U.S. House budget plan would cut domestic spending

The federal budget proposal released by the House Budget Committee and passed on April 10 by a slim margin along party lines in the House differed significantly from the president’s spending proposal released a month earlier.

The House proposal for the next federal fiscal year, which begins on Oct. 1, would achieve balance over the next decade by cutting spending by $5.1 trillion, primarily in social programs. Education spending, for example, would be cut by $145 billion. At the end of 10 years, domestic spending adjusted for inflation would be 29 percent lower than it is now.

According to an analysis by the Center for American Progress, non-defense discretionary spending would likely decrease by more than 40 percent over the next decade under the budget plan. This category of spending includes many programs important to municipalities, including Community Development Block Grants, surface transportation funding, the Clean Water and Drinking Water State Revolving Loan Funds, the COPS Hiring Grant, and Title 1 and special education funding.

At the same time, the House proposal would cut taxes by creating only two brackets – 25 percent and 10 percent – and setting the corporate tax rate at 25 percent.

It would cut spending by repealing the Affordable Care Act and restructuring Medicaid.

The budget proposal released by President Barack Obama in March included increases in several spending categories important to local government, such as education and surface transportation.

While the Senate typically releases a budget proposal after the House, the chamber’s Budget Committee chair, Sen. Patty Murray, has indicated that the Senate will not release a proposal this year.

An agreement struck last year between Senate leaders and the House Budget Committee chair, Rep. Paul Ryan, caps discretionary spending for the upcoming fiscal year at $1.014 trillion.

Both the president’s and the House’s budget proposals are most significant in that they create a policy framework for debate. Neither proposal is expected to be enacted as written.