House GOP Budget a Solid First Step, But More Work is Needed
For Immediate Release
The House Budget Committee released its Fiscal Year (FY) 2018 budget resolution Tuesday that calls for balancing the budget over a decade through trillions of dollars of spending cuts. It includes reconciliation instructions that could be used for deficit-neutral tax reform with at least $203 billion in net savings.
The resolution also calls for increases in FY 2018 defense discretionary spending above spending limits in law and continued abuse of the Overseas Contingency Operations (OCO) fund. In addition, the budget assumes $1.5 trillion in deficit reduction as a result of significantly more optimistic economic growth assumptions than Congressional Budget Office projections.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the following:
Fiscal goals are important, and it is praiseworthy that this budget is trying to reach balance. Republicans have been calling for balance for years, and Chairman Black is to be commended for backing up her words with reconciliation instructions, a critical first step in achieving that ambitious goal.
We are pleased and relieved that the budget prohibits deficit-financed tax cuts and provides for a down payment in real deficit reduction. This is a hopeful sign that Congress recognizes the risks of growing budget deficits and that tax reform is not being used as a veil for tax cuts that add to the debt. And in another win for the nation’s bottom line, most of the revenue from economic growth in the budget is devoted to deficit reduction and not being used to offset tax cuts.
Chairman Black’s effort to use reconciliation instructions to require mandatory savings from various committees is an important action moment that could lead to real deficit reduction. There are many reasonable policy options available to committees to achieve the savings targets in the budget.
However, the budget calls for $4.3 trillion of savings, but the reconciliation instructions only require action on at least $203 billion – or just 5 percent of the budget’s goal, which is far less than what will eventually be required to reach balance.
There are also a few gimmicks inside this budget to note – including the continued use of OCO as a way to increase defense spending “off book” and unrealistically high economic growth projections given the lack of details on how to achieve it.
Economic growth should not be used to paper-over our dire fiscal picture. You base budgets off the likely, not the hopeful.
Trillion-dollar deficits are already projected to return by 2022 under current law, and debt is rising rapidly from today’s post-war era record high levels. Although this budget is moving us back in the right direction, there are many more steps needed to reach solid ground.
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