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Previewing the House GOP Budget Plan

Updated 7:45pm EST. 

The House Budget Committee is moving forward with a 2018 budget plan that will set a fiscal framework for budget, tax, and appropriations bills to follow and for years to come. The budget resolution may well lay out a harsh long-term vision that will mean a further weakening of health care; far less help to families struggling to afford the basics; and disinvestment from areas ranging from education and job training to scientific research and environmental protection. That is because, like past budget resolutions, the plan will likely feature trillions of dollars in cuts in basic assistance for low-income families and programs that expand opportunity and promote economic growth. At the same time, the budget will continue to call for “tax reform,” which — based on past proposals from House Republicans and the Trump Administration — would likely mean large tax cuts skewed to the top.

This mirrors what House Republican budgets have proposed since 2011, but those were messaging documents — Republicans knew that President Obama would not allow this vision to be enacted. With Republicans now in charge of the White House and Congress, this budget should be viewed as a governing document for fulfilling House Republican leaders' broad and harsh vision.

And, this budget will include a fast-track process to take another step (along with the bill to repeal the Affordable Care Act, or ACA) toward this broader Robin-Hood-in-reverse agenda. The House budget is expected to muscle through part of this agenda via the “budget reconciliation” process, which wouldn’t require a single Democratic vote for passage. This is the same process that Republican leaders are using in their attempt to repeal the ACA. Thus, the budget will potentially fast-track harsh cuts to programs aiding low-income families and individuals on top of the fast-tracked cuts in the House and Senate health bills, which would cause many millions of people to lose coverage and leave many more with skimpier or less affordable coverage.

Similarly, the large tax cuts that the budget likely will fast-track for corporations and very high-income people would come on top of the sizable tax cuts that these corporations and people already would receive under the House GOP health bill. So, at a time when income and wealth are intensely concentrated at the top, the budget would grease the legislative wheels to adopt policies that would widen inequality.

In assessing the budget resolution, the following key points deserve consideration.

  • The House Budget Chair’s language justifying potentially $200 billion in fast-tracked entitlement cuts is highly misleading. As discussed here, the argument that such cuts would be modest relative to the size of entitlement programs — requiring an across-the-board reduction of only 1 percent — and that such programs drive the national debt, misses several important points.

    First, the cuts will not be spread evenly across programs, and some of the programs that would be cut would likely face deeper, more harmful cuts. Changes to programs serving low- and moderate-income people could hit vulnerable populations hard.

    Second, the budget will likely embrace a plan calling for dramatically deeper entitlement cuts over time outside the reconciliation process. In other words, any reconciliation cuts (along with the ACA repeal bill) would constitute just initial steps towards the budget’s broader fiscal vision.

    Third, the main drivers of the growth in entitlement spending are the aging of the population and rising costs throughout the entire U.S. health care system, not program expansions. In fact, outside of health care, entitlement programs for people with low and moderate incomes are projected to fall to their average level as a percent of the economy over the past 40 years by 2020 and to continue falling thereafter.

    Fourth, if one is talking about budgetary factors that contribute to rising deficits and debt, tax cuts are among them.  The Bush era tax cuts, for example, are increasing deficits over the coming decade by several trillion dollars.

  • Some members of Congress will likely try to sugarcoat painful cuts by falsely labeling them as “welfare reform.” As discussed here, in recent weeks both President Trump’s budget and House Freedom Caucus members have called for sharp and damaging cuts in programs such as SNAP (food stamps) while labeling such cuts as “welfare reform.” For example, the President’s budget proposes significant SNAP cuts (whose benefits average only $1.40 per person per meal) that would undermine the national commitment to providing such basic food aid no matter where a poor child might live. At the same time, the Administration argues that these cuts will entice more people to get more jobs. But the President isn’t proposing to expand or improve access to the job training or child care that many low-wage working parents need to work or to attend job training; to the contrary, he’s proposing to cut such programs, often deeply. Similarly, as a forthcoming CBPP paper will discuss, Freedom Caucus proposals that their proponents mislabel as work requirements are poorly designed and entirely unfunded and would likely result in states restricting access to needed aid, not more people getting the help they need to find jobs.
  • Fundamentally altering one of the few areas of bipartisan consensus in recent years, the budget will propose to raise defense while cutting non-defense discretionary (NDD) programs, further hurting already hard-hit non-defense programs. As discussed here, for several years running, Republican and Democratic policymakers have agreed that the 2011 Budget Control Act’s (BCA) funding limits are too tight for both defense and non-defense programs, and agreed to provide the same amount of relief for both categories. But for 2018, House Republicans are proposing to increase defense funding by $72 billion while cutting NDD funding by $5 billion, relative to the BCA sequestration limits.

    NDD funding would hit its lowest level, as a share of the economy, on record in data that go back to 1962. Further, relative to 2017, NDD programs outside of the Department of Veterans Affairs (which is part of the NDD budget and has already received a funding increase for 2018) would be cut by $22 billion after adjusting for inflation. These programs would fall more than one-fifth below their 2010 level, after adjusting for inflation, leaving critical investments in our nation’s current and future workforce, scientific advancement, environmental protection, and basic public services significantly underfunded.