GOP House Budget Plans for Future Economic and Global Threats
Policy + Politics

GOP House Budget Plans for Future Economic and Global Threats

The budget proposal released by House Budget Committee Chairman Tom Price (R-GA) today vividly depicts a U.S. beset by multiple dangers, including fiscal collapse, terrorist attacks, and an out-of-control federal bureaucracy. All of these, in the view of Price and other conservatives, threaten America’s future. 

Whether one agrees with the grim assessment or not, the priorities and assumptions behind it are critical to understand, as they’ll drive many of the legislative priorities of the 114th Congress.

Related: House GOP Budget Would Wipe Out Federal Deficit in 10 Years

First is a conviction that the federal deficit and long-term debt will slowly strangle the country’s economy unless they’re handled in the near term. 

“America’s fiscal position is unsustainable,” the document says. “Publicly held debt as a share of the economy is nearly 75 percent, and total debt exceeds 100 percent. As baby boomers retire and the cost of the nation’s health and retirement programs soar, this share of debt will increase unabated in future years, absent reform. Interest payments on the debt alone will sum to a whopping $5.6 trillion over the next decade, according to the Congressional Budget Office. These payments will swamp other spending priorities in the budget.”

The budget deficit and rising interest payments, it adds, “could also erode our military and diplomatic standing in the world and undermine our national security at a time when America, our allies and our interests are under threat from radical global jihadists and rogue regimes.” 

Price’s budget claims to bring the federal budget into balance within 10 years, in part by slashing $5.5 trillion in spending over that time period. It would put the level of debt on a downward path, slowly reducing the share of federal outlays dedicated to debt service.

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The U.S., according to Price, is also threatened by lackluster economic growth. “The economy is not working for many Americans. A lot of people are struggling to keep up or are being left behind altogether… Our economy is not reaching its full potential.”

The culprits here are “out-of-control spending, higher taxes, and burdensome regulations,” according to Price. “Every dollar taken for taxes or to service the debt through interest payments is a dollar that can’t be used to pay rent, buy a house, expand a business, buy a car, send a child to college, or care for a family member. All the things Americans want to do are being harmed and made more difficult by the president’s policies.” 

The budget calls for comprehensive tax reform, the repeal of restrictive (including much of the Dodd-Frank Wall Street reform bill signed into law after the financial crisis) and a major increase in U.S. energy extraction. The budget says that would reduce spending and bring down prices for average Americans. 

Another assumption is that the Affordable Care Act is a mortal threat to the health care system in the U.S. Again, many would dispute that, but it is a driving element of how the budget deals with health care spending. In this worldview, unless Obamacare is eliminated root and branch, no other repairs to the health care system are possible.

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“Obamacare is not working for America’s families, doctors or employers,” it reads. “It is imperative that the president’s health care law be repealed so that we can start over and make targeted, commonsense reforms…” 

Once Obamacare is gone, the plan would shift Medicare into a “premium support” system. (Many economists see that as vouchers by another name.) It would transform Medicaid into a kind of modified block grant program managed mostly by the states.

The budget does not directly address how millions of Americans newly covered under Medicaid and plans sold on the ACA’s health care exchanges would find coverage. But it praises “patient-centered health care” and the market’s power.  

“The goal … is to empower patients – whether we are talking about increasing competition and transparency in the health insurance market or allowing individuals to join together voluntarily to pool risk so no person is priced out of the market even if they have a pre-existing condition.”

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The budget also assumes the U.S. is under direct threat of attack from various bad actors around the world – and that we must increase our defense budget, though it’s already larger than the combined defense budgets of the next 10 biggest spenders. 

“Today, our nation, our allies and our interests at home and around the world are threatened by radical Islamic terrorists as well as unstable and oppressive regimes,” it finds. “The growing unrest and instability in many parts of the world remind us daily what is at stake… “

As a result, the Price budget hikes defense spending sharply, in part by using a vehicle called the Overseas Contingency Operations fund. The OCO is off-budget spending, meaning it doesn’t technically add to the deficit. It is supposed to be used to fund the ongoing military operations in Iraq and Afghanistan. Yet under the Price budget, it appears a portion of the money would go to the Pentagon to fund programs normally accounted for in the budget. 

Price’s budget sees a U.S. in which the social safety net is failing those it’s supposed to help, largely because of the hubris of the federal bureaucrats running it. 

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There’s a place for safety net programs, he allows. However: “Our charge is to address these challenges in a way that is compassionate and constructive – mindful of the fact that Washington does not hold the answer to every question. Government must respect its limits.” 

The Price budget consolidates many existing social programs, pushing them down in large part to the states. Most notably, the Supplemental Nutrition Assistance Program, commonly known as Food Stamps, becomes a state-level program funded by federal grants.

Finally, in Price’s view (though he’s hardly the first to say this), Washington is a hotbed of waste, fraud and abuse, enabled by an unaccountable government.

“All of Washington ought to face scrutiny – every department, agency and program,” the proposal says. “And once tax dollars are sent out the door, there ought to be in place a system to better track the efficiency and effectiveness of the initiatives being funded. More accountability from departments and agencies means a government that’s more respectful and responsive to the needs of its people.”

Related: America’s 21st Century Challenge: Restoring Confidence in Government

Price’s Democratic counterpart on the Budget Committee, ranking member Chris Van Hollen (D-MD), said in a statement Tuesday, “Congressional Republicans have been quick to pay lip service to wanting to help working families – but this budget means that Americans who are working harder than ever will be getting even less. 

“It does nothing to boost the paychecks of working Americans and makes it harder to buy a home,” added Van Hollen. “Students will see deep education cuts and college will be less affordable. And this budget takes away the tools that allow people to climb the ladder of opportunity.” 

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