GOP proposes $3.8 trillion budget

House plan beefs up overseas operations, changes Medicare

Rep. Tom Price, R-Ga., chairman of the House Budget Committee, displays a synopsis of the House Republicans’ 10-year budget plan Tuesday in Washington. The plan backs strong military spending, partial privatization of Medicare and deep cuts in other social programs with the aim of balancing the budget by the end of the decade.
Rep. Tom Price, R-Ga., chairman of the House Budget Committee, displays a synopsis of the House Republicans’ 10-year budget plan Tuesday in Washington. The plan backs strong military spending, partial privatization of Medicare and deep cuts in other social programs with the aim of balancing the budget by the end of the decade.

WASHINGTON -- House Republicans offered a 10-year budget plan Tuesday that would favor the Pentagon, partially privatize Medicare and rely on deep cuts in other social programs to help wipe out deficits at the end of a decade.

photo

AP

House Budget Committee Chairman Rep. Tom Price (left), R-Ga., listens as committee Vice Chairman Rep. Todd Rokita, R-Ind., announces the Republican budget proposal Tuesday on Capitol Hill in Washington.

A little more than four months after winning their largest congressional majority in 70 years, Republicans promised an overhaul of the federal tax code and called for the repeal of two of the top legislative achievements of President Barack Obama's tenure: the health care law and a measure enacted to crack down on Wall Street after the economy's near-collapse in 2008.

Republicans said their balanced-budget promise came with no tax increases, though the fine print assumes the expiration of about $900 billion in breaks for business research and development, and other items.

"The new normal of slow economic growth and low expectations is unacceptable. We know we can do better," the House Budget Committee, chaired by Rep. Tom Price of Georgia, said in a report accompanying the proposal.

It promised "greater prosperity, opportunity, security and freedom" if enacted.

Projected spending for the budget year that begins Oct. 1 was $3.8 trillion, rising to $5 trillion in 2025.

Obama countered Republican claims instantly. He said the GOP prescription "is a failure to invest in education, infrastructure and national defense -- all the things we need to grow, to create jobs, to stay at the forefront of innovation and to keep our country safe."

The president's own budget calls for about $2 trillion over 10 years in higher taxes on corporations, wealthy individuals and smokers as part of a plan to increase spending and give tax breaks to the middle class.

Senate Republicans intend to outline their own plan today, and each house is expected to ratify its own version next week. After that comes the challenge of forging a compromise between the two versions and then translating the policy objectives into legislation that would be sent to Obama.

The House budget relies heavily in some areas on previous plans put together by Price's predecessor as committee chairman, Rep. Paul Ryan of Wisconsin.

It also adapts to changing political circumstances, most notably by offsetting a looming automatic budget cut in national security accounts.

The proposal would allow spending in the coming budget year of $36 billion more than Obama recommended for overseas military and diplomatic efforts. Less than half of the $36 billion would be guaranteed, and the rest would depend on offsetting spending cuts elsewhere in the budget.

Some Republicans and outside groups bristled at the prospect of so large an increase, tucked into the budget in an account for overseas operations that is not subject to spending caps designed to hold down deficits.

"I'm tired of seeing gimmicks in the budget process," said Rep. Justin Amash of Michigan, a conservative and frequent critic of his party's leadership.

At the same time, the added funds could gain support for the budget from pro-Pentagon lawmakers for whom military spending is a top priority.

As in prior budgets, the House GOP budget calls for transforming Medicare into a voucherlike program for senior citizens who join the health care program beginning in 2024. They would receive a subsidy to purchase coverage, a step Democrats say would effectively end the current guarantee of services pegged to a predetermined level.

In all, Republicans said they would cut spending by nearly $5.5 trillion over the next decade.

By far the largest portion of that, $2 trillion, would come from repeal of the health care law that the administration said last week has meant coverage for 16.4 million previously uninsured people. Republicans have pledged a replacement health plan but so far have offered no specifics.

An additional $900 billion would come from other health care programs including Medicaid, which provides health care for people with low incomes. As in prior years, Republicans proposed transforming Medicaid and food stamps into state-run programs that receive lump sum funding from the U.S. Treasury.

An estimated $1 trillion in savings would come from other benefit programs, but the committee detailed none of them.

Much of the balance of the savings would be derived from general government programs that have borne the brunt of other deficit-cutting efforts in recent years and from lower interest costs resulting from a decline in projected deficits.

Yet Republicans also estimated an additional $147 billion in tax revenue if their policies were enacted, an amount that allows them to project modest surpluses in 2024 and 2025.

Information for this article was contributed by Stephen Ohlemacher of The Associated Press.

A Section on 03/18/2015

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