If there is one thing you need to know about the House budget plan that was introduced on Tuesday it’s this: It balances in nine years by cutting $5.5 trillion in projected spending over the next decade.
Cutting isn’t easy. It requires making difficult, often politically unpopular choices because it inevitably requires someone’s favored program to get trimmed or someone’s subsidy to be eliminated. We’ve come to the point where there is simply no way to balance the books without someone’s ox getting gored and without the third rail being grasped.
That’s why President Obama has consistently taken the easy route. His most recent budget included a $2.4 trillion spending increase by handing out political goodies as if they were beads at Mardi Gras, resulting in a budget that never, as in ever, balances.
“The president is advocating more spending, more taxes and more debt,” Senate Budget Committee Chairman Mike Enzi said in response to the White House’s budget. “As we have seen over the past several years, that approach will yield less opportunity for the middle class and a crushing burden of debt that threatens both our future prosperity and our national security.”
Republicans, to their credit, shied away from the easy path of taxing and spending other people’s money, opting instead to prune the size of government in order to allow the private economy to flourish.
“Our goal is not merely to make Washington live within its means,” House Budget Chairman Tom Price wrote in the USA Today. “We know that job creators and future entrepreneurs see today’s large debt levels as tomorrow’s likely tax hikes, interest rates increases and inflationary pressures.”
This budget takes much-needed steps to alleviate those threats in order to create an environment that encourages investors to invest, business owners to hire, entrepreneurs to create, and workers to work.
First and foremost, this budget does that by repealing all of Obamacare, including its onerous taxes on individuals and businesses, in order to give Congress the power to build a system that truly bends the cost curve.
The budget also fundamentally reweaves the tattered social safety net that, without repair, will be forced to renege on its promise to future generations. For instance, the budget would turn Medicaid, which has grown from a $400 million per year program to a nearly $400 billion one, into a block grant that is indexed to inflation and population growth. This would provide states with the freedom and flexibility needed to adapt the program to their unique needs while also allowing them to serve as laboratories for cost-saving techniques.
Medicare, which is currently projected to be bankrupt in 2030, would be transformed into a premium support program that allows beneficiaries to choose from a range of options. By forcing health care plans to bid in a competitive market for subscribers Price’s plan uses market forces, not top-down government mandates or unworkable price controls, to keep prices down.
Among the myriad other pro-growth reforms contained in the budget is a call for comprehensive tax reform, a return to focusing on investment in breakthrough innovations rather than application and commercialization, a plan to ensure the solvency of the Highway Trust Fund, streamlining job training programs, expanding work requirements for federal welfare programs to end the poverty trap and investing an additional $50 billion in the Pentagon through the Overseas Contingency Operations fund.
This budget is a long way from finalized. There will be many committee discussions and floor debates in the coming weeks and months. And ultimately, that’s the thing that makes this budget different – it has the chance to work through the legislative process.
“We built this budget mindful of the fact that for the first time in a long time both the House of Representatives and the Senate are committed to producing a balanced budget,” House Budget Chairman Tom Price said. “In the weeks and months ahead, there will be passionate debate and a chance for policymakers to demonstrate that we are ready to step up to the plate with positive solutions to restore opportunity for all Americans.”
This budget is a bold, some would say risky, step. But thank goodness we have one party willing to take the hard route towards good policy.