Van Hollen Releases House Democrats' Alternative Budget

Mar 18, 2013 | Budgets & Projections

Rep. Chris Van Hollen (D-MD), Ranking Member of the House Budget Committee, has released an alternative budget on behalf of House Democrats, "Jobs, Growth, and a Stronger Future." His budget succeeds in putting debt on a slight downward path with $1.8 trillion of savings compared to current law, or $2.3 trillion compared to the CRFB Realistic baseline.

Debt would rise compared to current law in the short term due to the budget's $200 billion in job creation measures and cancellation of sequestration, but then gradually decline after 2014. Debt would decline from a projected 79.4 percent of GDP in 2014 to 70.4 percent by 2023.

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Source: House Budget Committee, Senate Budget Committee, Republican Study Committee

The House Democratic budget contains a mix of revenue and spending cuts, though it relies more on revenue than the budget offered by Senate Democrats. It would get roughly $1.2 trillion of its savings from additional revenue and roughly $600 billion of spending cuts net of jobs measures.

House Budget Committee Democrats' FY 2014 Proposal (Percent of GDP)
 2014201520162017201820192020202120222023
Van Hollen Budget
Outlays22.6%21.8%21.6%21.3%21.4%21.6%21.7%21.9%22.2%22.1%
Revenues17.9%19.6%19.8%19.5%19.4%19.4%19.4%19.5%19.7%19.8%
Deficit4.7%2.2%1.9%1.8% 1.9%2.2% 2.4%2.4%2.5%2.4%
Debt79.4%77.7%75.3%73.1%71.9%71.3%71.0%70.7%70.6%70.4%
Current Law
Outlays21.7%21.6%21.6%21.5%21.7%22.0%22.2%22.4%22.9%22.9%
Revenues18.0%19.1%19.1%18.9%18.8%18.7%18.7%18.9%19.0% 19.1%
Deficit3.7%2.4%2.5%2.7%2.9%3.2%3.5%3.6%3.8% 3.8%
Debt77.7%76.3%74.6%73.4%73.1%73.5%74.2%75.0%76.0% 77.0%

Source: House Budget Committee Minority

On the spending side, the House Democratic alternative budget would save $141 billion from Medicare through a combination of different approaches, including negotiation of pharmaceutical drug prices for Medicare part D and several recommendations from MedPAC. Defense spending would be cut by $200 billion, and the budget would assume war funding would be zeroed out after 2014. The budget would also include $73 billion in mandatory savings reductions, through reducing agriculture subsidies, increasing Pension Benefit Guaranty Corporation fees, and other changes.

To achieve additional revenues, the budget recommends eliminating certain tax expenditures for higher-income earners and corporations, although like the House and Senate budgets, it leaves the specifics up to the tax-writing committee, in this case the House Ways and Means Committee.

The exact details on the savings are a little unclear right now, but we will update this post as we learn more to show exactly where the savings come from relative to both current law and current policy.

It is unlikely that Van Hollen's budget proposal will receive enough support to pass in the House. However, like the other FY 2014 budgets, this budget does put debt on a downward path, going beyond just stabilizing debt at the end of the ten-year window. That is a good sign of where the debate is heading.

We will continue to have further analysis as other budgets come out.