What to Expect from this Week's Dueling Budget Proposals


Photo credit: Gage Skidmore / Foter.com / CC BY-SA

It's a budget battle royale in Washington this week: GOP House Budget Chairman Paul Ryan is set to release the latest version of his comprehensive budget plan tomorrow. Sen. Patty Murray, the Democrat who runs the Senate budget committee, is expected to counter with a budget plan of her own. Here's what to expect from both of those plans. 

Early reports suggest that Ryan's plan will…

  • attempt to bring the budget into balance within a decade, zeroing out the annual deficit entirely and reducing federal spending by about $5 trillion relative to its current-law trajectory. Previous versions of Ryan's plan took several decades to fully balance.
  • accept the increased top marginal that were installed as a result of the fiscal cliff deal. The extra revenue from the higher rates will make it easier for Ryan's plan to score as balancing the budget in a decade. "We don't want to refight the fiscal cliff," Ryan said over the weekend.
  • defund ObamaCare. Unlike the continuing resolution the House passed last week, Ryan's budget plan proposes to cut all funding for the president's health law.
  • leave in place ObamaCare's Medicare cuts. Ryan has been critical of those cuts in the past. But he's also included them in previous versions of his own budget plan. Once again, he will propose leaving them in place, which will result in scorable budget savings.
  • propose transitioning Medicare into a premium support system that includes a government-run Medicare option. This is the latest iteration of the Medicare overhaul plan Ryan has pushed for years. Early reports suggested that Ryan's new budget might aim for a faster transition than in the past, but it now appears that, as with previous versions, Ryan's plan would leave Medicare unchanged for anyone who is 55 or older.
  • also proposing funding the federal government's share of Medicaid through state-based block grants rather than matching dollars. This proposal, which would allow Medicaid to grow much more slowly than its current-law trajectory,has also appeared in previous versions of his budget plan.

In other words, the Ryan budget framework will include a mix of familiar entitlement reforms and new goals, while reflecting policy changes enacted since last year.

Less is known about the plan being put together by Senate Democrats. And even when the plan comes out, it probably won't reveal very much. National Journal reports that the plan "is expected to offer only broad outlines of many of the party's usual talking points."

Sen. Murray has framed her party's approach as being  "about values and priorities," which apparently means higher taxes and continued deficits. The Hill reports that Democrats "have signaled that their budget will do more to raise revenue than to cut spending and that it will not end deficits." The reason for the emphasis on higher taxes, according to a memo from Murray, is that since 2010, Congress has already approved $1.8 trillion in spending cuts, but only raised about $600 billion in new tax revenue.

Sen. Murray has also suggested that it's not easy keeping her own side united. The former preschool teacher likened the experience to keeping order amongst children:  "If you can have 24 4-year-olds in your room and get them all to sit down and sing the same song, you can do just about anything," she told The Wall Street Journal. One particular challenge might come from Independent Sen. Bernie Sanders, who sits on a budget panel that must vote on Murray's plan. According to The Hill, Sanders, who caucuses with Democrats, "adamantly resists any entitlement benefit cuts and is pushing for big tax increases in the bill." 

Neither budget plan is expected to pass. But the two plans will help set the tone for the coming budget debate, and act as starting points for any future fiscal negotiations.