House Republicans on Tuesday unveiled a fiscal 2014 budget that would overhaul the tax code without raising new revenue, slash federally-funded high-speed rail, repeal President Obama’s healthcare law, and cut domestic programs.
Ultimately the 91-page proposal, “The Path to Prosperity: A Responsible, Balanced Budget,” would balance the federal budget in 10 years by cutting spending by $4.6 trillion and avoiding tax hikes, Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, told reporters at a press conference in the Capitol.
“Unless we change course, we will have a debt crisis. Pressed for cash, the government will take the easy way out: it will crank up the printing presses. The final stage of this intergenerational theft will be the debasement of our currency,” the GOP said in its budget document.
One key tenant of the budget paves the way for comprehensive tax reform and accommodates the forthcoming work by House Ways and Means Committee Chairman, Rep. Dave Camp of Michigan. It would repeal the alternative minimum tax, establish a two-tier tax rate for individuals at 10% and 25% and eliminate or limit tax breaks.
Camp released a discussion draft for small businesses Tuesday afternoon, his third tax reform discussion draft. The previous ones proposed reforms for international taxes and financial products. Camp and ranking minority member Rep. Sandy Levin, D-Mich., recently created 11 bipartisan working groups to examine the entire tax code and provide recommendations to the committee by mid-April.
The Ryan budget plan also counts the $600 billion of new taxes that were passed as part of a year-end “fiscal cliff” deal.
“We are not going to refight the past because we know that is behind us,” Ryan said at the press conference.. “So what we are showing here is that with the fiscal cliff and all of the other things that have occurred in the past, which spending is going down in this baseline as well, that clearly makes it easier to balance the budget. And what we are saying is let’s replace this anti-growth tax code, this crony capitalism, special interest ridden, loophole tax code with a pro-growth tax code that helps families and businesses.”
The plan would reduce the federal deficit from $845 billion this year to $528 billion in 2014. The deficit would then drop to $125 billion in 2015 and become a $7 billion budget surplus in 2023. Ryan would also cut domestic spending from 22.9% of gross domestic policy to 19.1% by 2023.
The budget leaves in place sequestration, the $85.3 billion in automatic, across-the-board federal budget cuts that went into effect on March 1 and goes through Sept. 30. It would give reconciliation instructions to nine committees to each produce legislation that would reduce the deficit by at least $1 billion. These instructions would represent a placeholder for negotiations with the Senate, according to the budget document.
Reconciliation allows Congress to give expedited consideration to bills enacting spending, revenue, and debt policies contained in the budget resolution. To trigger these expedited procedures, the House and Senate must reach agreement on a budget resolution and then issue written instructions for committees to achieve specified amounts of savings.
On transportation, Ryan’s budget would eliminate federally funded high-speed rail projects which “should be pursued only if they can be established as self-supporting commercial services,” his proposal said.
“The threat to large, endless subsidies is precisely the reason governors across the country are rejecting federally funded high-speed rail projects,” the the budget document said.
The House GOP budget is likely to be dead on arrival for Democrats. Rep. Chris Van Hollen, D-Md., ranking minority member of the House Budget Committee, called the GOP proposal “totally lopsided” and “uncompromising.”
Van Hollen said Ryan’s budget undermines job growth, ends the Medicare guarantee and slashes “critical investments in our future while protecting tax breaks for special interests and the very wealthy.”
Several times during the press conference, Ryan said the GOP budget is an invitation to the president and congressional Democrats to work together and restore the regular budget process that has been thwarted over the past four years.
Ryan said he spoke with Obama the other day over lunch about reviving a regular budget process. Currently, the federal government is operating on a continuing resolution, which expires on March 27. Obama has not yet released his budget, which was due at the beginning of February. He is expected to release it next month, possibly on April 8.
The administration weighed in on the GOP budget, with White House Press Secretary Jay Carney saying both parties need to compromise and make tough choices in order to find a balanced approach to deficit reduction.
“The President believes that there is an opportunity for Democrats and Republicans to come together around a balanced plan to grow the economy and shrink the deficit by investing to create jobs, cutting wasteful spending, and strengthening programs like Medicare and Medicaid,” Carney said in a statement.
Meanwhile, Senate Budget Committee Chairman Sen. Patty Murray, D-Wash., briefed the Senate Democratic caucus and the president Tuesday afternoon on her budget plans.
Senate Democrats are expected to release their proposed fiscal 2014 budget on Wednesday and will hold hearings to markup and vote on the budget that day and Thursday. The plan is expected to include nearly $1 trillion in new revenue.
The president’s nearly hour and a half long lunch meeting with Senate Democrats included discussions of the federal budget, immigration, foreign policy issues and drones.
“He is very supportive of the path that we are moving down,” Murray told reporters after emerging from the meeting. “We have a very strong budget that we are putting forward that will do what the American public expects of us to do to make sure that we are creating a strong economy and dealing with our debt and deficit responsibly.”
Sen. Mary Landrieu, D-La, told reporters that the president took about six to seven questions during his lunch with the Senators.
The House Budget Committee has scheduled a vote Wednesday on the Republican plan.