How the GOP would cut $203B in mandatory spending

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The House GOP’s new budget resolution includes instructions for $203 billion in deficit reduction over a decade, a figure conservatives have said is too low and Republican moderates think should be dealt with outside the budget process.

To achieve those cuts, the Budget Committee tasks 11 other House panels with making savings from their areas of jurisdiction. The largest amount, $52 billion, is tasked to the Ways and Means Committee, which oversees tax policy and a large portion of Medicare. The lowest cuts, set at a the nominal amount of $1 billion (or about $100 million a year), went to the Armed Services and the Veterans Affairs committees.

Notably, no savings are targeted from the Transportation and Infrastructure Committee, which oversees the Highway Trust Fund.

{mosads}The Hill asked Marc Goldwein, senior vice president and head of policy at the nonpartisan Committee for a Responsible Federal Budget (CRFB), for some thoughts as to how the committees might achieve the cuts listed below, which come directly from the GOP budget proposal.

Here is the breakdown:

Agriculture: $10 billion

The main sources for reduction in Agriculture come from the Supplemental Nutrition Assistance Program, also known as food stamps, and farm subsidies. Former President Barack Obama had asked for nearly four times this level of savings from farm subsidies alone in his final budget request. But President Trump’s budget called for greater SNAP restrictions, which could account for more than $50 billion in savings.

“Ten billion dollars in ag savings are quite easy,” said Goldwein. “You can get that in the program integrity space or farms subsidies.”

Armed Services: $1 billion

Savings from Armed Services are likely to come from adjusting the military’s generous healthcare benefits. The amount could be reached by slight adjustments to premiums or co-pays.

“One billion dollars has become the recent number you use to let the committee use their discretion as much as possibility. It’s a very nominal target,” said Goldwein.

Education and the Workforce: $20 billion

The main area where savings could be found here are in student loans. The CRFB estimates that $20 billion could be easily achieved by consolidating or toughening loan terms and reducing subsidies.

Energy and Commerce: $20 billion

This committee is responsible for Medicaid, child health insurance and parts of Medicare.

Republican proposals to add Medicaid work requirements could account for much of the deficit reduction, as could potential reductions in the levels of the strategic petroleum reserve.

“Particularly if the ObamaCare repeal and replace doesn’t happen, they can take some of the bits from the bill and throw them in the package,” Goldwein said.

Financial Services: $14 billion

This committee is responsible for the Consumer Financial Protection Bureau (CFPB), the brainchild of Sen. Elizabeth Warren (D-Mass.) and a regular foe for Republicans. The CFPB, alongside changes to flood protection, would be ripe targets, as would any savings associated with passing the CHOICE Act to overturn Obama-era financial regulations.

Homeland Security: $3 billion

These savings would most likely come from increasing customs and/or aviation fees.

Judiciary: $45 billion

The GOP budget included policy statements calling for medical malpractice reform, which would seem to account for this level of savings. 

But Goldwein says that would be a surprising step to take in reconciliation.

“There was never any effort to put medical malpractice reform into the ACA repeal, so I got the impression that Senate parliamentarian would say that it’s not budget-germane,” he said, referring to the Affordable Care Act. That means it would not be allowed to move forward as part of the reconciliation process.

The CRFB also estimates that there could be $10 billion in savings from the Crime Victims Funds, a fund where confiscated monies are put but seldom spent.

Natural Resources: $5 billion

A major part of these savings could come from allowing drilling in the Arctic National Wildlife Refuge, though other savings could come from various payments to states and leasing agreements.

Oversight and Government Reform: $32 billion

The main source of savings in this committee would come from increasing federal employee contributions for pensions and retirement health benefits. The CRFB estimates that the entire amount could be saved simply by pegging the government securities fund to 3-month Treasury bonds.

Transportation and Infrastructure: $0

This committee could link Highway Trust Fund spending to dedicated revenues, but the budget didn’t ask for any savings.

Veterans Affairs: $1 billion

Simply rounding down cost of living adjustments for benefits would save triple the amount requested.

Ways and Means: $52 billion

This committee accounts for more than a quarter of the required mandatory savings in the GOP budget.

“That’s where you can get the most savings with the least harm to the people who rely on the programs,” Goldwein said. “If anything, I’d have them account for a bigger proportions for savings.”

But it seems likely that the GOP will pursue some controversial measures, such as requiring a Social Security number for families claiming benefits such as the child and earned income tax credits. That proposal alone, which the Trump administration endorsed, would save $42 billion. It could also reduce spending on various facets of Medicare, though Trump has stuck closely to his promise not to touch the program.

Read more from The Hill:

House GOP releases $1.1 trillion budget

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