How the Competing Budget Plans Stack Up

Members of the bipartisan budget conference Rep. Paul Ryan (R-WI) (L) and Sen. Patty Murray (D-WA) discuss their initial meeting at the U.S. Capitol October 17, 2013 in Washington, DC. Congress voted last night to fund the federal budget and increase the nation's debt limit, ending a 16-day government shutdown.
National Journal
Billy House
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Billy House
Oct. 27, 2013, 7:19 a.m.

Ex­pect­a­tions are low from both Re­pub­lic­ans and Demo­crats as their House and Sen­ate budget con­fer­ees pre­pare to sit down for their first form­al meet­ing Wed­nes­day, with the pro­spects of any “grand bar­gain” on 10-year de­fi­cit-re­duc­tion goals be­ing roundly dis­missed.

Rather, the an­ti­cip­a­tion about any agree­ment emer­ging — if there is one at all — is that it will have a much nar­row­er fo­cus, ad­dress­ing only the rest of the cur­rent fisc­al year that lasts through Sept. 30, 2014, or per­haps an even short­er peri­od. Some re­lief might be thrown in by re­jig­ger­ing the auto­mat­ic spend­ing cuts un­der se­quest­ra­tion in some way, and by clos­ing a few tax loop­holes.

Will the con­fer­ence be a missed op­por­tun­ity? Some law­makers, seni­or aides, and out­side ex­perts say it could be a chance for the 29 con­fer­ees led by the two Budget Com­mit­tee chairs — Sen. Patty Mur­ray, D-Wash., and Rep. Paul Ry­an, R-Wis. — to de­bate out in the open the lar­ger pub­lic-policy ef­fects of their ap­proaches, and then work on a co­hes­ive mul­ti­year budget plan.

Even though such a break­through is seen as un­likely, the talks be­gin with some clear start­ing points — the budget blue­prints passed by each cham­ber earli­er this year.

OVER­ALL

  • Ry­an’s House budget plan is billed as bal­an­cing the budget in 10 years by cut­ting spend­ing $5.7 tril­lion, com­pared with the Con­gres­sion­al Budget Of­fice’s baseline ($4.6 tril­lion if there is an as­sump­tion that war costs will be re­duced, a baseline Ry­an uses).
  • Mur­ray’s Sen­ate bill seeks a com­bin­a­tion of new rev­en­ue and spend­ing cuts to re­duce the de­fi­cit by about $1.85 tril­lion over 10 years. If a pro­posed jobs and in­fra­struc­ture pack­age is not in­cluded, the amount of sav­ings in the Sen­ate plan would go from $1.85 tril­lion to about $1.95 tril­lion over 10 years.

REV­EN­UE AND TAX RE­FORM

  • The House budget pro­pos­al calls for rev­en­ue-neut­ral tax re­forms re­l­at­ive to the CBO baseline, such as re­peal­ing the al­tern­at­ive min­im­um tax and re­du­cing the cor­por­ate tax rate.
  • About half of the Sen­ate’s planned de­fi­cit re­duc­tion over 10 years — $975 bil­lion — would come from new rev­en­ues, mostly from cor­por­a­tions and wealthy house­holds.

DIS­CRE­TION­ARY SPEND­ING

  • The House budget in­cludes $966 bil­lion in dis­cre­tion­ary spend­ing for fisc­al 2014, di­vided between $552 bil­lion in de­fense and $414 bil­lion in nondefense spend­ing.
  • The Sen­ate budget in­cludes a topline of $1.058 tril­lion in dis­cre­tion­ary spend­ing for fisc­al 2014, di­vided between $552 bil­lion in de­fense and $506 bil­lion in nondefense spend­ing.

SE­QUEST­RA­TION

  • The House budget ex­ceeds the de­fense se­quest­ra­tion cap set in the 2011 Budget Con­trol Act by about $54 bil­lion for fisc­al 2014. But it cuts nondefense dis­cre­tion­ary by an equi­val­ent amount, in a move to trans­fer the de­fense se­quester to do­mest­ic pro­grams and main­tain some of the over­all cap.
  • The Sen­ate budget ex­ceeds the se­quest­ra­tion caps by $91 bil­lion for fisc­al 2014, but calls for re­pla­cing the se­quester cuts with a com­bin­a­tion of new rev­en­ue and spend­ing — and do­ing so fully over 10 years.

MEDI­CARE AND MEDI­CAID

  • The House budget would change Medi­caid to a block grant for states; Medi­care would be con­ver­ted to al­loc­a­tions to be­ne­fi­ciar­ies based on their in­come, and the amounts could be used for private in­sur­ance or a form of tra­di­tion­al Medi­care. Those changes would start in 2024 and would af­fect those who are cur­rently 55 or young­er. The House plan would also in­crease the eli­gib­il­ity age for Medi­care from 65 to 67 by 2035.
  • The Sen­ate plan in­cludes a $265 bil­lion re­duc­tion to Medi­care and a $10 bil­lion cut to Medi­caid, without mak­ing ma­jor struc­tur­al changes.

AF­FORD­ABLE CARE ACT

  • The House budget would re­peal most of the health care law, in­clud­ing its ex­change sub­sidies and Medi­caid ex­pan­sion.
  • The Sen­ate budget as­sumes full im­ple­ment­a­tion of the Af­ford­able Care Act.

DE­FI­CIT AND DEBT

  • The House pro­jects that its budget would de­liv­er a $7 bil­lion sur­plus by 2023, based on CBO baselines. The debt would sta­bil­ize in 2015 at 74.1 per­cent of gross do­mest­ic product, then de­cline each year to 54.8 per­cent of GDP in 2023.
  • The Sen­ate pro­jects a $566 bil­lion de­fi­cit by 2023. Debt would sta­bil­ize in 2015 at 77.1 per­cent of GDP, then de­cline each year to 70.4 per­cent of GDP in 2023.
  • The budget con­fer­ence has un­til about Dec. 13 to come up with a gov­ern­ment spend­ing plan that can pass both cham­bers. Time is so short be­cause the le­gis­la­tion that re­opened the gov­ern­ment ex­pires Jan. 15, and an­oth­er shut­down looms un­less a new agree­ment can be ne­go­ti­ated by then.
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