CHN: Senate Budget Committee Budget Resolution

March 20, 2015

The Senate Budget Committee, chaired by Sen. Mike Enzi (R-WY), released its budget on Wednesday. It has many similarities to the House budget, mainly in that it would also slash funds for critical human needs programs and take resources away from low-income Americans. It cuts overall spending by $5.1 trillion over 10 years, with $4.3 trillion of those cuts coming from mandatory spending and $97 billion coming from discretionary spending programs. It also claims to balance the budget over that same time period, while many cuts and assumed revenue streams are unspecified. The Center on Budget and Policy Priorities estimates that “roughly two-thirds of the about $4.5 trillion in non-defense program cuts would come from programs for families and individuals of modest income.”

Sequestration and defense spending: The Senate budget resolution keeps sequestration caps in place for FY26, but it also includes $96 billion for the Overseas Contingency Operations (OCO) account (of which $89 billion funds defense operations and $7 billion for State Department activities). The OCO fund is supposed to fund war-related activities, but has repeatedly been used by the Pentagon to cover non-war-related items, effectively avoiding much of the impact of sequestration cuts. OCO funding in the Senate budget was increased by $38 billion in Committee through a successful Graham (R-SC) amendment, raising the amount for defense to just $1 billion short of the House budget total. This increase would be offset by supposed reductions in defense spending in later years that would not be binding on future Congresses.

Non-Defense Discretionary Spending Programs (those programs subject to the annual appropriations process): The budget maintains damaging sequestration levels for FY16 and cuts critical human needs programs by at least $236 billion below these harmful cap levels over 10 years starting in FY17. According to the Center on Budget and Policy Priorities, the actual cuts would likely be tens of billions of dollars larger as a result of certain changes in Senate rules under this plan. These cuts would drastically hurt programs like education, job training, transportation, and many more.

Mandatory Spending Programs (those programs not subject to the annual appropriations process): Medicaid would be turned into a block grant and cut by roughly $400 billion over 10 years. The budget also calls for $1.2 trillion in unspecified cuts to mandatory spending programs, such as SNAP/food stamps, child nutrition programs, Supplemental Security Income, the Earned Income Tax Credit and Child Tax Credit, and unemployment insurance. While the budget doesn’t provide specific information on which programs would be cut or by how much, it is known that $660 billion of the $1.2 trillion in cuts would come from a category of the budget that covers what’s known as “income security” programs. In fact, the Senate provides $148 billion less in this category than the House budget plan over 10 years.

Affordable Care Act: Similar to the House budget, the Senate budget repeals the Affordable Care Act, including Medicaid expansion. This would take away health insurance from millions of Americans, many of whom are low-income and recently obtained insurance for the first time.

Taxes: Despite repealing the Affordable Care Act, the budget retains the $1 trillion over ten years in revenues brought in by the Affordable Care Act without specifying how this money would be raised. Without providing specifics on tax cuts, the blueprint says it will “reduce the costs to business and individuals from the Internal Revenue Code.”

Reconciliation: The Senate budget resolution only gives reconciliation instructions to two committees – the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee This requires these committees to come back with legislation that would reduce the deficit by at least $1 billion over 10 years. The committees would have until July 31 to submit such proposed legislation to the Senate Budget Committee, which would allow them to respond to a Supreme Court ruling on subsidies offered through health care law’s federal exchange due out this summer. As the Senate budget resolution states, “By adopting this new budget, Republicans can repeal the President’s health law and the committees of jurisdiction can continue to work on plans to replace it.” These requirements are only binding if the House and Senate agree on a joint budget resolution. Reconciliation bills cannot be filibustered and therefore only need 51 votes to pass in the Senate. However, unlike the budget resolution itself, bills drafted as a result of reconciliation instructions have to be signed into law by the President and therefore are subject to a possible veto.

Because the House has proposed requiring reconciliation bills from many more committees, the final budget resolution agreed to by both bodies may well demand savings from more than the two included in the Senate plan. And the expectation is that the minimal savings targets in the drafts now will be exceeded substantially by the time Congress takes up reconciliation bills in the summer.

Other: The Senate budget plan does not include proposals for increased spending on infrastructure, paid leave initiatives, or immigration.



Categories: Budget and Appropriations