Republican Budget Offers Deep Cuts To End Deficits In 2024

03/17/2015 09:41 am ET | Updated Mar 18, 2015

By David Lawder

WASHINGTON, March 17 (Reuters) - U.S. House Republicans on Tuesday unveiled a budget that seeks to eliminate deficits by 2024 through deep cuts to social safety net programs, domestic spending and another attempt at repealing "Obamacare" health reforms.

The plan from House Budget Committee Chairman Tom Price proposes $5.468 trillion in spending cuts and interest savings over 10 years compared to current tax and spending policies.

To gain support in a divided Republican caucus, Price's plan nominally adheres to "sequester" spending caps next year but seeks to boost U.S. military spending by adding nearly $40 billion to an off-budget war funding account.

Some 70 Republicans had signaled they would reject their party's budget if it failed to at least match Democratic President Barack Obama's $561 billion base military budget request. At $613 billion including war funding, it just tops Obama's full request with war operations.

In subsequent years, it increases defense spending while cutting domestic discretionary spending more deeply.

Even if that allows it to pass with only Republican votes, the "Balanced Budget for a Stronger America" plan will not become law. Annual budget resolutions are non-binding and serve only to start a longer spending debate in Washington. But they serve as policy manifestos to show voters what Republicans would do if they had total power.

"The $5.5 trillion in decreased spending and the end to annual deficits will mean we can begin to pay down the national debt and stave off a severe and completely avoidable fiscal crisis in the future," Price's document reads.

Like previous Republican budgets, Price's plan contains no tax increases. It assumes Congress will reform the tax code to reduce marginal rates and end many tax breaks, but leaves the details for later.

First on Republicans' cutting list is repealing the Affordable Care Act, Obama's signature health care law. That would reduce expenditures by about $2.04 trillion over 10 years, according to Price's plan.

He also would cut $913 billion in Medicaid spending by shifting it to a grant program to allow states to tailor the health care program for the poor. Price's plan would do the same for some other social safety net programs, including food stamps. Pell grants for college tuition would also shrink.

Price also recycles a controversial revamp of Medicare pioneered by his predecessor, Paul Ryan. It turns the fee-for-service health care program for seniors into a "premium-support" system of subsidies for private insurance, starting in 2024, affecting those born in 1959 or later. (Reporting by David Lawder; Editing by Kevin Drawbaugh and Susan Heavey)

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