House and Senate GOP budget leaders remained at odds Wednesday over the best scheme for boosting defense spending to combat the rising threat of ISIS and other terrorist organizations. Whatever scheme they devise has to bypass the $523 billion spending cap that was imposed by the Budget Control Act of 2011.
Senate defense hawks and fiscal purists turned up their noses at a House GOP budget proposal to funnel tens of billions of dollars more in annual basic operating funds to the Pentagon through a separate account not covered by the caps and meant to fund U.S. military operations in Afghanistan and Iraq.
But as Senate Budget Committee Chair Mike Enzi (R-WY) unveiled his version of the new Republican majority’s ten-year campaign to balance the budget -- solely with cuts and no tax increases -- the two chambers were largely in sync as they tried put a decidedly conservative stamp on government fiscal policy for years to come.
A day after House Budget Committee Chair Tom Price (R-GA) laid down his plan for slashing government spending and entitlement programs by $5.5 trillion over ten years, Enzi offered an alternative that largely mirrors the House approach. That includes a renewed call for repealing the Affordable Care Act and expanded Medicaid services, tax reform to boost the economy, reduction in government red tape, and steps to address troubling projected shortfalls in Social Security and Medicare for the elderly.
The Senate strategy would take a little longer to balance the budget than the House approach, but would still provide a startling $5.1 trillion of long-term deficit reduction between 2006 and 2025, compared to $5.5 trillion in the House budget. Roughly 85 percent of those total savings would be extracted from mandatory spending programs like Medicaid and Medicare, with the rest coming from discretionary domestic programs important to low and middle-income Americans.
It is less certain whether Senate Republicans are in full agreement with their House counterparts in seeking to overhaul Medicaid and federal food stamps to save hundreds of billions of dollars in the coming years. House Republicans have called for converting Medicaid, food stamps and other key social safety net programs to block grant programs for the states to operate and largely fund – ideas certain to draw fire from the Obama administration, Democrats and advocates for the elderly and the poor.
Senate Republicans indeed are discussing ways to improve the Medicaid health program to reduce the federal government’s share of matching funds and eliminate “rampant waste, fraud and abuse.” Rather than talk of block granting the program, Senate Republicans would model changes after the Children’s Health Insurance Program (CHIP) administered by the U.S. Department of Health and Human Services that provides matching funds to states for health insurance to families with children.
Some advocates for the poor say CHIP is tantamount to a block grant program.
“The [prior] economic downturn and Medicaid expansion in the President’s health care law have significantly increased the number of Americans eligible for Medicaid, compounding the program’s financial problems,” according to a Senate budget document. By transforming the program to something along the lines of CHIP, it “increases state flexibility to design benefits and administer programs.”
That change alone would save the government an estimated $400 billion in Medicaid costs in the coming decade. If the Republican Congress were to reverse the Medicaid expansion fostered by Obamacare, the government might save an additional $800 billion to $900 billion in the coming decade, according to some estimates.
While the similarities between the two budget documents should be heartening for the Republicans, there is still likely to be enough controversy to hamper the GOP leadership’s goal of forging and passing the first strictly Republican budget blue print in nearly a decade.
After a steady decline in recent years as the economy improved, the federal budget deficit this year is pegged to hit a modest $468 billion. But as more and more baby boomers retire and demands for Social Security, Medicare and other entitlements grow, the Congressional Budget Office has warned the deficit will grow again, reaching $1 trillion within ten years under current government spending and tax policies.
“Today we begin the monumental task of confronting our nation’s chronic overspending and exploding debt, which threatens each and every American,” Enzi said in his opening remarks on the budget. “Make no mistake, our fiscal outlook is grim and has been ignored for far too long. But we have a profound moral responsibility to help hard-working taxpayers see the true picture of our country’s finances.”
Sen. Bernie Sanders (I-VT), the ranking member of the Senate Budget Committee, said that he and his Democratic colleagues share the Republicans concern about the high national debt.
“But where we disagree is how you address the deficit and the debt,” he said during a meeting on the GOP budget. “And, we feel strongly that from a moral perspective and an economic perspective, you do not balance the budget on the backs of the elderly, the children, the sick and the poor – the most vulnerable people in our society – and ask nothing from the wealthy and large, profitable corporations.”
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