A new White House fact sheet has blown the House Republican budget to bits ...
Just The Facts: The White House Fact Sheet On The House Republican Budget:
With more than 12 million private-sector jobs created over the last 60
months, it is clear that the President’s middle class economic agenda is
working. But instead of taking the steps we need to strengthen the
standing of working families, the House Republican budget for fiscal
year (FY) 2016 would return our economy to the same top-down economics
that has failed us before. The Republican budget cuts taxes for
millionaires and billionaires, while slashing investments in the middle
class that we need to grow the economy, like education, job training,
and manufacturing. The Republican proposal stands in stark contrast to
the President’s FY 2016 Budget, which would bring middle class economics
into the 21st Century.
The President’s Budget builds off the progress we’ve
made and shows what we can do if we invest in America’s future and
commit to an economy that rewards hard work, generates rising incomes,
and allows everyone to share in the prosperity of a growing America. It
lays out a strategy to strengthen our middle class and help America’s
hard-working families get ahead in a time of relentless economic and
technological change. And it makes the critical investments needed to
accelerate and sustain economic growth in the long run, including in
research, education, training, and infrastructure.
House Republicans have chosen different priorities.
Yet again, they are seeking to balance the budget on the backs of the
middle class, while cutting taxes for the wealthy and well-connected.
House Republicans still won’t say where close to $1 trillion of their
spending cuts come from. But they are clear that their budget would
continue the harmful cuts known as sequestration in 2016, threatening
economic growth, cutting programs middle-class families count on, and
attempting to fund national security through irresponsible budget
gimmicks. Their budget slashes domestic investments that support
middle-class even more significantly after 2016, along with programs
that serve the most vulnerable Americans. It would end Medicare as we
know it, transforming it from a guarantee seniors can count on into a
voucher program. And, despite the more than 16 million Americans who
have health insurance today as a result of the Affordable Care Act
(ACA), it yet again proposes to repeal the law’s coverage expansions.
The choice could not be more clear and the
consequences more stark. Thanks to President Obama and the resilience of
the American people, the economy is growing again. The Republican
budget would put that growth at risk and limit opportunity for the
middle-class and those seeking to join it.
In a budget that claims to be fiscally responsible,
House Republicans start by promising large tax cuts for the wealthy and
big corporations. Among the few specific tax proposals in the House
Republican budget is a promise to spend hundreds of billions on
high-income and business tax cuts, with up to trillions more in
unspecified high-income and corporate rate reductions. The proposals
they specify would cut the tax bill of the average millionaire by more
than $50,000, before even adding the proposed cuts to tax rates.
Meanwhile, the House Republican budget does nothing to prevent a tax
increase on 26 million working families and students. And in the past,
they have made clear they would let this tax increase happen – raising
taxes by an average of $900 apiece for 16 million working families and
by $1,100 for 12 million families and students paying for college.
Because House Republicans refuse to ask millionaires
and billionaires to pay their fair share or to raise a single dollar of
revenue, their budget relies on the same, failed top-down economics as
in previous years. Specifically, it would:
• Cut investments in the middle class by
maintaining sequestration funding levels. Under the House Republican
budget, both non-defense and base defense discretionary funding in 2016
would be at the lowest real levels in a decade. Investments in the
middle class would be heavily impacted: real preK-12 per pupil education
funding would fall to its lowest levels since 2000, and real R&D
funding would fall to its lowest level since 2002, except when large
sequestration cuts also took effect in 2013. Compared to the President’s
Budget, the Republican budget would result in: [1]
◦ 35,000 fewer children on Head Start.
◦ $1.2 billion less in Title I education
funding, enough to fund 4,500 schools, 17,000 teachers and aides, and
1.9 million students.
◦ $347 million less in IDEA funding, an amount
that could support up to 6,000 special education teachers,
paraprofessionals, and other related staff.
◦ More than 2 million fewer workers receiving job training and employment services.
◦ Elimination of the Manufacturing Extension
Partnerships, which serve 30,000 small manufacturers that contribute to
the creation of middle-class jobs and economic growth.
◦ 1,300 fewer medical research grants at NIH.
◦ 950 fewer competitive science research awards at the NSF, affecting 11,600 researchers, technicians and students.
◦ 133,000 fewer families receiving Housing
Choice Vouchers, and another 20,000 fewer rural families receiving help
for affordable rental housing.
◦ Fewer community-based services for seniors,
including approximately 500,000 fewer rides to doctors and grocery
stores, approximately 200,000 fewer hours of assistance for seniors
unable to perform activities of daily living, and approximately 100,000
fewer hours of care for dependent adults.
◦ 3,500 fewer low-income homes achieving annual energy cost savings through residential energy retrofits.
Meanwhile, as a wide range of national security
experts ranging from former Secretary of Defense Robert Gates to
Ambassador John Bolton have pointed out, locking in sequestration for
defense would undermine our readiness and efforts to secure
technological superiority for U.S. forces in future conflicts. Instead
of providing a plan to appropriately fund our national security, House
Republicans try to have it both ways on defense funding – maintaining
sequestration and then using overseas contingency operations funds
intended for wars and not subject to budget caps to fund the day-to-day
operations of the Pentagon. This is both bad budgeting and harmful to
military planning — Senator John McCain has called it a “gimmick” and
former House Budget Chairman Paul Ryan referred to it as treating
overseas contingency funding as a “slush fund.”
• More than doubles cuts to middle class
investments starting in 2017. In 2017, the House Republican budget more
than doubles its cuts to these investments, and the cuts grow even
deeper after that. The budget hides these deep cuts in later years to
mask their effects. But if non-defense discretionary funding were cut 12
percent below sequestration levels in 2016 – the cut the Republican
budget would make in 2018 – it would mean the following compared to the
President’s Budget: [2]
◦ More than 157,000 children would lose out on access to Head Start services.
◦ More than 4 million workers would lose out on job training and employment services.
◦ Title I education funding would be $2.7
billion lower, enough to fund about 10,000 schools, 38,000 teachers, and
aides, and 4.2 million students.
◦ IDEA funding would be nearly $1.6 billion
lower, an amount that could support up to 26,800 special education
teachers, paraprofessionals, and other related staff.
• Take away health insurance from more than 16
million people who have gained coverage under the Affordable Care Act.
The Affordable Care Act is working. Thanks to its coverage provisions,
the share of Americans without health insurance is at or near historic
lows – and these provisions are costing almost one third less than the
Congressional Budget Office (CBO) initially projected. Almost exactly
five years after the ACA was enacted into law, Republicans will be
voting for the more than 50th time to repeal these provisions. Beyond
the effect on the millions who have gained health insurance coverage
through the ACA Marketplaces or through Medicaid, the House Republican
Budget would:
◦ Deprive up to 130 million Americans with
pre-existing conditions of the security of knowing they will still be
able to buy affordable health coverage if they lose their jobs or
otherwise lose their health insurance;
◦ Deny millions of young adults of the option
to stay on their parents’ plans if they re-enroll in school or get a job
without health coverage; and;
◦ Increase prescription drug costs for more than 4 million seniors and people with disabilities.
• Reaches its fiscal targets through unspecified
cuts and gimmicks, plus deep cuts to programs that serve the most
vulnerable. On top of its cuts to middle-class investments and the ACA,
the Republican budget calls for an additional nearly $2 trillion in cuts
to health, safety net, and other mandatory programs. For the fifth year
in a row, the budget declines to specify where almost $1 trillion of
these savings would come from. But the budget does single out a few
programs as the first places it would look to reduce the deficit:
◦ It eliminates mandatory funding for Pell
Grants and freezes the maximum grant at its current level, instead of
allowing it to increase to keep pace with inflation, and makes other
unspecified cuts to the program. Over time, this would reduce financial
aid for almost all of the more than 8 million students who rely on Pell
Grants to afford college.
◦ It block grants Medicaid, cutting resources
for Medicaid and the Children’s Health Insurance Program by more than
$900 billion, on top of the impact of repealing the ACA coverage
provisions. A Kaiser Family Foundation analysis of a similar proposal in
previous Republican Budgets found that as many as 20 million people
would be denied the coverage they would have gotten under pre-ACA
Medicaid.
◦ It cuts the Supplemental Nutrition Assistance
Program (SNAP) by about $140 billion over 10 years and in 2021 would
block grant the program, jeopardizing the more than 46 million Americans
who depend on it, the majority of them children, the elderly, or people
with disabilities. Research has shown that SNAP not only helps
families put food on the table, but it also has a positive long-term
impact on children’s health and education outcomes.
Since even these cuts leave the Republican budget
short of its fiscal goals, House Republicans get the rest of the way
there by policies such as:
◦ Declining to implement their own policies in
their budget. While claiming to “fully repeal Obamacare” and stripping
away health coverage from millions, the House Budget retains the ACA’s
savings, claiming they will replace the revenues through unspecified tax
reforms. And while House Republicans have voted to extend hundreds of
billions in business tax cuts without offsets, their budget adds up only
by assuming those measures would be paid for.
◦ Counting about $150 billion in deficit
reduction from highly uncertain “dynamic scoring.” Not only is dynamic
scoring uncertain in general, but the dynamic estimates of the
Republican budget take into account only its deficit reduction, not the
long-term economic costs of its cuts to research, education, and other
investments.
◦ Terminating the FDIC’s Orderly Liquidation
Authority. This authority was enacted to ensure taxpayer funds are never
again used to bail out ‘too big to fail’ financial institutions. And
though the House budget says it does “not rely on gimmicks or creative
accounting tricks”, the ‘savings’ from this termination are both,
because, by law, any costs of the program must be recouped from the
financial industry.
The Republican budget also proposes other policy
changes that generate little or no savings, but would have severe
consequences for seniors and the middle class. It would:
• End Medicare as we know it. For new
beneficiaries starting in 2024, the House Republican budget would end
Medicare as we know it by substituting guaranteed access to the
traditional Medicare program with a voucher program, increasing costs
for millions of seniors and forcing millions out of traditional
Medicare, risking a death spiral as private plans siphon off healthier
and less expensive beneficiaries. Beneficiaries would receive a
premium-support payment that may not completely offset the premium for
the Medicare plan of their choice (either a private plan or the
traditional Medicare program). As CBO and numerous outside analysts
have found, under a voucher system healthier, lower-cost Medicare
beneficiaries would be more likely to enroll in private plans.
Meanwhile, traditional Medicare would increasingly be left with sicker,
more expensive beneficiaries.
• Undercut important consumer protections. In
addition to cutting services and aid for the most vulnerable, the House
Republican budget calls for rolling back key aspects of Wall Street
Reform, while underfunding the agencies working to implement it. It
terminates mandatory funding for the Consumer Financial Protection
Bureau (CFPB), greatly limiting the independence of this watchdog for
the rights of consumers. In the process, the House budget gains
‘creative accounting’ savings by shifting CFPB funding to
appropriations. In addition, it risks returning us to the days of “too
big to fail,” protecting Wall Street firms from important regulatory
safeguards and putting ordinary citizens and the economy at risk.
• Do nothing to address our Nation’s crumbling
infrastructure. The President has put forth a detailed plan to make
significant investments in repairing and modernizing our infrastructure,
paid for by closing specific loopholes that allow U.S. companies to
shift profits and jobs to tax havens as part of pro-growth business tax
reform. Not only does the House Republican budget lack a real plan to
address the looming insolvency of the Highway Trust Fund by establishing
an unspecified reserve fund “to provide for innovative thinking,” but
House Republicans’ extreme sequestration cuts put funding for successful
infrastructure programs like TIGER grants at risk.
The consequences of the Republican budget approach
for the economy and the middle-class are stark. The budget’s own numbers
show that its deep near-term spending cuts would reduce the size of the
economy by an average of 0.5 percent over the next three years, costing
hundreds of thousands of jobs. Its cuts to investments in education,
training, research, and manufacturing would have compounding effects on
the economy over time.
Instead of the same top-down economics that led to
the financial crisis, the President’s Budget invests in an economy that
puts the middle class first and cuts the deficit in a balanced way by
closing tax loopholes to ensure millionaires and billionaires pay their
fair share. Now is the time to strengthen the standing of working and
middle class families, not go back to the same failed Republican
top-down economics.
[1] Similar to the analysis of House Republican
budget cuts in 2016, the analysis of the 12 percent cut relative to
sequestration levels assumes an across-the-board reduction to the
enacted 2015 levels and compares to the President’s 2016 proposals.
[2]
Because the House Republican budget does not provide specific
discretionary program levels, this analysis assumes an overall nominal
percentage reduction in available non-defense discretionary funds of 1.5
percent below currently enacted 2015 levels, in order to account for
both sequestration and unavoidable cost growth in certain areas (such as
veterans’ medical care). This reduction is applied mechanically
across-the-board to all discretionary programs. To prevent cuts of this
magnitude in any specific program would require deeper cuts than
described in other programs.
