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House budget plan seeks deficit reduction

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House budget plan seeks deficit reduction

But does it rely on questionable spending and revenue assumptions?

Fiscal watchdog The Concord Coalition today welcomed the proposed House budget resolution for its goal of reining in future deficits but cautioned against assumptions of reduced spending that are vague and unrealistic, and against revenue projections that are at odds with recent tax-cut legislation in the House.

"Balancing the budget by a specific date provides a clear, understandable goal to guide legislation," said Robert L. Bixby, Concord's executive director. "As an economic matter, however, the more relevant concern is not whether balance is achieved in a targeted year but whether the policies enacted pursuant to this budget reduce the debt as a share of the economy and make sure that it remains on a responsible downward path." 

"They can't have it both ways; they shouldn't be counting on revenue from taxes they say the government shouldn't be receiving."

The House budget plan achieves much of its proposed $5.6 trillion in deficit reduction over 10 years from a number of policy assumptions that would be very difficult to achieve. It assumes $2 trillion in savings from repeal of the Affordable Care Act (ACA), $913 billion from block granting Medicaid, $1 trillion in unspecified other cuts in mandatory spending, and $759 billion in domestic discretionary cuts below the caps set by the Budget Control Act. Only $148 billion would come from Medicare, while hardly anything would be done on Social Security and there would be no new revenues. Meanwhile, defense spending would increase by almost$400 billion above current-law spending caps.

The budget resolution also raises defense spending in Fiscal 2016 by increasing funding for Overseas Contingency Operations (OCO) well above the administration's request. This raises the prospect that OCO funding might be improperly used to bolster parts of the defense budget not directly related to war efforts -- as has occurred in the past.

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