Both the House and Senate Budget Committees March 19 approved their respective versions of the fiscal year (FY) 2016 budget resolution after adopting different responses to requests to increase defense spending.
The House Budget Committee passed its budget plan by a 22-13 party-line vote after deferring to consider an amendment supported by the GOP leadership to increase war funding. House Speaker John Boehner (R-Ohio) suggested the amendment, which was crafted by Rep. Todd Rokita (R-Ind.) and would increase funding for the Overseas Contingency Operations (OCO) account by $2 billion and eliminate requirements for offsets, may be added when the Rules Committee considers the resolution.
Meanwhile, the Senate Budget Committee passed its budget on a 12-10 party line vote after adopting an amendment by Senator Lindsey Graham (R-S.C.) to add another $38 billion to the $51 billion proposed by Senate Budget Committee Chair Mike Enzi (R-Wyo.) for the OCO account.
The budget resolution, which is not signed by the president, is a non-binding articulation of congressional priorities. Actual changes to spending policy must be enacted through either the annual appropriations bills or other authorizing legislation.
The House Republican proposal, “A Balanced Budget for a Stronger America,” cuts federal spending by $5.5 trillion to balance the budget within a decade. Savings are achieved by repealing the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), which includes provisions such as the Independent Payment Advisory Board (IPAB) and Medicaid expansion, and fundamentally transforming the Medicare and Medicaid entitlement programs.
Similar to past House Republican budgets, the proposal repeals the ACA, reducing the deficit by $2 trillion over the next decade, and rather calls for “patient-centered health care reform.” Although details of the alternative reform remain vague, the budget suggests the new approach would “increase access to quality, affordable health care by expanding choices and flexibility for individuals, families, businesses and states while promoting innovation and responsiveness.”
The House budget also would move Medicare to a premium support model beginning in 2024, and estimates nearly $150 billion in savings. The program would allow beneficiaries to choose coverage options, including traditional Medicare. Payments from Medicare to private plans would be risk-adjusted with lower-income seniors receiving subsidies to cover out-of-pocket costs and upper-income seniors paying a greater share of their premiums.
Additional changes to Medicare provisions include combining Medicare Parts A and B from the current fee-for-service benefit into a single deductible for seniors, including a catastrophic cap on annual out-of-pocket expenses to “safeguard” sicker beneficiaries. The proposal also calls for medical liability reform, but does not elaborate on an alternative.
The House budget would achieve $913 billion in Medicaid savings by providing states with block grants and the ability to “tailor” their programs through the creation of “State Flexibility Funds.” Additionally, the budget proposes unifying Medicaid and the State Children’s Health Insurance Program (SCHIP), and includes a reserve fund to extend federal spending on SCHIP.
The House budget also directs the Ways and Means; Energy and Commerce; and Education and Workforce committees to achieve $1 billion in savings each.
The House budget includes a “deficit-neutral reserve fund for graduate medical education (GME)” that gives the House Budget Committee Chair authority to “revise the allocations, aggregates, and other budgetary levels” in the resolution for GME reform that “expands access to, and improves, as determined by such chair, graduate medical education programs, but only if such measures would not increase the deficit over the period of FYs 2016-2025.”
The House budget would eliminate the Department of Education’s Public Service Loan Forgiveness (PSLF) program and roll back Income-Based Repayment, cutting $26.8 billion in benefits to student borrowers.
Similarly, the Senate GOP budget resolution aims at achieving a balanced budget within the next decade. The Senate budget reduces the nation’s deficit by $4.3 trillion, repeals the ACA, and includes entitlement reform proposals for Medicare and Medicaid.
Both the House and Senate resolutions adhere to the Budget Control Act mandated discretionary (appropriated) spending caps for FY 2016. President Obama proposed increasing the spending caps by $70 billion in FY 2016, split evenly between defense and non-defense discretionary (NDD) spending.
Both the House and Senate budget plans propose to lower NDD spending in FYs 2017-2024, although these limits would not be legally binding unless Congress amends the statutory budget caps.
The House budget resolution also includes a “Policy Statement on Medical Discovery, Delivery, and Innovation,” which states in part, “It is the policy of this resolution to support the important work of medical innovators through-out the country, including private-sector innovators, medical centers and the National Institutes of Health…. [T]he budget calls for continued strong funding for the agencies that engage in valuable research and development, while also urging Washington to get out of the way of researchers, discoverers and innovators all over the country.”
The Senate plan includes a “deficit-neutral reserve fund” that would permit the Senate Budget Committee Chair to revise funding levels within the budget resolution to accommodate legislative proposals relating to:
- the requirement to individually purchase, or jointly provide, health insurance;
- increasing payments under, or permanently reforming or replacing, Medicare payments for providers;
- extending expiring health care provisions;
- the health care needs of first responders to domestic acts of terror; or
- improvements in medical research, innovation and safety.