Congressional Republicans have promised to include deep spending cuts in their upcoming budget proposals and new data showing rising federal health care costs and a looming deficit increase will likely add to conservatives hunger for big funding reductions.
Federal health care costs are expected to jump to $936 billion in 2016, outpacing the $882 billion projected spending on Social Security, according to a report released Monday by the Congressional Budget Office. Those rising costs, paired with a huge dip in revenue from tax cuts enacted last month are expected to add up to a $544 billion budget deficit this year, according to Congress’ scorekeeper.
Conservatives like House Speaker Paul D. Ryan have long called for reducing spending on Social Security, Medicare and Medicaid and the Wisconsin Republican has vowed to propose changes to these entitlement programs as part of a “bold agenda” to be unveiled this year. One of the first steps in that plan is to release a fiscal 2017 budget proposal next month.
Republicans will likely use the latest data from CBO to justify proposing deep spending cuts to mandatory spending programs, but GOP leaders could face some tough questions when it comes to how much to provide for the 12 annual spending bills both Ryan and Senate Majority Leader Mitch McConnell (R-Ky.) want to move early this year.
Republican leaders agreed late last year to a deal that allows for $30 billion in new discretionary spending in fiscal 2017, an agreement that continues to rankle conservatives, particularly in the House.
But Republican budget leaders say they have no choice but to honor the deal struck with congressional Democrats and the White House.
Senate Budget Committee Chairman Mike Enzi (R-Wyo.) said that while the new deficit projections make it very difficult for Republicans to make good on promises to release plans to cut the deficit and balance the budget, reneging on the spending deal is not on the table.
“We can’t walk away from that commitment,” Enzi said last week.
The annual budget resolutions are traditionally vision documents, they do not become law, that allow parties to outline partisan priorities for the year ahead. But Ryan has been under increasing pressure from his most conservative members to also advance legislation that would put this vision into practice.
As Budget Committee chairman in recent years, Ryan famously authored proposals to balance the budget in 10 years by cutting entitlement programs while also cutting taxes. These plans helped elevate him to his role as the party’s thinker-in-chief and many conservatives, including members of the hard-line House Freedom Caucus, say they want him to take his new-found power as Speaker to try and make those lofty goals a reality.
So far Republican leaders have been vague about what they plan to actually propose. House Budget Committee Chairman Tom Price (R-Ga.) said last week that he is working on a budget that includes policies he argues would allow businesses to grow, but he did not provide specifics.
“House Republicans are hard at work putting together a plan that presents bold, positive solutions to address our economic and fiscal challenges,” Price said in a statement. “We will save and strengthen vital health, retirement and economic security programs that must be reformed if we are to keep those promises to future generations.”
The new data released Monday helps sharpen the narrative that congressional Democrats and President Obama are to blame for increased spending. The CBO found that Medicaid spending increases are the direct result of more people becoming eligible for the program as a result of changes mandated by the president’s health care law, the Affordable Care Act. The government is also expected to spend $56 billion on federal health insurance subsidies for 11 million people in 2016.
Republicans are facing questions about their role in the growing debt as well.
Deficit hawk groups complain that Republicans failed to stick to proposals they released the past two years and have relied on budget gimmicks to make the numbers work for balancing the budget. The projected deficit increase is not likely to ease that criticism.
“They didn’t even stick with the constraints of their own budget last year and it this year it will be even more difficult,” said Maya MacGuinneas, president of the bipartisan Committee for a Responsible Federal Budget.