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The Good, the Bad, and the Ugly of the House and Senate Budget Plans

With budgets on the floor of both chambers this week, here's a quick breakdown of the key points for the two main proposals:

House: Paul Ryan Budget (The Good) - H.Con.Res. 25

  • Balances in 10 years, and supposedly stays in balance in the out-years
  • Does not rely on budget gimmicks such as the projected reductions in war spending
  • Calls for fundamental tax reform
    • Two-tier flat (or flatter) tax (at 10% and 25%)
    • Gets rid of Alternative Minimum Tax
  • Repeals ObamaCare entirely
  • Block-grants Medicaid and Food Stamps to the states
  • Reforms Medicare for those under 55 by offering optional premium support

House: Paul Ryan Budget (The Bad)

  • Relies on current levels of taxation in order to balance, which means:
    • Keeps revenue raised by ObamaCare Taxes
    • Keeps revenue from both the payroll tax hike and the tax increases on the rich from January’s Fiscal Cliff debacle
  • Does not offer seniors the choice to opt out of Medicare
  • Does not touch Social Security reform
  • Cuts some spending, but does not eliminate any major departments or agencies

Senate: Patty Murray Budget (The Ugly) - S.Con.Res. 8

  • Raises taxes by $975 billion, supposedly by closing personal and corporate loopholes
  • Sets aside $100 billion for infrastructure spending – essentially stimulus funds
  • Claims to cut $1.8 trillion spending, but:
    • Actually eliminates sequester “savings”, which reduces cuts by a trillion
    • Also counts “savings” from reduced war spending (which aren’t really savings)
    • Counts $275 billion in savings from cutting “waste” in health care spending, without defining how those savings will materialize.
    • Actually increases overall spending in its first year.
  • Never balances (still accounts for hundreds of billions in deficits ten years from now)

The Conclusions: Ryan's budget successfully balances in 10 years, and otherwise maintains the best features of his previous budgets.  However, he balances the budget on the backs of the massive tax increases enacted by President Obama in 2013, which places a bit of an asterisk on his 10-year number.

The Senate Democrats' budget completely misses the mark, massively increasing taxes and continuing to run 12-figure deficits in perpetuity.  By that reckoning, it may be that the Senate budget is actually worse than no budget at all.

These two budgets are the main players, but stay tuned for updates on other proposals, including from the Republican Study Committee in the House and from Senator Rand Paul in the Senate.

Louis Gilfedder

I Will tell you what a business man would do,take all none essentials out of the budget,fire them and make them get real jobs,that's the EPA the Dept of Education,and the IRS,none of this is a needed organization,they were put in place to bully the American people that sums it up in one word,usurping your freedoms.If America wants to rebound you will definitely have to get our Senate majority in the conservative side and denounce these socialists. That's where 2014 we can eliminate any Lib media driven politicians and take the Senate then the POTUS has no choice.

slwoodward's picture
Scotty Woodward

stone stone has a point. The federal government should not cut spending. You should never cut spending when you're broke. Duh! Instead you should raise taxes and take more money from others. But hold on, if you take money from others, those others will have less money to spend therefore they will have to cut their spending. But stone stone doesn't want anyone to cut spending. Hmm, what a conundrum. Wait. That's odd. stone stone didn't have an argument supporting the Patty Murray "budget" plan. stone stone only had criticism and snide remarks for the GOP. Oh I see. stone stone must be the typical liberal.

What stone stone, along with every other genius liberal are just too smart to realize is, when a society fails due to a greedy, corrupt and irresponsible government, no one is immune. Everyone suffers. And it trickles up. The common people are the first to feel it. That includes stone stone and his liberal buddies. Eventually it reaches the top. Just look at what happened to Saddam Hussein. A greedy, ruthless dictator, who thought he was invincible, was eventually reduced to taking residence in a hole under a mud shack. Karma’s a bitch! But hey, hope and change, right?!

lheal's picture
Loren Heal

They need to budget one year at a time.

stonestone's picture
stone stone

The house "plan" is more or less a nice piece of fiction. First of all, Obamacare is here to stay and so you might as well take that off the table. Now. Secondly, the GOP lives in a land of make believe where somehow you can run a government without ANY revenue and somehow magically conjure up money out of thin air, or as they put it- cutting spending, which seems to be the ONLY plan they ever seem to have anyway. There is a good reason the GOP lost in November and will continue to do so in the future: They are out of touch, and have no real ideas.