FY 2014 Budget Resolutions

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Summary of Chairman Paul Ryan's FY 2014 Budget Resolution

On March 12, House Budget Chairman Paul Ryan released the House of Representatives FY 2014 budget resolution titled “Path to Prosperity: A Responsible, Balanced Budget.” A budget resolution’s main purpose is to develop a framework to consider revenue, spending and other budgetary considerations including an overall spending limit. This is the third budget resolution drafted by Ryan, and this version contains similarities to previous proposals. The most noticeable difference is that by reducing the deficit by $4.6 trillion over the next 10 years, the plan would balance the federal government’s annual budget by FY 2023.  Ryan’s last two budget resolutions aimed for a balanced budget by 2040.
 
As for FY2014, Ryan proposes an overall discretionary spending total of $966 billion. This takes into consideration the second year of sequestration cuts scheduled from the Budget Control Act. Defense spending totals $552 billion while domestic discretionary spending receives $414 billion. “Path to Prosperity” effectively replaces sequestration with a new set of yearly caps that reduces discretionary spending. Ryan’s plan will offer budget reconciliation instructions to eight House Committees, and, if this process fails, plans to offer his deficit agenda through the regular legislative process.

 

Tax Reform:

  • Lower individual tax rates, with a goal of achieving a top individual rate of 25 percent.
  • Consolidate the current seven individual-income-tax brackets into two tax brackets with a first bracket of 10 percent; reduce the corporate tax rate to 25 percen.t
  • Repeal the Alternative Minimum Tax.
  • Transition the tax code to a more competitive system of international taxation.

Health Care | Human Services

  • Converts both Medicaid and the Supplemental Nutrition Assistance Program (SNAP) into a block grants.
  • Repeals Medicaid expansion and exchange subsidies in the Affordable Care Act.
  • Beginning in 2024, gives seniors the option of choosing the traditional Medicare option or a newly created Medicare exchange.
  • Rescinds administrative waiver authority of the work requirements for the Temporary Assistance for Needy Families (TANF) program.
  • Reform the medical-liability system.

Other Highlights

  • Consolidate job-training programs, based on reforms in the SKILLS Act which recently passed in the House.
  • Reform Pell Grants on maximum-award level grants.
  • Ensure most needy families receive higher education resources by undoing cost changes from the College Cost Reduction and Access Act of 2007.
  • Eliminate ineffective and duplicative federal education programs.
  • House committees of jurisdiction should terminate or reduce ineffective federal education programs.
  • Requires both the president and Congress to submit plans to shore up the Social Security Trust Fund.
  • Eliminate Fannie Mae and Freddie Mac.
  • Directs the House Agriculture Committee to reform farm-support programs and subsidies.
 

The full budget resolution can be viewed here


Summary of Chairwoman Patty Murray's FY 2014 Budget Resolution

A day after Ryan released his FY 2014 budget resolution, Senate Budget Chairwoman Patty Murray of Washington offered her 10-year federal fiscal vision by introducing the Senate budget resolution. Titled “Foundation for Growth: Restoring the Promise of American Opportunity,” Murray focused on “job creation, economic growth, and prosperity built from the middle out, not the top down.” As a reminder, the purpose of a budget resolution is to develop a framework for Congress to consider revenue, spending and other budgetary considerations including an overall spending limit. If adopted, the revenue and spending amounts designated make the basis for enforcement of budget policies through a point of order.
 
Murray’s proposal replaces sequestration and its $1.2 trillion in spending reductions with $1.8 trillion in spending cuts and revenue increases. Revenue will be sought through the reconciliation process, as the budget resolution calls upon the Senate Finance Committee to find $975 billion by Oct. 1, 2013. Also included is a jobs and infrastructure package with a cost of $100 billion. Similar to previous jobs plans proposed by the administration, it would provide funding for transportation infrastructure, job training programs and create an infrastructure bank. The Senate budget resolution doesn’t achieve a balanced budget within 10 years like its House counterpart intends to.
 
Tax Reform:

  • Achieve $975 billion in savings through elimination and/or modification of tax expenditures for the wealthy, although none are specified.
  • Targets business tax loopholes.
  • Possibly reduce tax rates if revenue goals are achieved.

 
Other highlights

  • Preserves reforms and implementation for the Affordable Care Act.
  • Protects funding for the Supplemental Nutritional Assistance Program (SNAP) and the nutrition program for Women, Infants and Children (WIC).
  • Increases funding for the Low-Income Home Energy Assistance Program (LIHEAP).
  • Proposes use of tax-credit bonds to fund roads, bridges and other infrastructure projects.
  • Fully funds broadband programs for rural communities and inner-city neighborhoods.
  • Invests in research and development funding for cybersecurity.
  • Increases funding for the Weatherization Assistance Programs and the State Energy Program.
  • Supports the permanent extension of the American Opportunity Tax Credit and the temporary enhancements to the Earned Income Tax Credit and Child Tax Credit.

The full budget resolution can be viewed here.