If Republicans serving on the House Budget Committee have their way, 2013 would be the year that Congress overhauls the tax code, makes major changes to entitlement programs, and further reduces government spending. The panel endorsed a proposal last week that would cap government spending in fiscal year (FY) 2013 at $3.5 trillion. The budget resolution passed by a margin of one vote, with two Republicans joining all of the Democrats on the committee in opposition.

According to Budget Committee Chairman Paul Ryan (R-WI), the plan would cut government spending over the next decade by $5 trillion more than the plan President Obama released in February. Proposed savings would come from repealing health care reform, changing Medicare, and cutting domestic spending.

Discretionary spending, which includes transportation, education, research and development, environmental initiatives, and other programs, would be capped at $1.028 trillion in FY 2013. This is $19 billion less than the spending cap Congress agreed to last year in the debt limit deal.

Democratic leaders in the Senate have voiced their support for abiding by the higher spending cap set in the Budget Control Act. In a written statement, Senate Appropriations Chairman Daniel Inouye (D-HI) said “differing top line numbers lead to needless delay and in the end, no one should doubt that the Senate will not move forward from the agreed upon level of $1.047 trillion for discretionary spending.”

The two chambers also disagree on how to deal with $1.2 trillion in automatic cuts that are scheduled to begin in January 2013. The spending “sequester” would occur because a special congressional panel created by the Budget Control Act was unable to agree on a plan to reduce expected deficits over the next decade. If sequestration happens, $43 billion would be cut from the appropriated discretionary spending level in FY 2013; defense spending would be cut by $55 billion. These reductions would come on top of any spending cuts (or increases) agreed to by Congress through their annual appropriations bills. Defense leaders have already warned that a budget sequester could cause long lasting and severe challenges.

The White House was quick to point out the potential impacts of the House budget resolution. According to a blog post by Jeff Zients, acting director of the White House Office of Management and Budget, the House proposal would cut non-defense funding by 5 percent this year and by 19 percent in 2014. “Investments in science, medical research, space, and technology would be cut by more than $100 billion over the next decade,” wrote Zients. “The number of new grants from NIH for promising research projects would shrink by more than 1,600 in 2014 and by over 16,000 over a decade, potentially curtailing or slowing research to fight Alzheimer’s disease, cancer, and AIDS. The National Science Foundation would cut over 11,000 grants over the next decade, eliminating support for over 13,000 researchers, students, and teachers in 2014 alone.”

If enacted, the House budget resolution would not have the force of law. Rather it would set the funding limits for the annual spending bills prepared by the House Appropriations Committee.

 


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