Republicans Admit To Guessing On The Budget

03/17/2015 02:49 pm ET

WASHINGTON -- The new Republican budget unveiled Tuesday not only dramatically cuts health care, anti-hunger programs and most other non-military spending -- it also takes a faith-based approach to generating revenue, House Budget Committee Chairman Tom Price (R-Ga.) acknowledged Tuesday.

The budget plan for 2016 says it achieves balance in 10 years entirely through making cuts, including repealing the Affordable Care Act, turning Medicaid into a block grant program run by states and chopping $759 billion from non-military spending programs, on top of cutting more than $1 trillion from nutrition assistance and other welfare programs.

But the blueprint is entirely silent on two key questions related to taxes, and at a press conference Tuesday, Price admitted that there are no actual estimates related to either.

The first question is how to replace the taxes that are currently slated to be raised through Obamacare -- taxes that are expected to lower deficits, according to the Congressional Budget Office. And the second question is how the GOP would pay for making permanent some $900 billion in tax cuts that are due to expire.

When asked how his budget deals with the lost revenue, Price did not point to any data, but insisted that the lower burden on taxpayers would spur more growth and therefore bring in more revenue.

"We believe in the American people and we believe in growth," Price said. "The amount of spending that's done here in Washington, we believe to be at a level that we can rein in. But just decreasing spending or reining in spending is not going to get us to the kind of economy that we want, or the kind of economy that will allow the American people to get back to work and realize their dreams."

Price said that his tax reforms would add a full percentage point to the gross domestic product every year, ultimately raising it from a projected 2.3 percent to 3.3 percent, which he noted was the historic average for the last 40 years.

"So as I mentioned before, we believe in the American people," Price said. "We believe in the vitality of their enthusiasm, and the vitality of an economy if you let it loose, if you let it go. And that's what we embrace in this budget."

When asked if he expected the revenue from new growth to "just magically" match the CBO's estimated cost of the tax cuts and the lost revenue from repealing Obamacare, Price said it would.

"We not only believe it that it will, we believe it will exceed it," Price said. "Now, it isn't accounted for in our budget in numerical values because we believe, as I mentioned, that if you increase growth from 2.3 percent to 3.3 percent, which is the average over the last 40 years, the increase in revenue to the federal government will be over $3 trillion over that period of time, more than covering the baseline that the CBO estimates."

Asked later if any tax reform in his budget was assumed to be "revenue neutral," Price reaffirmed his position that he didn't know what the new tax income would be -- but that it would be good enough.

"We don't account for any revenue in our budget because of the question [asked earlier]," Price said. "And that is, how can you plug a number in there when you don't know what it's exactly going to be? We, however, feel strongly and confidently that as has happened every time that the federal government has reduced taxes for the American people, it has increased revenue to the federal government."

Outside budget experts disagreed, however, noting that there is little to no historic correlation between tax changes and economic growth.

"It's absurd," said Chuck Marr, an analyst with the Center for Budget and Policy Priorities, which recently compared the job and GDP growth after the 1993 Clinton tax hikes and the 2001 Bush tax cuts, and found that the economy did better under former President Bill Clinton.

Marr's colleague, Joel Friedman, argued that even more important than the unsupported tax claims are the actual proposed cuts, which he suggested would harm the economy over the long term by shortchanging programs and tools that help families work out of poverty and get educations.

"It’s a blueprint that’s going to end up hurting millions of people, increasing the numbers of uninsured, making people have less access to food stamps and other types of benefits," said Friedman, estimating that health care programs would take a $3 trillion hit over the 10-year span.

And while defense spending would be increased over 10 years by $387 billion, the $759 billion in cuts to non-defense programs -- such as science agencies, the Education Department and many other services -- would drive that portion of the budget to unprecedented lows.

Under estimates from last year, such non-defense discretionary spending is projected to drop to just 2.7 percent of GDP by 2023, thanks to the harsh cuts from the 2011 Budget Control Act and sequestration. The new GOP budget would drive it even lower, while defense spending would rebound.

"It’s a roadmap to disinvestment," said Friedman, referring mockingly to the "Path to Prosperity" title that Price's Budget Committee predecessor, Rep. Paul Ryan (R-Wis.), gave one of his budgets.

"It’s basically the same budget that Congressman Ryan has been putting out for the last several years," Friedman said.

The Senate Budget Committee is expected to unveil its own budget Wednesday, with somewhat less severe cuts.

Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.

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