This week, House Budget Committee Chairman Paul Ryan (R-WI) proposed a House Budget Resolution that would cut $5.1 trillion billion in total federal spending over the next 10 years. Overall, Ryan says his proposal would produce a $5.3 trillion reduction in budget deficits through 2024.
The annual budget resolution, often referred to as a “congressional budget blueprint,” sets revenue and appropriations targets for the tax writing and appropriations committees, so they can begin work on the president’s budget request. This is an internal congressional procedure, so a passed budget resolution is not sent to the president for approval.
Ryan said his plan, called the “Path to Prosperity,” will reduce the deficit and maintain low interest rates “which will spur greater investment and productivity.” Three-quarters of the $5.1 trillion in total spending savings would come from lower mandatory spending. Major changes to the Affordable Care Act would produce $2.1 billion in reduced spending, according to the Ryan plan. Changes to Medicaid and other mandatory programs would yield another $1.7 billion in spending cuts. Interest payments would also be $783 billion lower, according to the plan. Reduced discretionary spending (from funding provided in appropriations acts) would account for only $460 billion over 10 years (less than 9 percent of total spending savings) in the Ryan proposal.
The Ryan budget would not change the FY 2015 budget request for national defense (DoD plus other defense-related spending, such as the Department of Energy’s nuclear program) and nondefense discretionary budgets. However, beginning in FY2016 the plan would set defense budgets above the level called for in the Budget Control Act (BCA) in each year through 2024, adding $483 billion. For the same period, Ryan’s plan would cut nondefense budgets by almost $800 billion.
The Ryan plan states that major mismatches exist in current U.S. defense policy: between threats and resources and between the administration’s stated policy and its budget plan. His budget resolution proposes “to resolve these contradictions by restoring defense budgets to the levels dictated by the national security interests of the nation.” While Ryan states the president’s proposed troop cuts go too far, he says any troop reductions should be accompanied by cuts in the civilian and contractor workforce. He expresses concern about rising costs of military personnel and supports the work being done by the Military Compensation and Retirement Modernization Commission to assess compensation plans and make recommendations to DoD.
Ryan also proposes to reduce the cost of the federal workforce. His plan would cut the federal workforce by 10 percent, primarily through attrition, by allowing the hiring of only one new employee for every three workers who leave federal service. The plan would also eliminate a program that allows federal agencies to repay student loans for federal employees, which is often used as a recruiting and retention tool.
The Ryan budget would require federal employees to contribute more to their retirement benefit, in line with recommendations from the National Commission on Fiscal Responsibility. Last year, the president proposed to increase federal employee pension contributions, but Congress took no action. This year the president did not include such a proposal in the FY2015 budget request.
The House Budget Committee has approved the Ryan plan and the full House is set to consider it next week.. However, the Democrat-controlled Senate will not act on a budget resolution this year. Senate Majority Leader Harry Reid (D-NV) and Senate Budget Committee chair Sen. Patty Murray (D-WA) have said there is no reason for the Senate to consider a House Budget Resolution or to produce a Senate budget resolution because the BCA set the FY2015 and FY2016 funding levels.