Two Alternative Budgets from the Congressional Black Caucus and Progressive Caucus
Update: This post has been updated to incorporate new numbers for the Congressional Black Caucus budget.
Budget season is well underway as the House Republicans and Senate Democrats have both released their respective budgets. But two alternative budgets were also offered yesterday, one from the Congressional Black Caucus (CBC) and another from the Congressional Progressive Caucus (CPC). Both budgets rely more heavily on revenue than either the Ryan plan or the Murray budget, showing the substantial savings that could be achieved if lawmakers take up tax reform.
The Congressional Black Caucus Budget
CBC Chair Marcia Fudge (D-OH) has put forward a FY 2014 budget entitled, "Pro-Growth. Pro-People. Pro-America." The budget contains $2.8 trillion in net deficit reduction relative to current law and $3.3 trillion relative to the CRFB Realistic baseline, which would put debt on a downward path after the expiration of short-term stimulus spending. Debt would fall from 78.8 percent of GDP in 2014 to 66.2 percent of GDP in 2023.
The Congressional Black Caucus budget directs the Ways and Means Committee to find $2.7 trillion in additional revenues, providing a number of options for getting that amount (the options total $4.2 trillion combined). They include lowering the threshold for the tax cuts extended in the American Taxpayer Relief Act (ATRA) from $450K to $250K, taxing capital gains and dividends as ordinary income, and enacting a financial transactions tax. It would also cancel sequestration, enact a permanent "doc fix", and include $862 billion in jobs measures and long-term investments. Revenue would rise to 20.5 percent of GDP by 2023 in the CBC's budget, compared to 19.1 percent under current policy. Spending would fall to 22.3 percent of GDP by 2023 under current policy, and would fall to the same level under the CBC's budget though with a great deal of short-term stimulus measures.
The Congressional Progressive Caucus Budget
The Congressional Progressive Caucus also put forward a FY 2014 alternative budget, the "Back to Work Budget." The budget contain $2.15 trillion in net savings, enough to put the debt on a downward path throughout the decade. Debt would rise in the first few years to 79.9 percent of GDP in 2013 and 84.6 percent in 2014 due to a number of up-front jobs measures, but fall steadily after 2014, reaching 68.7 percent in 2023.
The CPC's budget takes a revenue-heavy approach, raising $5.4 trillion in additional revenues relative to current law. Among its proposals are using the $250K threshold instead of $450K for the tax cuts in ATRA, having additional tax brackets for millionaires and billionaires up to a 49 percent top rate, capping the value of itemized deductions to 28 percent, enacting a carbon tax of $25 per ton of CO2, and eliminating various individual and corporate tax expenditures. The CPC's budget would have revenues at 21.8 percent in 2023, well above the 19.1 percent in current policy.
On the spending side, the budget would increase spending by $3 trillion over ten years, with $2.5 trillion in temporary jobs measures. The budget would remove the Budget Control Act caps for non-defense discretionary spending and increase it beyond that while maintaining defense spending at sequester levels. The budget would also institute a public option, allow pharmaceutical drug price negotiation for Medicare Part D, and reduce farm subsidies, among other proposals. Spending would end up at 23.0 percent of GDP in 2023, about the same as current policy.
Source: Congressional Black Caucus, Congressional Budget Caucus, House Budget Committee, Senate Budget Committee, CBO
Both these budgets would put debt on a downward path and reduce debt to below 70 percent by 2023. Obviously, both rely on a revenue-heavy approach, similar to how Congressman Ryan's budget relies on spending cuts. Still, we encourage members of Congress to continue to add to the debate by presenting their ideas for the budget.