Ryan budget would lower spending cap, exempt defense from automatic cuts

About half of the budget’s $2.5 trillion in 10-year savings would come from health care programs, including health care reform programs

The House adopted Chairman Ryan’s “Path to Prosperity” (H Con Res 112), by a mostly party line vote of 228-191. The Ryan budget (now the House Budget Committee resolution) sets the spending cap for overall discretionary spending at $1.028 trillion, $19 billion below the $1.047 trillion spending cap enacted in the Budget Control Act (BCA). It also replaces the automatic cut required under the Budget Control Act (BCA) with budget reconciliation instructions directing six House committees to identify necessary savings by April 27.

About half of the budget’s $2.5 trillion in 10-year savings would come from health care programs, including health care reform programs. Food stamp assistance would be cut by an estimated $133.5 billion, and an additional $94 billion would come from the Pell Grants program for low-income college students. The plan extends the Bush-era tax cuts — including lower rates for capital gains — but would phase out current tax benefits for the working poor.

The House resolution instructs authorizing committees to find savings in the programs under their jurisdictions. Each marks up its own bill, which is then combined with other committees’ bills and “reconciled” in a single resolution. This bill’s target is to reduce deficits by $261 billion over the coming decade, and by $18 billion next year.

Remember though: even if a proposal is included in the House budget, that doesn’t mean it’s a "law." The budget is a blueprint that does not carry the force of law itself, but it lays out overall priorities and makes assumptions about how to achieve them. An exception is the Budget Control Act which was passed as a law.

Meanwhile in the Senate, Budget Committee Chair Kent Conrad (D-ND) and Senate Appropriations Committee Chair Daniel Inouye (D-HI) urged House leaders to abide by the BCA cap. Chairman Conrad filed a “deeming resolution” which formalized the $1.047 trillion spending limit in the Senate. Formally adopting the BCA cap allows the Senate appropriators to determine “302(b)” allocations, or top-line funding levels for spending bills in each of the 12 appropriations subcommittees.

On March 27, House Democrats released an alternative budget proposal (PDF, 405KB) that would set overall spending for Fiscal Year 2013 at the BCA level. In that resolution, Budget Committee Minority Representative Chris Van Hollen (D-MD) proposed to make permanent the Bush-era tax cuts for the middle class but to generate $1 trillion in new revenue by ending tax cuts for millionaires, closing tax loopholes and establishing “the Buffett Rule,” designed to ensure millionaires do not pay lower tax rates than the middle class. Predictably, this proposal failed when brought to the House for a vote.

It goes without saying that 2012 is an election year and that budgets are political documents. Both parties’ budgets may be characterized as "aspirational." But their importance for setting the terms of the debate this year between chambers and parties cannot be overestimated.

For more updates on the budget, visit the APA Federal Budget Blog.