House GOP Unveils Budget to Fast-Track Tax Cuts, End Obamacare
(Bloomberg) -- House Republicans unveiled a 2019 budget proposal Tuesday to send a message to their core supporters that repealing Obamacare, cutting taxes and partially privatizing Medicare remain high on their agenda.
The budget, which claims to balance by 2027 through $8 trillion in spending cuts, seeks to revive the deficit-cutting mantle for Republicans after a two-year deal that increased spending by $300 billion. A massive tax cut approved last year is expected to add $2 trillion in deficits over 10 years.
The budget proposal lays out a platform for the Republicans to run on in November. Democrats need a net gain of 23 seats to win the House and the party has reason to be optimistic about achieving that goal in November’s election.
The new measure would keep the 2019 discretionary spending level, avoiding a showdown with Democrats that could lead to another government shutdown. The plan calls for defense spending increases and cuts to domestic discretionary spending in later years.
Authored by House Budget Chairman Steve Womack of Arkansas, the plan is set for a committee vote Thursday ahead of a possible House floor vote next week. The original deadline for adoption of a House-Senate budget was April 15.
Womack said in a statement that even with “a booming economy thanks to tax reform, there are real fiscal challenges casting a shadow of doubt on the nation’s future, including $21 trillion of debt that is rapidly on the rise. We must overcome the challenges."
To win conservative support, the budget would fast-track at least $302 billion in spending cuts over 10 years through a process that requires only 50 votes to pass the Senate, avoiding a Democratic filibuster, as long as the plan doesn’t increase deficits after 10 years. The same reconciliation process was used in the failed attempt last year to repeal Obamacare and for the successful passage of the tax-code overhaul.
The budget would let congressional committees try once again to repeal the Affordable Care Act and enact a new tax law. The 2017 tax law contained individual rate cuts that expire in 2026, and many Republicans want to extend those in a new bill.
"This budget assumes Congress repeals Obamacare and replaces it with a patient-centered, free-market health care system," the budget summary states. It calls for a private Medicare "premium support" system to compete with traditional Medicare, setting work requirements for Medicaid, and for trimming other welfare programs.
While the Senate is unlikely to adopt its own budget to take up these initiatives before the November congressional election, the budget process could be used by lame-duck lawmakers after the election to ram through Republican-only legislation.
Republicans have felt heat from their political base over the $1.3 trillion omnibus spending bill passed in March that increased military and domestic spending. The backlash prompted President Donald Trump to vow never to sign a similar bill. This week, the Senate plans a political-messaging vote on a White House-backed bill to cancel $15 billion in unspent funds.
The budget’s appearance, though, could bolster Democratic attempts to make the 2018 election about preserving Obamacare, which the minority party argues is increasingly popular. Democrats also argue that the 2017 tax cut skewed benefits overwhelmingly to the wealthy, making economic fairness an issue.
“Democrats will make sure everyone knows that after providing millionaires and corporations with massive tax breaks, House Republicans decided to pay for it by once again calling for a repeal of the Affordable Care Act, ending Medicare as we know it, and offering deep cuts to investments in economic growth,” said the Budget Committee’s top Democrat, John Yarmuth of Kentucky.
Democratic Senatorial Campaign Committee spokesman David Bergstein said this month that voters’ concerns about rising health care premiums overwhelm any positive feelings about the overall economy, and that is a liability for Republican Senate candidates.
Struggling for Votes
Womack has struggled to round up votes on the Budget Committee for his plan, so that could lead to drama this week in committee and later on the House floor. Conservatives may be reluctant to vote for the 2019 spending levels set in the budget agreement with Democrats early this year.
Appropriations committees are using those spending levels to draft 12 spending bills in an attempt to enact them by the Sept. 30 government shutdown deadline. Endorsement of the budget cap by House Republicans would be a strong indication that Congress may be able to avoid a shutdown over spending levels.
The Trump administration’s decision this month that it won’t defend Obamacare in court could spur Congress to revisit the issue later this year. The lawsuit by Texas challenging the law could gut the law’s protection for people with pre-existing medical conditions. Were that to happen, the 2019 House budget would provide a tool to revive the repeal attempt.
©2018 Bloomberg L.P.