House Republicans want to cut federal spending — and they just dopassed a billthat would do it.
But they don't want to cut defense spending.
They don't want to cut veterans' health care costs.
They don't want to cut Medicare or Social Security.
The bill, which would raise the nation's debt limit by one year in exchange for a decade of austerity, does not include many details. It gets most of its savings from spending caps on discretionary spending — the part of the budget allocated annually by Congress that isn't automatic like Social Security payments — but it doesn't say which discretionary programs to cut and which to save.
Budget cuts in the G.O.P. Flat
The bill's limits on discretionary spending would result in ever-increasing cuts each year, starting with a 13% reduction in 2024.
2.0 trillion dollars
2.0 trillion dollars
Source: Responsible Federal Budget Commission Note: The figure shows the basic discretionary budget authority, which does not include emergency spending. The New York Times newspaper
If the entire discretionary budget were subject to cuts, the reductions would be "aggressive" but "achievable," he said.Marc Goldwein, senior political director atCommittee on a Responsible Federal Budget, which advocates deficit reduction.
But if favored programs are protected, cuts elsewhere will be much deeper and harder to implement. "It goes from an achievable goal to one that would be very difficult to achieve," he said.
The White House wasattackerRepublicans to propose cuts to veterans' care. Republicans in the House of Representatives respondedno cut is calculated. House Speaker Kevin McCarthy promised itwill protectthe military from the reductions, although the bill as written does not exclude them. And Kay Granger, chairwoman of the House Appropriations Committee, said border securityremains a priority.
The bill is McCarthy's first major move in negotiations over the debt ceiling, which he has argued should be tied to cuts in federal spending to lower future debt, although there is no legal reason to do so. If Congress does not raise the limit on how much the country can borrow to pay its existing billsby1 June, the Treasury may be forced to default on its bonds, one of the mainstays of the global economy. President Biden wants Congress to raise the debt limit without any strings attached, saying he is willing to talk about the budget but not under threat of default.
Sir. McCarthy is scheduled to meet with Mr. biteon Tuesdayin the White House.
How deep the spending cuts can be
The funding caps in the House Republican bill would reduce discretionary spending by an average of 18% over the next decade. But if three major programs remain untouched, the remaining areas must be halved.
Source: Analysis of Congressional Budget Office data by Bobby Kogan, Center for American Progress Note: The figure shows total discretionary budget authorities for 2024-2033. The New York Times newspaper
The charts above show how exempting large categories of spending would make the budget limits more draconian. Universal discretionary caps would reduce spending by an average of 18% over a decade compared to what would be expected if current levels grew in line with inflation. But excluding defense, veterans care and homeland security, the caps would cut the rest of the discretionary budget by more than half.
Defense is the largest discretionary expenditure category in the budget. Veterans Health Care is the second largest.
Programs that would be subject to deeper cuts include nutritional assistance for poor mothers and babies, air traffic control, the State Department, cancer research and Social Security Administration employees. These are initiatives that many Republican lawmakers and voters appreciate.
The graphs spread the remaining cuts evenly across the rest of the government to show a simple way of applying them. But the actual decisions on how to apply the cuts would rest with lawmakers in the appropriations committees, who could divide the cuts as they agreed.
"It's easy to write budget caps," said Bobby Kogan, senior director of federal budget policy at the left-leaning Center for American Progress and a former Senate and White House budget official who reviewed the bill and provided data to some of our. graphics. "It's hard to really legislate what you have to cut to live within those budget limits."
Steve Womack of Arkansas, a Republican who chairs the House Appropriations Subcommittee on Financial Services, told Congressional Quarterly last month that he was concerned that too many exclusions would make spending bills difficult to write and pass.
When Congress faced a similar challenge a decade ago — legislative budget caps without specific instructions — it passed annual legislation to raise the caps and spend more than allowed.
"I think the budget caps made a real difference," said Roy Blunt, a former Republican senator who was on the Appropriations Committee during the period. He said the limits forced lawmakers to identify priorities, even if they weren't followed. “They always gave us a starting point,” he said.
Budget caps aren't the only changes in the current House bill that would reduce federal spending. There are also policy changes to Medicaid and the nutrition program, sometimes called food stamps, that would require users to document their work hours each month or lose their benefits. The bill would cancel some tax credits for green energy that Congress passed last year. It would block the Biden administration's policies to forgive student debt. It would reduce IRS tax collection expenses, a change that budget analysts say would actually widen the deficit by reducing tax collection.
What else is in the G.O.P. Flat?
The Congressional Budget Office estimates the bill would save a total of $4.8 trillion over 10 years, including interest.
Agency spending limits granted by Congress
3.2 trillion dollars
Energy tax deduction
Repeal credits in the Inflation Reduction Act
540 billion dollars
Block Biden administration plans to cancel debt
460 billion dollars
Medicaid, SNAP (food stamps), and TANF
Expand the job requirements
120 billion dollars
Cancel unused funds
30 billion dollars
Energy regulatory reforms
3 billion dollars
I.R.S. tax foreclosure auction
Budget cuts would reduce tax collections and reduce savings elsewhere in the bill
– 120 billion dollars
Sources:Committee on a Responsible Federal Budget; Congressional Budget Office Note: TANF refers to the Temporary Assistance for Needy Families program. The New York Times newspaper
Almost everything on that list is unacceptable with Democrats in the Senate and Biden's White House. Energy policies were the cornerstone of the Inflation Reduction Act, an important and hard-won piece of legislation. The job requirement would undermine its goal of expanding health insurance coverage to more Americans who qualify for federal programs.
Even some Republicans who voted for the bill last week expressed discomfort with supporting cuts to energy credits that help fund projects in their congressional districts. Oneanalysis published by the nonpartisan Tax Policy Centerfound on Wednesday that repealing the energy credits would result in modest tax increases, especially for high-income families.
The dispute among Republicans over what to protect against budget caps is a smaller version of the broader challenge Republicans have faced in their efforts to reduce the federal deficit. To win the presidency, McCarthy promised lawmakers that he would propose a plan to balance the federal budget within 10 years, a goal that would require far greater changes than those contained in the current bill. But that plan began to look unlikely when McCarthy took many of the government's biggest programs off the table.
If Congress isn't willing to mess with Medicare, Social Security, or military spending — and isn't willing to raise any taxes — the budget balancesrequire major cutsto the rest of the government.
This package, with its more modest budget ambitions, appears to be an acknowledgment of the difficult math. But with all the promised exclusions, it still seems to require major cuts in popular government functions. INMapfor Rosa DeLauro, the top Democrat on the House Appropriations Committee, agency leaders outlined the changes they would need to make in 2024 to absorb a 22% cut, assuming Republicans will protect military spending but enforce budget caps for veterans.
• Federal Aviation Administration to close125 air traffic control towers.
• Cuts to the Women, Infants and Children Nutrition Program would eliminate food aid to1,2 miopoor Americans with young children.
• Pell concessionswould drop $1,000, and be completely eliminated for 80,000 students.
• Two million families would lose access to medical care at local health centers.
• F.B.I. must reduce its stafffor 11.000employees.
• Claims processing at the Social Security Administration would beslow for months.
• Reductions in the Head Start program would mean openings for200,000 fewer children.
• NASA would needstop the Artemis programsend more astronauts to the moon.
If Veterans Affairs and Homeland Security were also protected from cuts, those programs would have to be cut by a good 22%.
How the plan would affect debt
The bill would slow the growth of the federal debt as a share of the economy over the next 10 years.
The House Republican plan
Sources:Committee on a Responsible Federal Budget; Congressional Budget Office The New York Times newspaper
Together, the package would reduce federal deficits over the decade, and come close to stabilizing the ratio of total federal debt to the size of the economy, a long-term goal embraced by many economists.
But most of the bill's finances come from the caps, meaning Congress must actually implement them to achieve this result. Given McCarthy's many promises to his colleagues, it seems hard to imagine even if he could somehow persuade the Democratic Senate and White House to pass the bill.
What role does the president play in developing the federal budget? ›
The president submits the budget proposal to Congress early the next year. Proposed funding is divided among 12 subcommittees, which hold hearings. Each is responsible for funding for different government functions such as defense spending or energy and water.What is the GOP deficit plan? ›
On Wednesday the speaker unveiled a plan that he said would trim more than $4 trillion from deficits over the next decade, largely by freezing discretionary spending at 2022 levels and increasing them by just 1% a year thereafter.What is the budget process in government? ›
The president submits a budget to Congress by the first Monday in February every year. The budget contains estimates of federal government income and spending for the upcoming fiscal year and also recommends funding levels for the federal government.What does the budget of the US government represent? ›
The United States budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies.