With Congress on spring break, many House and Senate Republicans will probably spend the next two weeks back home touting the resolutions they passed to "balance the budget" within 10 years. But the competing resolutions for fiscal 2016 won't do anything of the sort, no matter what lawmakers say. That's because Congress' annual budget resolution doesn't have the force of law, and so can't alter the entitlements and other mandatory programs that lie at the heart of the government's long-term fiscal problems. The two chambers' proposals do offer a broad statement about priorities and the role of government, and on that front they fail as well.
Eliminating the deficit has been a top Republican goal throughout President Obama's tenure, and it was the wrong goal while the economy was struggling and millions of Americans were falling into the federal safety net. The budget gap has narrowed as the economy has improved, raising tax revenues and reducing the demand for federal aid. But the aging population and rising healthcare costs threaten to cause the deficit to grow again in a few years unless Congress makes fundamental changes to the largest federal health programs, Medicaid and Medicare.
The Senate and House resolutions call for spending up to $3.8 trillion in the fiscal year that starts Oct. 1. The resolutions also lay out targets for future spending, while leaving to future bills the policy changes necessary to hit those targets. Some of the biggest cuts in that spending come with no plan to achieve them, such as the $1 trillion in savings the House proposal envisions in unspecified entitlements. But the resolutions do call for major changes to Medicaid and, in the House's version, Medicare too, albeit years in the future.
Sadly, the changes seek to save money in those programs mainly by shifting risk from the federal government to the states and to beneficiaries, rather than by attacking the core problem of rising healthcare costs and entrenched poverty. For example, the resolutions call for turning Medicaid support and food stamps into fixed block grants that give states considerably less money than the programs are expected to cost. Supporters say the change will give the states the freedom and incentive to run the programs more efficiently, but it's magical thinking to believe the wizards in state and county offices can wring $1 trillion out of them over the coming decade. The more likely result is that states will trim benefits and cover fewer people. More Americans will be left hungry and without health insurance, receiving treatment in the most expensive ways — with their costs passed on to everyone else.
The House and Senate proposals also call for the 2010 healthcare law to be repealed, offering no replacement for the subsidies that now help millions of Americans obtain coverage.
The fatal flaw in the Republicans' plans is that any change to food stamps, Medicare, Medicaid or the healthcare law would require Congress to pass bills that President Obama will sign. He's already indicated he won't support block grants for safety-net programs such as Medicaid. He's also criticized the House's approach to Medicare, which would convert it in 2024 from an insurance program into subsidies for public or private insurance plans. And he's dead set against repealing Obamacare.
The main statement Republicans are making with their budgets is that just about every federal function and service takes a back seat to the drive to balance the budget without raising tax rates, or more accurately, without asking anyone but the lowest-income workers to pay more. The wealthiest Americans would actually pay less under the Senate's plan, which calls for a repeal of the estate tax — a levy that applies only to the 0.2% of estates that are worth more than $5.4 million per person. The only exception to the GOP's spending discipline is defense; both the House and Senate resolutions would circumvent the spending limits Congress enacted in 2011 by funneling to the Pentagon up to $38 billion through an uncapped account supposedly limited for overseas combat operations. Sadly, that gimmickry is par for the course for these budget plans, which eschew the hard work of plotting an achievable route to balance in favor of scoring political points.