H.Con.Res. 96, Establishing the budget for the United States Government for FY 2015 and setting forth appropriate budgetary levels for FY 2016-2024

H.Con.Res. 96

Establishing the budget for the United States Government for FY 2015 and setting forth appropriate budgetary levels for FY 2016-2024

Sponsor
Rep. Paul Ryan

Committee
Budget

Date
April 8, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Tuesday, April 8, 2014, the House will begin consideration of H.Con.Res. 96, a concurrent resolution Establishing the budget for the United States Government for fiscal year 2015 and setting forth appropriate budgetary levels for fiscal years 2016 through 2024, under a rule. H.Con.Res. 96 was released on April 1, 2014 by Budget Committee Chairman Paul Ryan (R-WI). It was marked up on April 2, 2014 by the House Budget Committee and was ordered reported by a vote of 22-16.[1]

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[1] Committee Report 113-403.

Bill Summary

H.Con.Res. 96 establishes the budget for fiscal year 2015 and budget levels for fiscal years 2016 through 2024. The budget achieves balance by 2024, reducing total spending by $5.1 trillion over the next ten years. According to the House Budget Committee, the budget reaches this goal by addressing the following key areas:

Protect the Nation: The budget rejects the President’s requested cuts to national security. “It provides equipment, training, and compensation” consistent with ensuring the continued success of our military. It also fully funds our commitment to veterans.[2]

Expand Opportunity: The budget proposes higher education, job training, and tax reform policies to foster economic growth. Specifically, the budget “adopt[s] a sustainable maximum-award level for Pell” and “tailor[s] aid for higher education to the truly needy.”[3] It also “eliminate[s] ineffective and duplicative education programs” and “consolidate[s] job-training programs, as in the SKILLS Act, into career-scholarship fund.”[4] The resolution embraces comprehensive tax reform aimed at simplifying the tax code and making the system fairer and more competitive with the rest of the world. Although it does not embrace one specific approach, the resolution supports tax reform efforts that would lower individual tax rates with a goal of achieving a top individual rate of 25%; consolidate the current seven tax brackets into two brackets; repeal the Alternative Minimum Tax; reduce the corporate tax rate to 25%; and transition to a more competitive system of international taxation.[5]

Strengthen the Safety Net: The budget converts the Supplemental Nutrition Assistance Program (SNAP) into state block grants after 2019, giving states the time and flexibility to tailor the program to meet their citizens’ needs and ensure dollars are going towards those who need them most. It also enhances the welfare work requirements under SNAP. The budget converts Medicaid into state block grants, “empower[ing] reformers at the state level to strengthen and secure” the program.[6] It also repeals the Medicaid expansion called for under Obamacare. Additional reforms include 1) eliminating the abuse of the Low Income Home Energy Assistance Program (LIHEAP), which provides low-income families with help to pay heating bills; 2) eliminating the failed Troubled Asset Relief Program (TARP) housing subsidies; 3) reforming Supplemental Security Income (SSI) to create a sliding scale of benefits for children on SSI and to review mental-health categories in the children’s SSI program; and 4) eliminating the ability of individuals to receive both Unemployment Insurance benefits and Disability Insurance benefits.

Secure Seniors’ Retirement: The budget repeals all of Obamacare, including the Independent Payment Advisory Board. It preserves Medicare for those in or near retirement, and strengthens the program for younger generations. Specifically, those who enter Medicare before 2024 will remain in the traditional Medicare system and the program and its benefits will be unchanged. For future retirees—those who enter the program in 2024—the budget proposes a “premium support” approach that allows retirees to choose between “private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange.”[7] Retirees would receive a premium-support payment to pay for or offset premiums. The budget also ends Obamacare’s raid on the Medicare Trust Fund and instead directs any potential Medicare savings towards shoring up the program. The budget begins the process of Social Security reform by requiring both the President and Congress to submit plans to restore balance to the Social Security Trust Fund. The budget reduces the size of the federal workforce and reforms civil-service pensions by “call[ing] for federal employees—including Members of Congress and staff—to make greater contributions toward their own retirement.”[8]

Restore Fairness: The budget strengthens American energy security by expanding energy production. It scales back corporate subsidies in the energy industry and restores competition in the energy sector. The budget rescinds unobligated balances in the Department of Energy’s Green Subsidies and Loan Portfolio and repeals stimulus-driven borrowing authority for green transmission. It eliminates corporate welfare within the Department of Commerce by removing subsidies to businesses, which “distort the economy” and “impose unfair burdens on taxpayers.”[9] The budget calls for privatization of the government-controlled Fannie Mae and Freddie Mac mortgage giants and institutes fair-value accounting principles to score federally backed mortgages and mortgage-backed securities.

Reform the Budget Process: The budget reforms the budget process in several ways. It would “Extend the Budget Control Act’s federal spending caps through the end of the budget window; create a budget point of order against legislation that increases net mandatory spending beyond the ten-year window, a limitation that can help check Congressional appetite to create costly open-ended entitlement programs; close the loophole that allows discretionary limits to be circumvented through advance appropriations; require that the costs of legislation related to housing be calculated on a fair-value basis and authorize the use of fair-value costs estimates for other credit programs; and call on congressional committees to regularly review programs for waste, fraud, and abuse.”[10]

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[2] Id. at 6.
[3] Id. at 7.
[4] Id.
[5] Id. at 71-72.
[6] Id. at 7.
[7] Id. at 80.
[8] Id. at 84.
[9] Id. at 59.
[10] Id. at 9.

Background

The Congressional Budget Act of 1974 sets forth the federal budget process, including the requirement that Congress produce a budget each year. House Republicans have consistently fulfilled this obligation in recent years, most recently on March 21, 2013 by passing H.Con.Res 25 by a vote of 221-207 (Roll Call #88). In contrast, the Senate failed to pass a budget for almost four years. The House sought to compel the Senate to reestablish the normal budget process through H.R. 325, No Budget, No Pay Act and H.R. 444, Require a Plan Act. Ultimately, on March 23, 2013, the Senate passed a budget.

On October 17, 2013, the House agreed to conference its budget resolution with the Senate. The conference committee produced the Bipartisan Budget Act of 2013 (BBA), which was enacted in December of 2013. H.Con.Res. 96 retains the BBA’s overall spending cap of $1.014 trillion for FY 2015 and the levels for defense and non-defense discretionary spending set by the BBA for FY 2015. However, H.Con.Res. 96 provides an alternative to the status quo by setting forth priorities of House Republicans that will get the economy growing, bolster our defense, strengthen Medicare, reform government, and stop spending money we don’t have.

Cost

There is no score associated with the budget resolution.

Amendments

1) Rep. Mulvaney (R-SC) Substitute Amendment #3 The substitute Amendment inserts the text of the President’s Budget for Fiscal Year 2015. The President’s budget adds $3.9 trillion more to the public debt than the House Republican Budget over ten years, and never achieves balance. Relative to the House Republican Budget, the President’s budget increases total spending by $6.1 trillion. The President’s budget increases total spending by $791 billion over 10 years, and requests an additional $56 billion above the discretionary cap of $1.014 trillion set by the Bipartisan Budget Act of 2013. Cumulative deficits would increase by $3.1 trillion more than in the House Republican Budget, and gross debt would climb to $25 trillion in 2024. Moreover, the President’s plan nearly quadruples interest costs from $223 billion this year to $812 billion in 2024. The President’s budget increases taxes by $3.1 trillion relative to the House Republican Budget. Roughly half of the President’s requested tax increases will be dedicated to new spending rather than deficit reduction. $400 billion in new spending in the President’s budget is dedicated to new stimulus “investments,” including surface transportation reauthorization, early childhood investments, an expansion of the Earned Income Tax Credit (EITC), and other investments in education and infrastructure (such as the new “Opportunity, Growth, and Security Initiative”). Much of this new spending would be paid for with tax increases. The President’s budget would also decrease defense spending by $283 billion relative to the House Republican Budget.

2) Reps. Fudge (D-OH), Scott (D-VA), Moore (D-WI), and Lee (D-CA)/Congressional Black Caucus (CBC) Substitute Amendment #2 The CBC substitute increases total spending relative to the Republican budget by $6.7 trillion over the next ten years. It raises taxes by $2.3 trillion over the next ten years and increases the national debt by $4.3 billion relative to the Republican budget. Compared to the Republican budget, the CBC proposal has $4.5 trillion in higher deficits and cuts defense spending by $294 billion, proposing even smaller levels than those requested by the President. It increases the minimum wage to $10.10 per hour, despite a finding by the nonpartisan CBO that this would eliminate 500,000 jobs. It calls for an additional $13 billion in spending to be poured into job training programs, even though the Government Accountability Office has reported that forty-seven overlapping Federal job training programs spent approximately $18 billion in 2009. It calls for even more spending on the “green economy,” ignoring the $16 billion already spent by the Administration on “stimulus” grants in this area. It increases transportation spending by billions, largely directing the funds towards the creation of a nationwide high-speed rail network instead of the core highway system. It increases spending on the Supplemental Nutrition Assistance Program (SNAP) by reinstating the bipartisan reductions made in the most recent Farm Bill. It increases tax revenues by limiting the deductibility of corporate debt interest payments; taxing capital gains and dividends as ordinary income; enacting a 5.4% “surcharge” on high earners; and increasing the estate tax rate from 40% to the 2009 level of 45%.

3) Reps. Ellison (D-MN), Grijalva (D-AZ), Pocan (D-WI), Lee (D-CA), Edwards (D-MD), Schakowsky (D-IL), McDermott (D-WA)/Congressional Progressive Caucus Substitute Amendment #5 The Progressive Caucus substitute increase total spending relative to the Republican budget by $8.4 trillion over the next ten years. It raises taxes by $6.6 trillion over the next ten years and increases the national debt by $2.4 trillion relative to the Republican budget. The Progressive Caucus substitute increases deficits $2.0 trillion relative to the Republican budget. It cuts defense spending by $476 billion compared to the Republican budget, which would bring defense spending lower than the post-sequester levels. It increases spending for the broken federal job training system; pours more into SNAP; and creates a federal infrastructure bank. It also includes the comprehensive immigration bill that was reported by the Senate Judiciary Committee. In order to increase tax revenues, the Progressive Caucus substitute complicates the tax code by adding five new tax brackets for upper-income individuals and small businesses, and reverts back to Clinton-level rates for those making more than $250,000. It taxes capital gains and dividends as ordinary income—i.e. at rates as high as 49%; institutes a “progressive” estate tax with rates between 55% and 65% (up from the current rate of 40%); caps the benefit of itemized tax deductions at 28%; and imposes a carbon tax.

4) Reps. Woodall (R-GA) and Scalise (R-LA)/Republican Study Committee (RSC) Substitute Amendment #6 The substitute Amendment inserts the text of the Republican Study Committee’s (RSC) Budget for FY 2015. The RSC Budget balances by fiscal year 2018 (within four years). It reduces average outlays to 18.1 percent of GDP, and beginning in fiscal year 2015, freezes discretionary spending levels at $950 billion for five years, until the federal budget is balanced. Non-defense discretionary spending decreases under the RSC Budget from $429 billion in 2015 to $374 billion in 2024. The RSC Budget also increases defense spending from $521 in FY 2015 to $696 billion in FY 2024, the same level as the House Republican Budget. Moreover, the RSC Budget repeals Obamacare, eliminating $2.1 trillion spending over ten years, and replaces it with RSC’s American Health Care Reform Act. The RSC Budget also makes changes to Medicare, increasing the Medicare eligibility age at a rate of two months per year, beginning in 2024, until the full age of eligibility reaches 67. Changes in Social Security follow a similar path, increasing the full-retirement age for social security benefits by two months per year beginning in 2022 until the full retirement age reaches 70. The RSC budget would change the formula for cost of living adjustments (COLA) in Social Security by adopting the chained CPI measure of inflation, which takes into account consumer choice. Additionally, the RSC Budget provides states with the flexibility to determine Medicaid eligibility benefits. The RSC proposal also calls for the enactment of the RSC’s Jumpstarting Opportunities with Bold Solutions (JOBS) Act, and proposes tax reform that is revenue neutral on a dynamic basis and sets a top rate of 25 percent.

5) Rep. Van Hollen (D-MD)/Democratic Caucus Substitute Amendment #15 The Amendment raises taxes by an additional $1.8 trillion, increases spending by more than $740 billion — $5.9 trillion more than the Republican budget, increases deficits and debt by $4.3 trillion respectively, and never reaches balance. In fact, the deficit in 2024 is projected to be $637 billion despite a $1.8 trillion tax increase. The Democratic substitute decreases defense spending by $294 billion relative to the Republican budget and offers no strategy for tackling entitlement programs, including healthcare. For example, rather than putting Medicare on path to sustainability, the Democratic substitute continues to allow an unelected panel of 15 bureaucrats to make health care decisions for America’s seniors.

Additional Information

For additional information, see the following materials provided by the House Budget Committee:

Facts and Summary
Charts and Graphs
Setting the Record Straight
Summary Tables
Medicare Briefing

For questions or further information contact the GOP Conference at 5-5107.