Conservatives are making a fresh push to spread their message of fiscal discipline after new estimates that the Medicare and Social Security trust funds will soon be depleted, and amid talk of a $2 trillion infrastructure spending package and busting discretionary spending limits.
The House Republican Study Committee released a budget proposal Wednesday that assumes cutting $12.6 trillion in spending over a decade and eliminating the deficit within six years.
Other GOP lawmakers and conservative groups delivered a similar message on Tuesday, with an emphasis on overhauling entitlement programs such as Social Security and Medicare. House Ways and Means ranking member Kevin Brady and a panel of conservative groups said they were looking at longer-term budget problems.
Republicans did not succeed in overhauling entitlement programs when they were in control of both chambers of Congress as well as the White House. GOP leaders also negotiated budget deals in 2015 and 2018 that raised discretionary spending caps, against the will of many conservatives.
But conservative leaders say they believe there is a growing recognition of the need to readdress the budget.
The RSC budget released Wednesday is meant as a “playbook” for what Republicans could try to do if they regain control of the House next year, said Louisiana Rep. Mike Johnson, chairman of the conservative group.
“I’m one who believes and well admits that Republicans have lost the moral authority when it comes to spending in Washington,” added Indiana Rep. Jim Banks, who chairs the RSC budget and spending task force.
Johnson said the budget proposal is “our effort to claim and reclaim that moral ground on this.”
RSC leaders praised President Donald Trump and his budget proposals but expressed concern about how a potential $2 trillion infrastructure proposal would be paid for. “It should be a high priority,” Johnson said of infrastructure development. But he asked, “Are there offsets? We have a spending problem.”
The White House has not yet proposed a way to pay for an infrastructure plan.
Like past RSC budgets, this one assumes high defense spending in line with what Republican defense hawks want, deep cuts in nondefense spending, tax cuts and an overhaul of entitlement programs.
Under the plan, the fiscal 2020 defense limit would be $745 billion and the nondefense limit $349 billion — which is $248 billion or 42 percent below fiscal 2019 nondefense funding of $597 billion.
Back on the radar
During a panel discussion Tuesday hosted by the FreedomWorks Foundation, Brady said conservatives need to put entitlement programs “back on America’s radar.”
The Texas Republican cast a wide net on what needs to be addressed while hinting at legislation that might be forthcoming from the GOP.
“What we know for certain is that it’s time to come together to achieve thoughtful redesigns of Social Security, Medicare, food stamps, and welfare,” Brady told the group of think tank officials and aides to GOP conservatives. He said one Republican principle would be to avoid payroll tax increases to shore up Social Security like those proposed by several Democrats, which he said would “rob from local businesses and our younger workers that they never recoup throughout their lifetimes.”
Bills from both Connecticut Democratic Rep. John B. Larson and Vermont independent Sen. Bernie Sanders would address Social Security’s pending insolvency by raising taxes and removing the exemption on higher levels of income from payroll taxes, while also increasing benefits. Several presidential candidates have also jumped on board the concept of expanding Social Security benefits, and support for “Medicare for All” policies have become a rallying cry on the left and almost a litmus test for Democratic candidates.
Last week, Social Security trustees reported that the trust funds would spend their current $2.9 trillion cushion and be insolvent by 2035. After that, benefits would have to be cut by 20 percent or more to erase what is projected to be a nearly $14 trillion shortfall over the next 75 years. Likewise, Medicare trustees said their Hospital Insurance Trust Fund will be depleted by 2026 when it will be able to cover just 89 percent of its obligations, a figure that is projected to drop to 77 percent over the following two decades.
Rachel Bovard, senior director of policy at the Conservative Partnership Institute, described the problem and opportunity for addressing these crippling shortfalls as generational.
Making any changes to benefits at Social Security and Medicare was long known as “the third rail of politics.”
“I think for a long time that was true” with baby boomers crying “keep your hands off my Medicare,” she said. But that is changing, Bovard said, as millennials grow increasingly skeptical of programs they don’t believe will be around for them when they retire, and, therefore, will be resistant to solutions that involve payroll tax increases they have to bear now.
“There is a shift going on, which I think is interesting to watch,” she said.
Brady also foreshadowed a reintroduction of a budget bill he unsuccessfully pushed in 2011 and 2015. The legislation would cap both discretionary and mandatory spending at a percentage of “full employment” gross domestic product, which is a less conservative measure that removes the fluctuations to GDP caused by recessions. Spending over those levels would trigger across-the-board spending cuts
While Tuesday’s event was about the debt and deficits, Brovard and others acknowledged the biggest problem was ennui and the saturation effect of trillion-dollar deficits, big-spending initiatives and tax cuts.
“The issue, I think, that’s more pressing right now is that no one seems to care about this issue,” she said.
Romina Boccia, director of the budget policy group that the Heritage Foundation launched last year, agreed. The theory that government should spend money during a recession to stimulate the economy and pay off its debts during good economic times is not being adhered to, she said.
“Now we have unemployment below 4 percent. We have an economy that’s growing above 3 percent. Why are we still stimulating the economy?” she asked on Tuesday as lawmakers were bandying about a $2 trillion infrastructure package and talking about raising discretionary spending caps. “We’re talking about a potentially $400 billion dollar spending package with this caps deal that’s currently being negotiated; the economy doesn’t need it, and we certainly can’t afford it.”