As the October 1 deadline for funding the federal government for fiscal year 2018 approaches, the U.S. House of Representatives Budget Committee has approved House Concurrent Resolution 71, the proposed budget for the next Fiscal Year, placing it on the calendar for consideration by the full House of Representatives.
The bill proposes approximately $1.1 trillion in total spending, including a $97.6 billion increase in military spending, and proposed reforms to mandatory spending, such as food-stamp programs, Medicaid, and Medicare, estimated to save $203 billion.
The budget assumes tax reforms will increase economic output by about 2.6 percent annually over the next ten years, predicting the added growth will reduce the federal deficit by $15 billion in Fiscal Year 2018 and lead to a $9 billion annual budget surplus by 2027.
Calls for Spending Cuts
Lawmakers should implement spending cuts to reduce the deficit, instead of using economic growth projections to make the numbers work, says Justin Bogie, a senior policy analyst in fiscal affairs for The Heritage Foundation.
“Instead of relying on that [economic growth] to balance, they should really be looking at the entitlement reform side,” Bogie said. “They don’t do anything to Social Security. They also only had about $5 billion in discretionary cuts in 2018. They should rely on more concrete things that are within their control, like entitlement reform and cutting spending.”
‘What’s Really Important’
Slowing the growth of the debt should be a top priority, Bogie says.
“What’s really important is getting the debt-to-GDP [ratio] on a downward trajectory,” Bogie said. “Balancing the budget is certainly the right approach to doing that. Social Security, healthcare spending, and net interest are going to be the biggest expenditures in a couple of years. In 20 years, they’re going to overtake all federal revenue. Until they address that, even if they do balance in the tenth year, they’re not going to stay in balance very long, unless they make reforms to those programs.”
‘It’s a Messaging Document’
Andrew Roth, vice-president of government affairs at the Club for Growth, says lawmakers have to stop talking about fixing spending and start making the necessary cuts.
“The House budget is largely a political document,” Roth said. “It’s a messaging document. What we want to see is action.
“All Republicans are on record supporting all kinds of great reforms from the previous Ryan budget, when he was head of the budget committee,” Roth said. “Again, those were just messaging documents. They never summoned up the courage to actually tackle those pro-growth things: personal accounts for Social Security, block-granting Medicaid, premium support for Medicare, and block-granting food stamps.”
Dragging Down the Economy
Government debt is holding back the country’s economic growth and individuals’ prosperity, Roth says.
“It is definitely a hindrance, and it’s a drag on the economy,” Roth said. “If they can tackle the spending’s growth rate, and couple it with pro-growth tax reform, they’ll start to get things under control.”