House and Senate Release Competing Budget Plans

This week the House and Senate Budget Committees released their proposed Fiscal Year 2014 budget resolutions.  The two versions offered by House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA) highlight the stark differences between the two parties on how to reduce the federal deficit.

Ryan’s plan in the House would not raise any new revenue from taxes and would in fact lower the top income tax bracket to 25%.  Instead it relies exclusively on spending cuts to bring the budget back into balance.  His resolution would cut $5 trillion over the next 10 years from domestic spending accounts, including $2.7 trillion from health care.  The health care cuts come primarily from his proposal to transform Medicaid into a block grant to states and to repeal the Affordable Care Act, both of which he has suggested in the past.  It is estimated that these health cuts would result in up to 40-50 million Americans losing health insurance, according to the Center on Budget and Policy Priorities.  The House budget would also block grant and cut the food stamp program and impose new work requirements on recipients as well as cut child nutrition program.

Meanwhile Senator Murray’s plan uses a mix of spending cuts and revenue increases to reduce the federal deficit, albeit less aggressively than the House version.  The Senate budget cuts $493 billion from domestic programs over the next decade and cuts spending overall by $975 billion.  It also raises $975 billion in new revenue through changes to the tax code.  These savings are used to replace the harmful sequester that went into effect earlier this month, something that the Ryan plan leaves in place.  Murray’s resolution also provides meaningful increases for child care and the home visiting program.

The House budget passed out of the Budget Committee this week and should hit the House Floor next week, where it is expected to pass.  Likewise the Murray budget passed out of the Senate Budget Committee this week and debate on it by the full Senate is expected to commence next week.  Both budgets passed on strict party-line votes and will have a hard time attracting bipartisan support, further demonstrating the continuing gulf between the two parties on budget issues.

*** On Thursday, March 21st the House passed the Ryan budget on a 221-207 vote and on Saturday, March 23rd the Senate passed the Murray budget 50-49.  It is unlikely that the differences between the two will be reconciled any time soon, so Congress is expected to pivot to the 2014 appropriations process soon without enacting a budget that can pass both chambers.