New York (MainStreet) - Give credit where credit is due. Last week’s Republican House budget is one of the sneakiest documents to come out Congress in a long time. Despite the headlines grabbed by this 43-page plan, the drafters held some of their biggest ideas for the fine print. The biggest? A virtual end to federal regulation.
There have been, by now, millions of words written about this budget. Amid the noise, the average American can be forgiven for wondering: politics aside, how will this budget affect me?
There are two answers to that.
First, it won’t. A budget proposal is a plan. It’s a statement of policy and doesn’t actually authorize or limit actual spending on its own. This is why, in fact, the budget needs only majorities in both houses to pass. It avoids the filibuster and presidential signature, because a budget isn’t law. It requires future laws to enact, which will go through normal political channels.
Still, this is a plan. It’s a statement of policy that the majority party would like to enact. So, if actually enacted, how would this budget impact the lives of citizens? In a word, badly.
First, this budget would cripple federal regulation. This might seem like a problem for the lawyers, but the truth is that 90% of citizens interact with the federal government through its agencies and the regulations they pass. Think food standards, clean air laws, drug oversight, law enforcement and, yes, even taxes and you’ll have the picture. Yet in one of its least-noticed, but most meaningful, provisions this budget would dramatically change the way those agencies can do business.
Omitted from the 43-page plan, this passage slips in on page 127 of the legislative text and calls for “a formal rulemaking process” on all regulations worth over $100 million (given the size of the federal government, this is virtually all regulations of consequence). “Formal rulemaking” is one of two ways that agencies can pass a new regulation. It’s a trial-like process that’s both time consuming and expensive, so agencies rarely use it in favor of “informal rulemaking,” which only requires 90 days for publication and comment. Passing even one regulation through formal rulemaking is difficult enough. For an agency to try and do all of its business that way would be virtually impossible, and that may well be the point.
Federal regulation touches almost every aspect of our lives, and this new requirement would drag down everything from net neutrality to banking regulations and environmental enforcement. It wouldn’t necessarily kill federal regulation, but there’s a reason agencies almost never use the formal rulemaking process. Active governance would quickly rely on Congress to pass laws for every situation. This is the body which recently failed to pass an overwhelmingly popular human trafficking bill, because one senator insisted on putting in a clause about abortion.
It’s difficult to overstate just how big a deal this would be.
In addition to kneecapping federal regulation, Americans could expect two immediate results from this budget: more debt and less health care.
In theory, the guiding principle of the Republicans’ budget is the elimination of national debt. In fact Representative Tom Price (R-Ga.) is so committed to this vision that he actually includes a call for the Balanced Budget Amendment to the U.S. Constitution in the proposed bill. This is, in itself, a laudable (if debatably critical) goal. In reality, however, this budget would do nothing of the sort. Quite the opposite in fact.
Rep. Price proposes to cut spending by $5.5 trillion in order to eliminate the national debt over 10 years. The math that gets him there, though, is… fuzzy. He starts by disavowing any new revenue, cutting taxes on corporations and eliminating the alternative minimum tax.
This budget considers those tax revenue neutral through dynamic scoring. It assumes that they will bring in an additional $148 billion through increased macroeconomic activity nationwide. This type of accounting, called dynamic scoring, has been completely dismissed by the OMB as unreliable and speculative. In response, Rep. Price calls for a law requiring the OMB to dynamically score all future tax legislation.
In fact, tax cuts would get even easier to pass as (once again buried in the legislative text) this budget would make it forbidden to use spending offsets or tax increases when extending existing tax cuts. Good for those taxpayers, bad for the federal bottom line. Hopefully this won’t make the process too easy, however, as the budget counts on $900 billion in revenue from tax cuts due to expire, as long as no one extends first.
The budget also doesn’t expects the IRS to lose tax revenue even after it repeals Obamacare entirely, along with the law’s additional taxes and anticipated savings.
After dismissing all new revenue, this budget then attacks spending by demanding a paltry $5 billion in savings. That’s billion with a “b,” approximately one-one hundredth of what this budget says it needs to close the fiscal gap. Even this demand is itself internally inconsistent, as when line-itemed the bill only actually requires congressional committees to propose $4.63 billion in savings.
How does Rep. Price’s budget deal with this? By tacking $1 trillion in unspecified “mandatory cuts” onto the appendix. Even when pressed, the authors have not explained what that means or where the money will specifically come from.
Over and over the taxing and spending section of this budget hits one theme: the numbers just don’t add up. This budget stakes its reputation on wildly optimistic assumptions, then requires the government’s own accountants to use the same in all of their work moving forward. It pledges huge spending cuts, then announces that they are all TBD. It wants to cut taxes, but doesn’t want to anticipate actually losing any tax revenue afterward.
The budget’s authors open their plan by promising not to “rely on gimmicks or creative accounting tricks to balance the budget,” then tuck a magic asterisk into the appendix. For the average American that debt will sooner or later become something very real, most likely in the form of higher taxes.
At the same time. this budget would also eliminate health care for millions of Americans.
One of the first orders of business here is the full repeal of Obamacare. Aside from the reformation of federal regulation, this is probably the measure which would have the most immediate impact on quality of life for citizens.
It would kick at least 15 million people off their health care plans on day one, and that number is probably conservative. Although this budget promises to “[start] over with a patient-centered approach to health care reform,” we have absolutely no details about what that approach would look like. Given how often the Republican Party has vowed to come up with a working alternative to Obamacare, it is reasonable at this point to conclude that they simply don’t have one.
There is no Republican alternative to Obamacare. There never was. Those 15 million people would simply be out of luck.
Medicare would become a voucher program. Although this budget proposes vouchers that would run alongside traditional Medicare’s single payer model, it also offers them only for coverage starting in 2024 and after. This in and of itself should give Americans pause for thought. After all, if the goal is truly nothing less benign than a form of “Medicare-plus,” where recipients can shop from a new package of services, why wait?
When Congress promises to keep its government hands off Medicare, but only for current recipients, it’s time to start checking for our collective wallets.
Meanwhile Medicaid would face steep cuts in funding a transformation from a state run, federally supported program into a block-grant. This, the budget proposes, will give states the flexibility that comes from having far less money to spend. Most Americans can sympathize, as well all know how much more nimble and creative we feel at the end of the month.
In total, there would simply be less health care coverage.
At the same time, personal student debt would climb. As part of its education cuts this budget targets Pell Grants to students from “high income” households. On its surface this has a basic sort of appeal. If the country has a genuine choice between asking Travis’ parents or the taxpayers to supplement his lacrosse scholarship, it’s a no-brainer. Unfortunately, this isn’t how things always work. Rep. Price has forgotten that parents’ income and a student’s income are not always the same thing.
Many students have “high income” families that either can’t or won’t pay their tuition. With the costs of a single year at college soaring higher than most personal incomes, it’s no surprise that many families can’t foot the bill. As Pell Grants go down our debtor generation only gets larger and more mired in debt, a consequence that would bite both current and incoming students.
Finally, social aid programs face steep cuts in this budget as part of its balancing act. Alongside Medicaid, food stamps would be converted to a block-grant program, ending one of the federal government’s most successful safety nets in favor of a general hope that each and every state would get it right. (For those curious as to how that generally works out, see how many states have rejected the ACA’s expansion of Medicaid.)
While there is much in this budget, including rolled back regulations on Wall Street, these are all issues on a slow burn. That they have the potential to impact Americans is undeniable, as anyone who remembers 2008 can attest. However, for readers curious about how this budget would affect their lives in the short term it guarantees three things: more debt, less health insurance and far less federal regulation.
--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website A Wandering Lawyer.