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GOP offers $3.8T budget that boosts defense

Andrew Taylor
Associated Press

Washington — House Republicans on Tuesday unveiled a $3.8 trillion budget plan for next year that effectively breaks tight budget limits on military spending while promising big cuts to social programs such as food stamps and Medicaid.

The plan by Budget Committee Chairman Tom Price, R-Ga., would pad Pentagon and State Department accounts for overseas operations in Afghanistan and elsewhere by $36 billion above President Barack Obama’s $58 billion request. Such spending is not bound by the return of automatic cuts next year.

To meet their promise to balance the budget within a decade, Republicans propose cutting $5.5 trillion from a federal budget that’s on track to total $50 trillion over that period. They also would account for almost $1 trillion in higher tax revenue over a decade by assuming the expiration of popular tax breaks — known collectively in Washington-speak as tax “extenders” — such as for research and development.

In the immediate term, the measure would produce higher deficits as lawmakers would block a looming cut in Medicare fees to doctors and increase Pentagon spending.

In a statement, 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.”

Obama and Democrats sharply criticized the proposal.

“It’s not a budget that reflects the future. It’s not a budget that reflects growth,” the president told reporters at the White House.

Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said the GOP budget 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.”

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. But 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 Obama’s 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. In recent years, the account has helped the Pentagon deal with cuts in projected defense spending.

At issue is an annual measure known as a budget resolution that sets broad goals for taxes and spending but requires follow-up legislation to actually implement the plan.

The measure is less detailed than in previous years about its cuts. For instance, more than $1 trillion in cuts over 10 years would come from so-called mandatory programs other than Medicare, Medicaid, and the Affordable Care Act, but doesn’t specify where, for the most part. Such programs include federal pensions, food stamps, farm subsidies, and tax credits for the working poor.

House Republicans have shown no appetite to try to pass most of their controversial cuts and are showing no indication that this year will be any different, even though Republicans have claimed the Senate and the budget process offers the prospect of a filibuster-proof bill that could deliver budget cuts to Obama’s desk.

The latest plan by Republicans controlling the House also reprises sharp proposed cuts to the Medicaid program for the poor, 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 GOP leaders, borrows heavily from prior GOP budgets, including a controversial plan that would transform Medicare into a voucher-like program for seniors joining Medicare 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 military, however, is a new feature. War spending is exempt from budget limits and the move would allow Republicans to use budget tricks to match Obama’s proposal to boost spending on overseas operations by $36 billion above current limits. That was a key demand of the party’s defense hawks.

Even though the Appropriations Committee will have $36 billion more in new spending authority, the GOP budget claims a $1 billion drop in the deficit, mostly because of slashing cuts in highway construction.

Senate Republicans, GOP aides say, are likely to reject the move to radically reshape Medicare and are more reluctant to use war funds to help out the Pentagon.

“It’s a gimmick,” Senate Armed Services Committee Chairman John McCain, R-Ariz., said of padding war accounts.

Price is also replicating Ryan’s approach to cutting Medicaid and food stamps by proposing to transform them from federal programs into wholly state-run programs that receive lump sum funding from the government. That approach makes it easier to cut these programs without saying how many people would be dropped or how their benefits would be cut. But there’s little doubt that many elderly people whose Medicaid pays for nursing home care would be at risk, as would children above the poverty line who depend on the program.