After months of infighting, House Republicans are unveiling a budget resolution Tuesday that would dramatically reshape the federal government, requiring more than $200 billion in cuts to mandatory programs and set the path for a major overhaul of the tax code.
The document is essentially a GOP wish list with many of the policies and reforms Republicans have pushed for years like repealing Obamacare, rolling back financial regulations, paring back social welfare programs and getting rid of some of the Obama administration’s top priorities.
Even before the budget panel set the topline numbers for the 2018 fiscal year, the appropriations committee already crafted spending bills that designated $621 billion for defense spending and $511 billion for non-military domestic programs.
But the primary legislative focus of the 2018 budget is to use it as a vehicle for changing taxes. As they did with their Obamacare repeal plan in the 2017 budget, GOP leaders are employing a budget tool called “reconciliation” to move tax legislation through the Senate with a simple majority.
Conservatives in the House Freedom Caucus pressed House Speaker Paul Ryan and other leaders to include hundreds of billions of mandatory spending cuts in the proposal, which balances the federal budget in ten years.
House budget committee Chairwoman Diane Black dubbed the proposal “Building a Better America.”
In a written statement on Tuesday Black said the plan “will lay out a path to balance, promote job creation, give our military the resources they need to protect our nation, and hold Washington accountable. This budget also sets out reconciliation instructions to fix our broken tax code and make long-overdue reforms to mandatory spending.”
Republicans may not have votes to pass
The committee is planning to consider the proposal Wednesday, but the panel includes several members of the conservative House Freedom Caucus, who continue to call for more sweeping spending cuts, as well as more details on a tax reform package that House and Senate GOP leaders and the White House are still negotiating.
If the proposal clears the committee it’s unclear when the full House will vote on it because GOP leaders are still gauging internally whether they have the votes to pass it. Democrats are already blasting the proposal and are expected to oppose it so Republicans can’t risk losing more than roughly 20 votes in order to approve the budget.
There is no legislative requirement to get a budget done. House GOP leaders skipped doing one last year during the presidential campaign. But without a budget resolution Republicans would need Democratic support for their tax overhaul, but there have been few serious discussions across the aisle on the issue.
House Speaker Paul Ryan, Treasury Secretary Steve Mnuchin, and Senate GOP leaders are still not on the same page on how to pay for a tax code rewrite that would reset the tax rates and get rid of a host of tax credits. The budget will not spell out the details, but will require that the plan be revenue-neutral.
Freedom Caucus members pushed initially for as much as $400 billion in mandatory savings, but the version rolled out on Tuesday directs eleven House committees to come up with a minimum of $203 billion in savings from mandatory spending programs.
Chairmen of the panels who have to produce these reductions have pushed back at forcing too aggressive of a package of cuts, and some warn that they want to ensure that the move to require these cuts undermines the effort to piece together the tax bill.
The House GOP plan showcases how policy proposals that many in the party have pushed for years could be attainable with Republican control of the White House and Congress. The resolution lays out structural changes to Medicaid, transforming the program largely into a block grant for states to administer and adding work requirement for able bodied adults receiving benefits.
The budget also proposes major changes to Medicare, suggesting that the government program model itself on the Medicare Advantage program that offers better benefits to seniors who pay a premium. It suggests that traditional Medicare would still be an option.
Senate Republicans, struggling for weeks with their version of an Obamacare repeal and replace bill, have not outlined their budget proposal.
Later this week House Republicans hope to finalize a massive spending bill wrapping all of the various spending measures together for the upcoming fiscal year. But that bill was not negotiated with Democrats and even if they are able to get agreement among GOP members and pass it through the House It will not move in the Senate.
Leaders will have to separately work out a bipartisan spending deal before the government agencies run out of money later this fall in order to avoid a possible shutdown.