Price would also create a “Defense Readiness and Modernization Fund” to provide a “mechanism by which Congress can responsibly allocate in a deficit-neutral way the resources the military needs to address our national security threats at home and abroad,” the plan says.
In all, defense spending would rise to $151 billion more than in Obama’s budget over 10 years, and $387 billion more than in current law.
The budget is not legislation, but rather a broad outline of spending priorities for Congress. If past and reconciled with a Senate budget, it would set spending levels for appropriations bills to be drawn up later.
Senate Republicans are set to unveil their own budget document Wednesday. The two chambers face an April 15 deadline for reaching an agreement.