Senate Republicans offered their first budget since 2006, when it last held the majority. The plan reaches a surplus in ten years, increases defense spending, repeals ObamaCare, calls for changes to the tax code, and makes reforms to government entitlement programs.
U.S. Senator Mike Enzi, R-Wyo., chairman of the Senate Budget Committee (pictured above), stated regarding the plan:
Today we begin the monumental task of confronting our nation’s chronic overspending and exploding debt, which threatens each and every American. Make no mistake, our fiscal outlook is grim and has been ignored for far too long.
The Senate plan cuts $5.1 trillion over ten years to balance, versus the House budget, which cuts $5.5 trillion to get the same result in nine years. Overall, the budget cuts $4.1 trillion in mandatory spending and $97 billion from discretionary programs.
Two trillion in savings comes from the repeal of ObamaCare. Some other specific cuts include $430 billion in savings to Medicare, $600 billion from welfare programs, and $400 billion in savings to Medicaid by converting it to block grants to the states like the current Children’s Health Insurance Program (“CHIP”) is administered.
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The Senate plan, unlike the House budget, does not call for a conversion of Medicare from a defined benefit program to a defined contribution program. Under the House reform, those eligible for Medicare who enroll in 2024 and going forward would receive premium payments from the federal government, which they would use to purchase healthcare coverage from private insurers.
Another area of disagreement between the Senate and the House regards defense spending. The House budget calls for $90 billion going to Overseas Contingency Operations, while the Senate plan designates $58 billion. President Obama had requested $64 billion in his budget. Funding the OCO fund is a way lawmakers can get around the Sequestration cuts, which are still in effect.
The Senate plan does not offer specifics regarding tax reform, but balances without increasing taxes and sets a target for tax revenue to the federal government as a percentage of GDP at 18.2 percent, which is near the historic norm of 18 percent and slightly higher than the House plan of 18.1 percent.
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