Government & Politics

The GOP's Better Budget Battle

Tom Price's plan isn't perfect but it's a good start.

Jim Harrington · Mar. 18, 2015

Rep. Tom Price (R-GA) and the House Budget Committee on Tuesday proposed a budget that would balance in eight years. By comparison, Barack Obama’s $4 trillion budget would spend over $50 trillion in the next 10 years and never reach balance, even with all its tax increases.

“At the core of America’s character,” Price wrote in an op-ed for USA Today, “lies a founding belief that we as a people ought to always strive to build a better, more innovative, open and free society. When we look at America today, we see a nation that is not living up to its economic or leadership potential. … Washington has been unable or unwilling to tackle big challenges with positive solutions.”

The goal is not simply to reign in Washington’s spending, but also to free the country from the unnecessary eight years of recession that has killed the American dream for so many people. Even Joe Biden admits “the middle class is being killed.”

And Price cites the former chairman of the Joint Chiefs, Admiral Mike Mullen, who calls our national debt “the single biggest threat to our national security.”

The committee’s FY 2016 budget proposal for $3.8 trillion still leaves us shaking our heads over its immensity, but there are several good aspects that deserve support. For one, it doesn’t raise taxes. That’s always a good start.

The prescription for restoring the American dream, according to Price, is paying down the national debt, fundamentally reforming our tax system, reducing and eliminating unnecessary regulations and pursuing our own energy production. He’s right.

To reach a balanced budget, he would slash $5.5 trillion from status quo spending growth over the next decade, much of it from entitlement spending, and much would be saved on interest payments to the debt.

The most ambitious aspect of the plan is the repeal of ObamaCare, which would save $2 trillion over the next decade. The budget changes the way medical costs are paid for.

“We respect the principle of federalism in our budget by realigning the relationship the federal government has with states and local communities,” Price wrote. “From health care to education, states should be empowered to create their own solutions, free of onerous Washington mandates. The reforms we propose would save money, but, more importantly, they would allow us to find more effective means to achieve real results for American families.”

Critics complain the plan will gut Medicare, but Price promises that those already receiving Medicare – and those close to retiring – will receive or continue to receive benefits. In addition, the budget blocks ObamaCare cuts in doctor reimbursements that caused many doctors to reject Medicare as payment. Next month, doctors treating Medicare patients face a drastic cut in reimbursements, The New York Times reports, but reimbursement cuts to all medical facilities have been happening already thanks to ObamaCare. Obama’s pet program robs billions from Medicare every year – in fact, between 2013 and 2022, that theft is projected to reach $716 billion. The Republican plan could actually rescue Medicare from ObamaCare.

To further reduce spending, the budget goes after fraud in government agencies – good luck with that. The federal government is probably the champion time and money waster of all time, but nailing down a dollar value for government waste is nigh impossible. On the other hand, a reasonable estimate of fraud can be extrapolated from estimates regarding entitlement fraud. According to CBS News, Medicare fraud cost taxpayers $60 billion of its more than $550 billion budget in 2014. It’s very likely that all federal programs from the smallest to the largest, including defense – maybe especially defense, with private contractors chasing the government’s most expensive contracts – operate at about the same level of waste and fraud.

(As an aside, the Pentagon says it lost track of $500 million in weapons and equipment it gave to Yemen. How’s that for waste?)

Among the Republican caucus, the major sticking point is defense spending. Some conservatives are unhappy because Price’s plan exceeds the sequestration caps via contingency fund spending, and some hawks complain the proposal doesn’t spend enough.

The committee allocates approximately $523 billion to defense, which by the way is one of the few line items expressly enumerated in the Constitution. Price’s budget plan allocates another $90 billion for the Overseas Contingency Operations (OCO) fund, the “emergency” fund for war operations. Obama requested only $60 billion for that line item in his budget, and Rep. Mac Thornberry (R-TX) of the Armed Services Committee asked for only $51 billion.

Price’s budget, with all its splendid ideas – and several really are splendid – has a tough road ahead. Democrats won’t support it due to its entitlement cuts, Obama will veto it if it does pass and even Republicans will have a hard time agreeing on it. But at least it’s a budget. It’s more than the Democrats produced in Obama’s first five years.

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