House Republicans unveiled a 2016 budget Tuesday that would cut $5.5 trillion from spending over the next 10 years, repeal Obamacare and change Medicare into a voucherlike system — key parts of a fiscally punishing blueprint designed to end red ink in less than a decade.
Budget watchdog groups praised the deficit-cutting goal but warned the GOP is using gimmicks and politically impossible cuts to get there. Democrats insisted they’ll do everything they can to stop the budget, arguing it cuts too deep, taxes too little and hurts the poor who depend on government assistance.
In two key moves, Republicans tried to boost defense spending by shifting money from the regular budget to one-time war costs, and included a plan to permanently patch Medicare, eliminating the need for annual infusions of cash to make sure doctors don’t see their payments cut, which would force them to drop Medicare patients.
“Our budget will balance, but it’s also by growing our economy, growing jobs and building economic strength for our future,” House Speaker John A. Boehner, Ohio Republican, said.
Congressional budgets are blueprints without the force of law, but they offer a comprehensive outline of each party’s agenda before lawmakers are expected to forge actual spending bills.
Tuesday’s plan was written by House Budget Chairman Tom Price, Georgia Republican, and it checked off familiar items on the GOP’s wish list: encouraging work requirements for welfare recipients, turning Medicaid into a block grant program to empower states to make changes, restoring billions of dollars in cuts to Medicare and turning the country’s health insurance for seniors into a voucher-type system beginning in 2024, when the government would use a premium-support model to try to reduce costs and foster more decision-making by the elderly.
Mr. Price, hoping to get around the sequester while satisfying GOP defense hawks, added roughly $40 billion to a contingency fund for overseas fighting. That places his overall defense spending at $613 billion, or beyond what the White House had proposed.
“Unless we have economic security, we cannot have national security,” Mr. Price said at a press conference Tuesday, surrounded by fellow Republicans and holding up a copy of his “Balanced Budget for a Stronger America.”
The funding ploy may not make it far — even some Senate Republicans have called it a gimmick — and the White House has said it won’t accept an increase in military spending without equal increases in nondefense spending, reflecting the spirit of the 2011 budget bargain with the GOP.
Senate Budget Chairman Michael B. Enzi, Wyoming Republican, is expected to unveil his own plan Wednesday that achieves balance within 10 years. Both plans will face scrutiny in committee this week and be on their chamber floors next week.
The White House signaled it is eager to have a GOP financial plan to shoot at.
“It’s not a budget that reflects growth,” President Obama told reporters Tuesday. “We’re going to have a robust debate.”
Senior officials, speaking on condition of anonymity, said the president believes the House Republicans’ budget amounts to a doubling down on their party’s failed theory of trickle-down economics.
Mr. Obama’s own budget, released last month, calls for tax hikes on the wealthy to fund a $74 billion increase in spending, and would undo the automatic cuts known as sequestration, paving the way for higher spending down the road. His budget never reaches balances and, at the end of a decade of deficits, would be back to the $1 trillion-a-year level he reached in his first term.
Mr. Obama will lay out more of his opposition to the GOP’s spending blueprint Wednesday during a speech in Cleveland.
House Minority Leader Nancy Pelosi, California Democrat, said the GOP offered “nothing new,” while others said threats to repeal Obamacare send a harsh message one day after the administration said 16.4 million Americans had gained coverage since it took root.
Mr. Price’s plan echoed ones that Rep. Paul Ryan, Wisconsin Republican, offered in recent years, although the new Republican majority in the Senate presents responsibilities and opportunities.
The budget committee said its plan savings will pay for its policies, including the $177 billion needed to repeal an outdated Medicare payment formula that House leaders hope to pass before the end of the month.
For years, both parties have tried to replace the formula known as the Sustainable Growth Rate, as Congress overrides it every year with a so-called “doc fix” even when it calls for a cut.
While Mr. Price’s plan includes no tax increases, it takes nearly $1 trillion in revenue by assuming that Congress will end certain tax breaks known as “extenders.”
Rep. Chris Van Hollen of Maryland, the top Democrat on the Budget Committee, called that “budget quackery.”
“Not under Enron accounting rules would their budget balance,” he said.
Mr. Price said the GOP will rely on its twin majorities to prepare instructions for “reconciliation,” an arcane move that could allow the party to approve big changes on a majority vote in the Senate without worrying about a Democratic filibuster.
House Republicans singled out the repeal of Obamacare Tuesday as a potential use for the tactic, although much of their plans will depend on rulings by the Senate’s main referee, the parliamentarian.
Rep. Diane Black, Tennessee Republican, cheered all attempts at repeal, saying Obamacare is “wreaking havoc” on both the health care system and the economy.
The GOP budget, however, appears to retain the revenues from Obamacare even as it seeks to do away with the law.
Mr. Van Hollen said the GOP can’t have it both ways.
“You can’t say you’re repealing the Affordable Care Act, which they say with great fanfare, and claim balance,” he said. “It’s just not true.”
He also acknowledged that Republicans are in a better position to push their agenda, even if he thinks it’s bad for the country.
“They’re firing with real bullets now; they’ve got the majority in the Senate,” he said. “Believe me, if this budget approaches reality, the country will rebel.”