CHN: Chairman Ryan’s Budget Plan Passes the House, Hitting the Poor Harder than Ever
Last year, 66 percent of the cuts in House Budget Committee Chair Paul Ryan’s (R-WI) budget were to low-income programs. This year, the proportion hitting the poor rose to 69 percent, as estimated by the Center on Budget and Policy Priorities. Its largesse, on the other hand, flows disproportionately to millionaires, to corporations, and to the Pentagon. These priorities in the FY 2015 Budget Resolution were endorsed exclusively by House Republicans, who provided all 219 favorable votes. The budget was opposed by 205 House members (193 Democrats and 12 Republicans). The vote was on the last of a series of alternative budget plans debated in the House on April 9 and 10.
What Does a Budget Resolution do? The Congressional Budget Resolution is an outline providing total figures for annual appropriations and including policy recommendations. Usually, the only parts of the Resolution binding on Congress are the appropriations figures, and those only become binding if the House and Senate can agree on a final version. This year, Congress had already agreed to FY 2015 totals; that occurred as part of the Murray-Ryan deal in December 2013 to end the stand-off over spending. Acknowledging that reality, Senate Budget Committee Chair Patty Murray (D-WA) announced she would not draft a Budget Resolution at all this year. But Chairman Ryan wanted to outline his vision for the future, and others in Congress wanted to show how their visions differed. Now that it has passed the House, it will not go farther, since the Senate will not act on any resolution. But it is instructive to see what differing Congressional groups envision over the next 10 years if they had the chance to make policy.
The Ryan-House Budget Committee Budget: When the two-year budget deal was enacted in December, 62 House Republicans voted against it. For them, the cuts were not deep enough. That posed a problem for Chairman Ryan and the House leadership, because they could not afford to lose more than 16 Republicans and pass a budget, assuming Democrats would vote no. This Budget Resolution won over most of the very right-wing members by promising to balance the budget in 10 years with no net new revenues. The budget purports to do this by slashing $5.1 trillion from federal spending over 10 years, dramatically diminishing the federal government’s capacity to respond to need or invest in the future. Over the 10-year period of FY 15 – FY 24, revenues would total $40.6 trillion and outlays would total $40.3 trillion.
The budget assumes repeal of the Affordable Care Act. In addition, the budget would block-grant and slash Medicaid and the Children’s Health Insurance Program by $732 billion, or by more than one-quarter in 2024. All told, that’s 40 million people denied health insurance through 2024. The budget also cuts Medicare by $129 billion, proposing a “premium support”/voucher program expected to squeeze the federal contribution to health coverage, placing a greater burden on seniors. Ryan’s budget plan as in the past would turn SNAP/food stamps into a block grant, this time starting in 2019, and cut it drastically ($137 billion over 10 years). About 150,000 children with disabilities eligible for Supplemental Security Income (SSI) would see their benefits decline. The long-term jobless would continue to be left out. The $1.7 billion per year Social Services Block Grant is eliminated: it funds low-income services like child care, certain child welfare services, and programs for seniors. Pell Grants for low-income college students would be frozen at current levels for the full 10 years, eroding their already low level (now only covering about one-third of college expenses).
It cuts discretionary programs more deeply than the continuation of sequestration would, but increases Pentagon spending by $483 billion over sequestration levels, while cutting domestic discretionary programs by a whopping $791 billion. With cuts so much deeper than sequestration, the budget would surely lead to cuts worse than the losses in rental vouchers, Head Start, senior meals, and much more that occurred in FY 2013. (See CHN’s Sequestration Impacts reports.) At the same time, the budget proposes a massive tax reduction estimated to provide at least $200,000 to each millionaire in FY 2015 alone, even if all their other tax expenditures were eliminated. While this and corporate tax rate reductions are supposed to be offset by other tax increases, the increases are not specified, and similar proposals in the past could not be fully offset without significantly raising middle class taxes.
The other budgets debated on the House floor included the Democratic alternative offered by House Budget Committee Ranking Member Chris Van Hollen (D-MD), the Congressional Progressive Caucus budget, the Congressional Black Caucus budget, the Republican Study Committee budget, and a supposed translation of the Obama budget into budget resolution form, offered by Republican Mick Mulvaney (R-SC). Here are descriptions of most of these plans:
The House Democratic Alternative Budget: This plan would end sequestration for domestic discretionary and mandatory programs starting in FY 2016. Over 10 years, revenues would add up to $42.4 trillion, with outlays of $48.5 trillion. The budget includes President Obama’s $302 billion transportation infrastructure program as part of an investment strategy for job creation. It also adds $76 billion over a decade for expanded early childhood education. The budget protects the Affordable Care Act, Medicaid, and Medicare, and would restore Emergency Unemployment Compensation. It avoids cuts to SNAP and SSI. It assumes comprehensive immigration reform takes place. It maintains low-income tax credits and includes the President’s proposal to increase the Earned Income Tax Credit for low-income workers without children. It raises revenues while protecting low/moderate-income taxpayers, allowing the deficit to shrink to 2.3 percent of GDP. This budget was defeated 163 to 261, with 7 not voting. Thirty-one Democrats joined with 230 Republicans in voting down this budget. No Republicans joined the 163 Democrats who supported it.
The Better Off Budget, Congressional Progressive Caucus: The Better Off Budget demonstrates it is possible to create 8.8 million jobs by 2017 and to invest in education, infrastructure, health care, housing, and nutrition while still reducing the deficit. Its total revenues would be $47.2 trillion over 10 years, with outlays of $51 trillion. It replaces the harmful cuts of sequestration and makes new investments by closing tax loopholes that allow corporations to hide profits offshore and high-income individuals to pay lower rates than many middle-class taxpayers. The Progressive Caucus budget makes the tax code more fair, by preserving and expanding tax credits that help low-income workers while seeking more revenues from those at the top. It preserves and strengthens the Affordable Care Act, while protecting Medicare and Medicaid. The budget reverses recent cuts to SNAP/food stamps and restores Emergency Unemployment Compensation for the long-term jobless. It provides for comprehensive immigration reform, jobs, training, and supports so people can work, and protects the safety net when they cannot. It makes responsible savings in Pentagon spending and in other areas like prescription drug price negotiations and farm subsidies. This budget was defeated 89 to 327, with 15 not voting. Only Democrats supported it; 224 Republicans and 103 Democrats opposed.
The Congressional Black Caucus Alternative Budget for FY 2015: This budget also ends sequestration and would invest $500 billion over three years to create job. The budget provides for $43.2 trillion in revenues over 10 years and $49.3 trillion in outlays. The CBC alternative would provide for anti-poverty initiatives including restoring the TANF Emergency Fund and improving child care and Head Start. It would defend against further SNAP cuts and invest in improvements, would target federal resources to areas of concentrated poverty, and increase funding for education. The CBC budget increases revenues from fair sources, allowing the budget to reduce the deficit while making investments aimed at reducing pernicious economic disparities. It failed 116 to 300, with 15 not voting.
The Republican Study Committee Back to Basics Budget: This budget, produced by some of the most right-wing members of the House, cuts more massively than the Ryan budget, but with similar estimates for revenues. It would balance the budget over four years, instead of the 10-year estimate in the budget that passed. It would take in $40.6 trillion in revenues over 10 years with outlays of only $40.3 trillion, the lowest of any of the alternatives. It freezes total discretionary spending at $950 billion a year until the budget is balanced (taking it back to FY 2008 levels), while allowing Pentagon spending to rise just as the Ryan budget proposes: from $521 billion in FY 2015 to $696 billion in FY 2024. The budget includes the “chained CPI” reduced inflation adjustment for Social Security and other programs, a proposal not present in any of the other budget plans. It would include new work requirements for SNAP and require restrictions to disabilities programs. This budget failed 133-291, with 7 not voting. No Democrats voted for it; 97 Republicans joined 194 Democrats to oppose it.
In the past year, Chairman Ryan has focused on the problem of poverty in the U.S., and has promised to unveil anti-poverty proposals at some point in the future. A recent report put out by the House Budget Committee majority evaluated anti-poverty programs in the 50 years since the War on Poverty and found them wanting. The report was much criticized for inaccurately characterizing research findings about some of the programs. But even conceding that anti-poverty programs need to be improved, the House-passed Budget Resolution reduces spending on the full range of these programs by $3.5 trillion over the next decade. Evidence from past periods of poverty reduction showed a combination of broad economic growth and government steps to help the poor share in that progress. Many economists believe that the Ryan budget would make it much harder to replicate those conditions.