(10 am. – promoted by ek hornbeck)
When the Senate notoriously voted down both the President’s budget (unanimously) and the House-passed Ryan plan in May, it also rejected a proposal by freshman Sen. Pat Toomey (R-PA) by a tally of 42-55. With Toomey recently named to the so-called “Super Congress”, we chose to examine his proposal in this week’s episode.
This proposal represented the Tea Party-aligned right flank of the Senate Republican Conference, a group ostensibly led by Sen. Jim DeMint (R-SC), and it aimed to improve upon perceived structural flaws in the plan of ideological ally Paul Ryan. As a result, while this budget leaves Medicare and Social Security largely intact, it contains many close similarities to the Ryan budget. Most notably, its claims of debt reduction rely heavily on draconian budget cuts (without accounting for economic fallout) and tax cuts that spur very optimistic economic growth projections over the next decade. In other words, this budget reflects the supply-side fundamentalism of Toomey and his brethren. It will be interesting to see whether Toomey will push for tax cuts on the Super Committee in order to actually raise revenue.
Also notable in the Toomey budget is its repeal of the coverage increases in the Affordable Care Act while leaving the Medicare cuts, cuts candidate Toomey actively campaigned against, in place.
Without further ado, here’s episode 20: the Toomey Budget.
90 Second Summaries: Season 2, Episode 20
S. Con. Res. 21: The Toomey Budget
Sponsor: Sen. Pat Toomey (R-PA)
Click here to download this summary (pdf)
Cosponsors: 8 (0 Democrats, 8 Republicans). Full list at http://thomas.loc.gov/cgi-bin/bdquery/z?d112:SC00021:@@@P
Status: Motion to proceed to debate rejected on 5/25/11 by a 42-55 margin. Three Republicans (Brown, Snowe, Collins) voted no.
House Companion: No direct counterpart, but this proposal has been compared to the Ryan budget (H.Con. Res. 34), which passed the House 235-193 but was rejected by the Senate 40-57, and the Republican Study Committee budget (H. Con. Res. 37), which failed a floor vote 119-136 with all but 16 Democrats voting “present”.
Purpose: The House-passed “Ryan” budget resolution is widely considered the standard-bearer of Republican budget plans, delivering long-term debt reduction through a cuts-only approach. However, the plan does not achieve sufficient short-term budget reductions in the eyes of fiscal archconservatives. In response, a group of Tea Party-aligned senators led by Pennsylvania freshman Pat Toomey have advanced a proposal that accomplishes a balanced budget within a decade; it goes further than the Ryan plan in many of its key aspects while leaving Medicare and Social Security largely intact.
Summary: S. Con. Res. 21 lowers overall federal spending to 18.4% of GDP in the following ways:
• Cuts non-defense discretionary spending by $1.5 trillion over 10 years, including some 30 percent from current levels in FY2021. These cuts are very similar to those in the Ryan budget.
• Cuts defense spending at a similar level to the President’s FY2012 budget proposal by adopting the cuts proposed by Fmr. Secretary Gates and fully ending the wars in Iraq and Afghanistan by 2018.
• Repeals the spending coverage increases in the Affordable Care Act, saving $1.4 trillion over ten years, but leaves the Medicare cuts from that legislation in place.
• Shifts Medicaid to a block grant to states and cuts funding to half of pre-health reform levels. This would cut $1.1 trillion over ten years, some 42% deeper than the Ryan plan.
• Cuts nearly $900 billion from social safety net programs like food stamps and unemployment insurance, more than twice the amount of cuts contained in the Ryan proposal.
• Includes $400 billion in cuts to various other areas of mandatory spending, but does not provide specifics.
The proposal also sets revenues at 18.5% of GDP by FY2021 through tax reforms that lower personal and corporate income tax rates, close some loopholes, and cease taxing corporate profits earned abroad. Its claims of revenue neutrality rely on baseline assumptions that the Bush tax cuts are made permanent and that tax cuts have a dramatic stimulative effect to the economy.
Note: Although this proposal itself does not impact Medicare (beyond pre-health reform levels) or Social Security, Sen. Toomey has repeatedly praised the Medicare proposals in the Ryan budget and stressed the need for deep entitlement cuts.
CBO Score: None provided.
Supporters: Tea Party, most Republicans
• Supporters believe the Toomey budget more effectively addresses the problem of short-term deficits than the Ryan plan, which they generally support in its own right.
Opponents: Democrats and aligned organizations, etc.
• Opponents decry the massive and draconian cuts to the social safety net and other core government functions contained in this proposal. They also believe the claims of a balanced budget require unrealistic assumptions about the economic impact of tax cuts.
Full bill text: http://www.govtrack.us/congress/billtext.xpd?bill=sc112-21
Official CRS summary: http://thomas.loc.gov/cgi-bin/bdquery/z?d112:SC00021:@@@D&summ2=m&
Sen. Toomey overview of plan: http://www.scribd.com/doc/55116239/Restoring-Balance-Final
CBPP critique of the proposal: http://www.cbpp.org/cms/index.cfm?fa=view&id=3504
Pittsburgh Post-Gazette article on the bill’s fate: http://www.post-gazette.com/pg/11145/1149202-100.stm