Comparing the House, Senate and Obama Budget Plans
From NCPA May 1, 2013
For the first time in four years, the House of Representatives and the Senate have passed their own budget plans. The Senate plan, sponsored by Patty Murray (D-Wash.), is similar to President Obama's proposed budget, which was released 10 weeks late. The House plan, sponsored by Paul Ryan (R-Wisc.), is a stark contrast to the other plans with a different approach on tax policy, overall spending levels and entitlement spending. Only the House budget proposal reflects responsible fiscal policy that places the United States on a sustainable long-term trajectory, says Peter Ferrara, a senior fellow with the National Center for Policy Analysis.
- The House budget would return the level of federal taxing and spending to its long-term average by reducing federal spending increases by cutting $5.7 trillion over the next 10 years.
- The reduction would lead to an 18 percent fall in the size of the federal government and would balance the federal budget after 10 years with no further tax increases.
- In contrast, the Senate claims cuts of $975 billion in the next 10 years but realizes the cuts through vague statements like reduced Iraq and Afghanistan spending and $275 billion in savings through cutting waste and fraud.
The Senate budget involves no net cuts in nondefense spending and, like President Obama's proposal, seeks to replace the sequester with a $480 billion tax increase. The Senate budget, and Obama's budget proposal, would grow federal spending by more than $2.1 trillion, $733 billion more than the House budget.
- Obama's budget includes $1.1 trillion in tax increases, including the Buffet tax on high incomes, while the Senate budget plan includes more than $1.5 trillion in tax increases.
- The Senate plan would lead to record deficits of more than $500 billion in 2023 and Obama's budget projects more than $5.3 trillion in deficits in the next decade, a size that the proposed tax increases could never make up.
- The House budget reduces public debt to 54.8 percent of gross domestic product (GDP) after 10 years, while the Senate's budget and Obama's budget reduce public debt to 70 percent and 73 percent of GDP, respectively, after 10 years.
Under the House plan, spending on Medicare and Medicaid would be the same amount mandated by ObamaCare, recent tax increases would be ratified without the Senate's additional $1.5 trillion tax hike, corporate taxes would be reduced from 35 percent to 25 percent and income taxes would fall.
Overall, only the House plan promotes pro-growth policies that will lead to economic expansion and the chance for genuine entitlement reforms to Medicare, Social Security and welfare.
Source: Peter Ferrara, "Budget Wars: The President versus the House versus the Senate," National Center for Policy Analysis, May 2013.