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House Republican Budget Resolution Would Harm Economy, Seniors, the Middle Class, and Those Most in Need

Summary: 
House Republicans today released a budget resolution for fiscal year (FY) 2015 that would harm the economy, seniors, the middle class, and those most in need, while not using any savings from ending inefficient tax breaks to help reduce the nation’s deficits. The proposal stands in stark contrast to the President’s FY 2015 Budget, which would accelerate economic growth and expand opportunity for all Americans, while continuing to improve the nation’s long-term fiscal outlook.

House Republicans today released a budget resolution for fiscal year (FY) 2015 that would harm the economy, seniors, the middle class, and those most in need, while not using any savings from ending inefficient tax breaks to help reduce the nation’s deficits.  The proposal stands in stark contrast to the President’s FY 2015 Budget, which would accelerate economic growth and expand opportunity for all Americans, while continuing to improve the nation’s long-term fiscal outlook.

The President’s Budget provides a roadmap for ensuring the country reaches its full potential.  It accelerates growth and creates jobs by investing in infrastructure, research, and manufacturing.  It expands opportunity by ensuring health care is affordable and reliable, investing in job training and preschool, and providing pro-work tax cuts.  It ensures our long-term fiscal strength by fixing our broken immigration system and addressing the primary drivers of long-term debt and deficits, health care cost growth and inadequate revenues to meet the needs of our aging population.  And it supports efforts to make our government more efficient, effective, and supportive of economic growth.

Unfortunately, the House Republican Budget pursues a different course.  Rather than advancing policies that accelerate economic growth both now and in the future, such as investing in infrastructure, research, and education, it sets out a path to cut these investments well below the already untenable levels resulting from sequestration. Rather than promoting economic opportunity, it would undermine the hard work of those struggling to put food on the table and keep their families healthy by cutting food stamps and Medicaid.  Rather than strengthening Medicare for seniors while improving accountability, it would end Medicare as we know it, turning it into a voucher program and risking a death spiral in traditional Medicare.  Rather than asking the wealthiest to contribute to reducing our deficits, it would raise taxes on middle class families with children by an average of at least $2,000 while refusing to use any revenue from ending wasteful tax loopholes to help reduce the deficit.  

And rather than expanding health coverage for all Americans and making it more affordable, it would repeal the Affordable Care Act, raising health care costs on families and businesses and eliminating coverage for the 3 million young adults who have gained coverage by staying on their parent’s plan, the millions of people who have already signed up for private insurance plans through the Marketplaces, and millions more who can continue to gain coverage through Medicaid.  It would also wipe out other progress already made under the Affordable Care Act.  For example it would:

  • repeal the closure of the donut hole in prescription drug coverage, which saved the typical Medicare beneficiary who hit the donut hole roughly $900 on prescription drugs in 2013;
  • allow insurance companies to raise premiums and deny coverage because of a pre-existing condition and charge women higher rates;
  • allow insurance companies to reinstate lifetime dollar limits on plans;
  • no longer require insurance companies to allow parents to keep their children up to age 26 on their insurance plans; and
  • no longer require insurance companies to cover recommended preventive services at no cost under new plans. 

Although the House Republican Budget adheres to the 2015 discretionary funding levels agreed to in the Bipartisan Budget Act, it proposes to drastically reduce non-defense discretionary funding in 2016 and beyond, reaching below sequester-level amounts.  Although the resolution does not specify what it would cut to reach those levels, we know that if the cuts were distributed equally across Budget, it would result in reductions of 15 percent or more below the levels the President has identified as needed to help our economy reach its full potential.  If those impacts were felt today, some of the results would be:

  • Head Start, which provides comprehensive early learning and development services, would serve about 170,000 fewer of the nation's most vulnerable children.
  • Title I, which helps ensure students receive support to meet challenging academic standards, would be unable to support the equivalent of roughly 8,000 schools and 3.4 million disadvantaged students, potentially resulting in 29,000 fewer teachers and aides with jobs.
  • The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides critical food assistance to pregnant and postpartum women, infants and children would be able to assist more than 200,000 fewer postpartum women and children.
  • TIGER grants, which fund critical highway, transit, rail and port projects, would be reduced by the equivalent of $90 million from 2014, despite the high need for the program that was only able to award 4 percent of requested funding in the most recent round of grants and is an important part of investing in growth and jobs.
  • Job Training – More than 3.5 million fewer individuals would receive employment and training services through Department of Labor job training programs.
  • The National Institutes of Health could be forced to reduce the number of new NIH grants awarded by about 1,400, slowing research that could lead to new treatments and cures for diseases such as cancer, Alzheimer's, and diabetes.
  • The National Science Foundation could be forced to issue thousands of fewer research awards, affecting tens of thousands of researchers, students, and technicians.
  • Customs and Border Protection – 3,300 fewer Customs and Border Protection Officers (CBPOs) would be funded, impacting travel and trade at our nation's air, land, and sea ports of entry.  A decrease in CBPOs of this magnitude could lead to job and GDP losses, and tens of thousands fewer enforcement actions taken.
  • Criminal Justice – Over 3,500 fewer Federal agents would be funded to combat violent crime, pursue financial crimes, and ensure national security, as well as more than 3,100 fewer prison guards to maintain the safe and secure confinement of inmates in Federal prisons. 

Moreover, the House Republican Budget fails to tackle some of the most fundamental issues that hold the key to further economic growth and job creation.  It fails to propose a multi-year solution for financing infrastructure improvements across the country that would create jobs and repair roads and bridges that have fallen into disrepair.  And it offers no solutions for our broken immigration system, even though independent economists of all stripes have said that commonsense immigration reform would grow our economy and reduce our deficits.

The Administration strongly disagrees with the House Republican approach, and believes it would weaken our economy and our country.  At the same time, we are encouraged by the bipartisan agreements reached over the past year to return to a regular budget process that provides certainty for individuals, businesses and the economy.  The Administration looks forward to working with both parties in Congress throughout the coming year to maintain this progress and advance policies that will grow the economy and expand opportunity for all Americans.

Sylvia Mathews Burwell is Director of the Office of Management and Budget.