GOP offers $3.8T budget that boosts defense, cuts elsewhere

WASHINGTON (AP) – House Republicans on Tuesday unveiled a $3.8 trillion budget plan for next year that effectively breaks tight budget limits on military spending while promising a familiar roster of big cuts to social programs such as food stamps and Medicaid.

The plan by Budget Committee Chairman Tom Price, R-Ga., pads Pentagon and State Department accounts for overseas operations in Afghanistan and elsewhere by $36 billion above President Barack Obama’s $58 billion request for such spending, which is not bound by the return of automatic cuts next year.

In a statement, Price said the budget is the right solution as “our nation faces tremendous fiscal and economic challenges and, if nothing is done, a future of less opportunity and low expectations.”

Democrats sharply attacked the proposal.

“It will mean the end of the current Medicare guarantee, and millions of seniors in nursing homes will be especially hurt by the irresponsible cuts to Medicaid,” said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. He said it also includes “windfall tax cuts to the top 1 percent.”

The sleight of hand on defense spending has already raised the ire of conservative groups such as the Heritage Foundation and isn’t likely to win approval by the Senate. But it could clear the way with pro-Pentagon forces in the House GOP, which had made it clear they could not support a budget that promised less for the Pentagon than Obama’s request.

The overseas account, separate from the core defense budget, has covered the cost of two wars in Iraq and Afghanistan since the military campaign began in 2001. In recent years, the account has helped the Pentagon deal with cuts in projected defense spending.

At issue is an annual measure known as a budget resolution that sets broad goals for taxes and spending but requires follow-up legislation to actually implement the plan.

Years of experience have shown that lawmakers in both parties find it easy to promise spending cuts in nonbinding congressional budgets but rarely follow up in binding legislation. The last major effort to balance the budget was in 1997 and an all-GOP plan in 2005 to make very modest cuts to autopilot “mandatory” spending was almost a debacle. A modest bipartisan budget plan in 2013 eased some automatic spending cuts but cleared the table of the easiest replacement cuts.

House Republicans have shown no appetite to try to pass most of their controversial cuts and are showing no indication that this year will be any different, even though Republicans have claimed the Senate and the budget process offers the prospect of a filibuster-proof bill that could deliver budget cuts to Obama’s desk.

The latest plan by Republicans controlling the House also reprises sharp proposed cuts to the Medicaid program for the poor, food stamps and health care subsidies under so-called Obamacare. But it retains Obama health care program cuts to Medicare providers and higher taxes such as those on generous employer-provided “Cadillac” health plans.

Price’s plan, written in consultation with GOP leaders, borrows heavily from prior GOP budgets, including a controversial plan that would transform Medicare into a voucher-like program for seniors joining Medicare in 2024 or later. They would receive a subsidy to purchase health insurance on the private market.

The use of overseas military funds to skirt spending caps on the military, however, is a new feature. War spending is exempt from budget limits and the move would allow Republicans to use budget tricks to match Obama’s proposal to boost defense spending by $38 billion above current limits. That was a key demand of the party’s defense hawks.

Senate Republicans, GOP aides say, are likely to reject the move to radically reshape Medicare and are more reluctant to use war funds to help out the Pentagon.

“It’s a gimmick,” Senate Armed Services Committee Chairman John McCain, R-Ariz., said of padding war accounts.

Price is also replicating Ryan’s approach to cutting Medicaid and food stamps by proposing to transform them from federal programs into wholly state-run programs that receive lump sum funding from the government. That approach makes it easier to cut these programs without saying how many people would be dropped or how their benefits would be cut. But there’s little doubt that many elderly people whose Medicaid pays for nursing home care would be at risk, as would children above the poverty line who depend on the program.

To meet their promise to balance the budget within a decade, Republicans propose cutting $5.5 trillion from a federal budget that’s on track to total $50 trillion over that period. They also swallow up almost $1 trillion in higher tax revenues over a decade by assuming the expiration of popular tax breaks like the research and development tax break that are known collectively in Washington-speak as tax “extenders.”

The twin GOP budget plans will arrive as top lawmakers such as Speaker John Boehner, R-Ohio, are negotiating a $200 billion or so agreement that would permanently fix a flawed funding formula for Medicare physician payments – adding perhaps $140 billion to the deficit over 10 years – while at the same time the budget resolution will claim that the higher reimbursement rates for doctors will be “paid for” with cuts elsewhere in Medicare.

The Medicare “docs’ fix” illustrates a truism in Washington: It’s easy to vote for spending cuts when they’re only hypothetical but excruciatingly hard when they’re binding and take on powerful interest groups like health care providers.