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Taxpayers Tab


Taxpayers Tab Issue #14

April 9, 2014




 
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Welcome to the New & Improved Taxpayer’s Tab!

The Tab presents the latest research from the National Taxpayers Union Foundation’s (NTUF) BillTally project -- the most comprehensive study of Congressional spending proposals. Each week, NTUF experts bring you commentary and analysis of the bottom line costs of legislation in the House and Senate.

For more information, check out NTUF’s BillTally project and our partners, WashingtonWatch.com capitol_dome_tiny and TruthAboutBills.com. As always, we welcome your feedback and comments.

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Legislative Spotlight: The Many 2015 Budgets Available to Taxpayers

With Tax Day just six days away, Americans are not only considering how to change the revenue collection process, but also the ways in which government spends their hard-earned tax dollars. As it happens, some taxpayers are filing last-minute returns at the same time legislators are considering which federal programs to add to, change, or eliminate. As with tax reform, there are many ideas across the political spectrum about which policies would be the best use of taxpayers’ resources.

In this edition of The Taxpayer’s Tab, NTU Foundation looks at six proposals that would take the budget in different directions. We compare the top-line spending figures with current spending in FY 2014 to analyze the changes that fiscally-focused congressional caucuses and other entities such as the White House seek. Below are tables and descriptions of how much spending each budget proposes.

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Republican Budget Proposals


FY 2015 Republican Budget Proposals
(in billions of dollars)
 
Defense
$514
$521
$521
Other Discretionary
$524
$429
$492
Mandatory
$2,116
$2,1572
$2,2103
OCO1
$92
$85
$85
Total
$3,246
$3,192
$3,308
Change from FY2014
N/A
-$54
+$62
Notes:
Totals may not add due to rounding.
Figures are in budget authority, except where noted.
BillTally does not track changes in debt interest servicing and so they are not included in these figures.
1Overseas Contingency Operations (OCO) funding is not subject to budget caps.
2NTUF assumes that the Back to Basics budget reported mandatory spending in outlays. NTUF therefore must compare their outlay figures with the budget authority figures of the other entities. This may not reflect the caucus's budgetary intent.
3The Path to Prosperity budget reported mandatory spending in outlays. NTUF therefore must compare their outlay figures with the budget authority figures of the other entities. This may not reflect the caucus's budgetary intent.

Republican Study CommitteeRepublican Study Committee (RSC): Back to Basics would aim to balance the federal budget in four years by establishing lower spending caps than the ones already in effect due to the 2011 Budget Control Act and sequestration. Discretionary spending (both defense and non-defense programs) would be frozen at $950 billion next year and for every subsequent year that the budget is not balanced. Non-defense activities would be cut the most, whereas defense outlays would increase to $696 billion in FY 2024 (though FY 2015 defense spending would remain at this year’s levels). Relative to the FY 2014 baseline, entitlement programs and other mandatory spending would be cut by varying degrees in order to account for reforms, including institution of a premium-support system for Medicare in the hopes of keeping the program solvent for a longer period of time. Finally, in line with some of the reforms proposed by Congressman Dave Camp (R-MI), the RSC budget calls for a simplified Tax Code that would flatten rates and broaden the base. capitol_dome_tinytaxtabhaticonalpha.png

Republican Study CommitteeHouse Republicans: Spearheaded by House Budget Committee Chair Paul Ryan (R-WI), Path to Prosperity aims to reduce federal spending with the expectation of achieving a balanced budget by FY 2024. In a similar but slower fashion than the RSC budget, the “Ryan Budget” would impose lower caps on discretionary spending and increase expenditures for defense programs in future years, though again not for FY 2015. Over ten years, these caps would result in $287 billion more in net cuts than current levels required under sequestration. The budget also offers policies that would restructure entitlement programs in a similar way as the RSC budget, in effect prioritizing historical program reforms while correspondingly defunding President Obama’s Affordable Care Act. Regarding tax reform, the Ryan budget calls for more individual bracket consolidation and a reduction in the corporate rate, leading to a simpler code. capitol_dome_tinytaxtabhaticonalpha.png

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Democratic Budget Proposals


FY 2015 Democratic Budget Proposals
(in billions of dollars)
 
Defense
$514
$549
$521
Unknown
$574
Other Discretionary
$524
$516
$492
Unknown
$596
Mandatory
$2,116
$2,458
$2,728
Unknown
$2,763
OCO1
$92
$85
$85
$49
$29
Total
$3,246
$3,608
$3,826
$3,492
$3,962
Change from FY2014
N/A
+$362
+$580
+$246
+$716
Notes:
Totals may not add due to rounding.
Figures are in budget authority except for the Congressional Progressive Caucus (CPC) (see below).
BillTally does not track changes in debt interest servicing and so they are not included in these figures.
1Overseas Contingency Operations (OCO) funding is not subject to the budget caps.
2The Congressional Black Caucus (CBC) does not provide a breakdown of discretionary or mandatory spending. NTUF included CBC's OCO outlays to its FY 2015 budget authority total for a more complete spending total.
3CPC reported their budget proposal only in outlays. NTUF therefore must compare their outlay figure with the budget authority figures of the other entities. This may not reflect the caucus's budgetary intent.

President Obama's SealPresident Obama’s Budget Request: As NTUF reported in March shortly after its release, President Obama’s FY 2015 budget proposal would increase spending levels for defense discretionary and mandatory categories, while decreasing non-defense spending by $8 billion. The overall increase in spending is offset in part with higher taxes (such as the “Buffett Rule” imposed on high income earners) in addition to recently implemented surtaxes. The Administration has yet to release details regarding exactly how much the health care overhaul will ultimately cost taxpayers, especially in light of the continual delay of certain provisions in the law, technical and logistical problems in the rollout of online exchanges, and legal challenges to some of the law’s requirements. capitol_dome_tinytaxtabhaticonalpha.png

House DemocratsHouse Democrats: The Democratic Alternative Budget would increase net spending by $580 billion in FY 2015 through a plan that would repeal sequestration and expand entitlement spending. House Democrats would also dedicate renewed funds to infrastructure projects, education, and unemployment benefits. To pay for some of these measures, the alternative budget would levy new taxes but proposes that none would burden middle- or low-income Americans. The levels outlined in the President’s budget would be maintained; however, the President’s budget includes provisions that increase spending for certain discretionary categories beyond the Bipartisan Budget Act caps established for Fiscal Year 2015. The House Democrats’ budget does not. There is little in the way of substantial entitlement spending reform, though there is mention of preserving Medicare and Medicaid by avoiding sequester cuts. capitol_dome_tinytaxtabhaticonalpha.png

Congressional Black CaucusCongressional Black Caucus (CBC): CBC introduced its budget alternative with an emphasis on strengthening social welfare programs and economic stimulus designed to help low-income families. While their budget does not specify how much it allocates towards broad categories such as discretionary and mandatory spending, it does offer $3.4 trillion in budget authority for FY 2015 ($246 billion above the baseline) with a projected $3.3 trillion in outlays. Like the other alternatives featured, the CBC budget authorizes $85 billion in OCO funding for FY 2015; however, it proposes an end to that emergency funding beginning in FY 2016, with a projected $49 billion in related outlays for FY 2015. It also proposes $530 billion in budget authority for the National Defense function; $524 billion for Medicare; $122 billion for Education, Training, Employment & Social Services; and $30 billion for Community & Regional Development. capitol_dome_tinytaxtabhaticonalpha.png

Congressional Progressive CaucusCongressional Progressive Caucus (CPC): The Better Off Budget represents the largest spending increase measure among those described here. With the goal of creating 8.8 million new jobs by 2017, the CPC budget would spend $596 billion (or $75 billion more than FY 2014 levels) to expand non-defense discretionary activities. Priorities include more long-term unemployment benefits, larger public works and education programs, and state aid that would facilitate the hiring of more state and local government employees. The defense budget would be cut by repealing Overseas Contingency Operations authority and reducing the military’s force structure and personnel. Entitlement spending would increase to meet larger and new guaranteed obligations, partially paid for by phasing out the cap on wages subject to Social Security taxes. Higher income households would be subject to further taxes through creating five additional brackets, growing the estate tax, and imposing a financial transaction tax. capitol_dome_tinytaxtabhaticonalpha.png

The Bottom Line: While many of the above budgets make strides to reform the federal government, and by effect public spending, much of the focus remains on discretionary programs. However, the largest problem facing America's taxpayers is unsustainable entitlement programs. Republicans seek to make some systemic reforms and Democrats propose to make up shortfalls with new taxes. Taxpayers may be disappointed to find that many of these polities offered by lawmakers in these blueprints are unlikely to bridge the partisan divide as unfunded liabilities will make up more of the federal budget.

Note: NTUF would also analyze any proposals from the Congressional Blue Dog Caucus, Republican Main Street Partnership, or Tea Party Caucus, but these groups have not released one thus far in 2014.

Image Credits: PBS Newshour, Wiki Commons, HarvardPolitics.com. The appearance of any or all caucus logos or images does not consistue endorsement of this analysis.