By the middle of this week, Americans will once again be plunged into the wildly different world views of Republicans and Democrats as the two parties release competing budget proposals within hours of one another.
In GOP land, military spending is sacred and untouchable. The government needs far fewer regulations for industries like financial services, big banks, or energy companies. And, for those younger than age 55, Medicare could look unrecognizable: People receive a fixed sum of money from the federal government to buy health insurance in their old age, regardless of the way inflation has caused health care costs to increase. This is a world where the federal government plays a much smaller role in citizens’ lives on everything from protection of the environment to government-backed loans to help people buy homes.
In the Democrats’ world, wealthy people and corporations pay much higher taxes to both reduce the deficit and pour money into government programs for job training, education grants, and infrastructure projects. Medicare remains the same for elderly people and anyone relatively close to retirement. But, doctors and hospitals earn less money from the government; that is part of the equation to try to keep the rising cost of federal health insurance at bay. The Democrats’ worldview maintains the social safety-net programs, with the hope that over the next 10 years, increased taxes and the rate of slowdown in federal health care spending will be enough to stabilize the deficit.
These are snapshots of what both parties will offer this week. By releasing their budget blueprints in tandem, the parties hope that the American public will finally and clearly see their divergent approaches toward government spending. Of course, it would not hurt to score some political points, too, by attacking one other’s plans in the coming months and in the midterm elections in 2014.
For this reason, Democrats gleefully anticipate the House Republican effort, led by former vice presidential candidate and Budget Committee Chairman Paul Ryan of Wisconsin. The Democrats used Ryan’s past two budgets effectively during the presidential campaign and congressional races to paint the GOP as a party unsympathetic to old people, poor people, or anyone who needs government assistance.
The Republicans are equally hopeful that they can use the Senate Democrats’ budget as a target for future political attacks. Their bet is that they can position themselves as the party more responsible on fiscal issues and benefit from recent polling that shows that Americans increasingly care — in the abstract, at least — about reducing the deficit. Pew Research Center polling shows that the number of Americans who consider deficit reduction a top government priority jumped from 53 percent in January 2009 to 72 percent in January 2013.
Both budgetary visions will plant seeds for future political games, and the data points in each budget will permeate the upcoming fiscal battles — including the coming clash over the debt ceiling. The proposals will offer a framework for the policy ideas and political strategy leading up to that fight in late July or early August, when the stakes will be higher, given the potential economic consequences of a default. “This whole thing will come to a crescendo this summer, and we’re going to have to talk to each other to get an agreement to delay a debt crisis,” Ryan said.
Few budget experts predict that the plans Senate Democrats and House Republicans release will go anywhere beyond the two chambers. The same goes for producing the elusive grand bargain. “The two budget proposals are likely to be oceans apart,” said Allen Schick, a professor at the University of Maryland’s School of Public Policy and a longtime budget authority. “Logically, there is no middle ground between the two.”
The House Republicans, led by Ryan, are expected to go first in the budget sequence and unveil their proposal on Tuesday. Ryan told reporters last week to expect “no big surprises,” apart from his promise to balance the budget in a 10-year window. This task will be easier given the last year of fiscal policy.
The fiscal-cliff deal raised roughly $600 billion in revenue, enough to boost the budget baseline against which Ryan measures his deficit savings. Savings the government expects from the first few years of the Affordable Care Act, as Ryan acknowledges, will also help achieve balance by 2023, as will the slowdown in the rate of growth of health care spending. In 2013, Medicare will only grow by 4 percent, or $21 billion, according to Congressional Budget Office calculations.
The Senate Democrats’ budget, shepherded by the new Senate Budget Committee Chairman Patty Murray of Washington, will take an opposite approach from Ryan’s. It is expected to advocate for more revenue from the wealthy and additional stimulus-like spending. “What you’ll see in our budget is a focus and a priority on investments that really help our middle class grow and prosper,” Murray said. “Things that I know, from my own personal experience, help make our country better.”
One of the main reasons the Senate Democrats are doing a budget is to politically defang the Republican criticism that they have not produced one since 2009.
The other interesting budget news to watch — like a coda to Ryan’s and Murray’s proposals — is the president’s sudden courtship of members of Congress in an effort to produce a big budget deal. President Obama is slated to appear on Capitol Hill this week to speak to both Senate and House Republicans, visits that will coincide with the congressional budget releases and reverberate through the political world.
It’s unclear which route, if any, can produce a workable budget deal that moves the White House and Congress beyond its fiscal impasse.
This article appears in the March 11, 2013, edition of National Journal Daily.