Senate GOP’s FY 2017 Budget Deficit, Debt Red Ink Exceed Obama’s Budget

By Jonathan Nicholson

Republicans are calling the budget resolution on the Senate floor a “repeal resolution,” highlighting its expected role in eventually leading to a vote to repeal the Affordable Care Act.

But there may be another reason for the soft pedaling: The budget’s annual deficits and cumulative debt figures are worse than the White House budget they snubbed in 2016.

After a largely party-line 51-48 vote to start debate, the Senate began its consideration of the fiscal year 2017 plan Jan. 4. It is expected to finish sometime in the middle to latter part of the week of Jan. 9. Republicans touted the budget as the fastest way to ensure a vote on repealing the Affordable Care Act under a special procedure that would make the repeal bill immune to filibuster, while Democrats attacked it for the same reason.

But some Republicans, including Sen. Rand Paul (R-Ky.), were critical of the budget for allowing too much spending, deficits and debt. A group of three other Republican senators, Sen. Ted Cruz (R-Texas), Sen. Mike Lee (R-Utah) and Sen. Marco Rubio (R-Fla.), joined in a letter to the Senate Republican leadership saying their support for the resolution was only because it was needed to fast-track repeal of the health-care law.

“We seek your commitment to passing a fiscal year 2018 budget resolution that sets our new, unified Republican federal government on a path to balance in 10 years without the use of budgetary gimmicks or tax increases. Our votes in favor of the ‘Obamacare Repeal Resolution’ do not indicate in any way our support for the revenue, spending, and deficit numbers therein, nor for the use of those numbers as the basis for future federal budgets,” the trio wrote.

Republicans are expected to begin work on a second budget, this time for the upcoming 2018 fiscal year starting Oct. 1, sometime in the spring.

Deficit ‘Rhetoric.’

The annual deficits and accumulated debt seen in the fiscal 2017 budget resolution are all higher than in the 2017 budget President Barack Obama sent to Capitol Hill in February 2016. Republicans not only declared that budget dead on arrival—a not-unusual declaration for an opposing party to make—but also refused to have the administration’s budget director testify before the House and Senate Budget committees, which was widely seen as unprecedented since the modern budget process began in 1974.

In its most recent forecast issued in August 2016, the Obama administration projected a $441 billion deficit for the current 2017 budget year, assuming the president’s proposals were enacted into law. In the GOP budget, the 2017 deficit is projected to be $582.6 billion.

In 2026, the final year of both budgets, the Obama deficit was projected at $731 billion. In the Republican budget, it is projected at $1.009 trillion.

Those higher deficits mean higher debt. The public debt in the GOP budget resolution in 2026 is $29.126 trillion, compared to $26.705 trillion in the Obama budget.

“It’s interesting their budget is $2 trillion more in deficit than the Obama budget. So much for all the rhetoric about reducing the deficit,” said Sen. Chris Van Hollen (D-Md.), a former ranking Democrat on the House Budget Committee and a member of the Senate Budget Committee.

Focus on 2018 Budget.

John Cornyn (R-Texas), the Senate majority whip, had said in December that the budget plan was simply to make it easier to pass later legislation to repeal the Affordable Care Act. “It’ll be a budget framework, yes, but it’s not going to be a real budget. It’ll be solely for the purpose of getting reconciliation instructions,” he said Dec. 5.

A Senate Budget Committee aide reiterated that point Jan. 4, adding that the fiscal 2018 budget to be written later in the spring will be “the comprehensive plan to put our house in fiscal order.”

The aide noted the resolution requires the later ACA bill to provide at least $2 billion in deficit reduction over 10 years. “While those savings (and exactly how much is still up for debate based on the actual repeal legislation that follows the resolution) will be used for replace, we believe at the end of the day our fiscal situation will be in a better place long-term by repealing Obamacare,” the aide said.

That explanation was not enough for Paul, though, who said on the Senate floor that he would vote against the fiscal 2017 resolution. “If the numbers don’t mean anything, then put honest numbers in there or put conservative numbers in there,” he said.

The Republican budget does have less red ink than the nonpartisan Congressional Budget Office’s baseline, which assumes no laws are changed over the next 10 years. For 2017, the CBO in August projected a $594 billion, with a $1.243 trillion shortfall in 2026. However, gross federal debt was projected at a slightly lower $28.207 trillion in 2026 compared to the GOP budget plan.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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