Mr. President, at its heart, a budget is a statement of values and last week I joined with my colleagues on the Budget Committee to pass a budget resolution firmly rooted in our values. And thanks to the leadership of Chairman Patty Murray, the budget we passed reduces our deficit and stabilizes our debt in a balanced, responsible way, relying on an equal mix of spending cuts and cuts to spending through the tax code, a balance of cuts and increased revenue through tax reform.
This first chart briefly shows that we’ve already made significant progress towards the Bowles-Simpson goal of $4 trillion in reduced federal spending over the next ten years, and our budget relies on these two next pieces, reducing loopholes, tax expenditures, and spending cuts. This is the balance that I believe the American people called for in the last election. Our budget promotes economic growth and job creation in the short term, makes critical investments in our competitiveness for the long term, and does all this while putting a circle of protection around the most vulnerable in our society, children, low-income seniors, and the disabled.
Unfortunately, in my view, the budget resolution passed by the House Budget Committee led by Chairman Ryan does not reflect these same values or this same balance. It is wildly unbalanced, relying only on spending cuts in order to achieve claims of enormous savings. Yet when you look closer, and we’ll turn to this more detail later in this colloquy, the Ryan budget actually relies on a whole series of deceptive gimmicks, impossible arithmetic and unrealistic assumptions. The only way to make the Ryan budget add up is to increase our deficit or raise taxes on the middle class by as much as $3,000 a year.
So in my view, the House Republican budget either fails the test of deficit reduction or fails the test of basic fairness. It also, I believe, fails the test of economic growth and would put us on a fast track to austerity. Let me turn now, if I might, to my friend and colleague from the state of Maryland to ask for his further comments on the contrast between the budget we’ve adopted in the Senate and the budget offered over in the House.
I think this is a great week for the United States Congress. We are at last in stark contrast, presenting to the people of the United States a budget path forward adopted by the Republican-led House and a budget path forward adopted by the Democratic-led Budget Committee, and hopefully not just debated but adopted in this chamber this week.
Let me briefly summarize the main points made by my colleagues. First, as the senator from California emphasized, one of the core elements of the Ryan budget plan that gives us real pause and concern is that it doesn’t keep our promises to our seniors, to our veterans, to our most vulnerable populations. It block grants Medicaid. It repeals the health care law’s expansion of Medicaid. It repeals the health care law’s exchange subsidies. And more importantly than anything else, it turns Medicare into a voucher program. These are fundamental changes.
When Chairman Murray began our deliberations as a Budget Committee she laid out three core values that she wanted us to keep in mind. That our budget resolution should first help grow the economy and help the private sector create jobs. And, I believe, it does that by prioritizing critical investments, in infrastructure, in education and in R&D. Second to keep our promises to our seniors, to our veterans, to those in our country to whom we’ve made commitments over decades. Something I would add that we also continue to respect and embrace a circle of protection for the most vulnerable in our society. And last, that we make credible progress towards reducing our deficit and debt, but in a sustainable way that allows us to continue to grow our economy from the middle out.
Let me turn, if I might, for a few minutes to some criticisms or challenges that many of us on the Democratic side here in the Senate have of the Ryan Republican budget.
Briefly, it relies on outlandishly rosy assumptions about revenue and spending levels. It counts $716 billion in Medicare savings from the very healthcare reform law that it says is repealed, and that tension within the Ryan budget, I think, is unresolvable. Third, $810 billion in Medicaid savings are really just costs shifted on to state governments and as we know, states all across this country are struggling to balance their budgets today. These costs are not trimmed; they are simply shifted from the federal government on to the states. Fourth, Ryan relies on $800 billion in undefined savings in mandatory programs, significant cuts that would have dramatic and negative impacts on our country and our economy. There’s $800 billion in cuts that he doesn’t specify out of his total $962 billion in overall savings to so-called other mandatory spending. And last, Ryan claims his tax cuts for the wealthy, which cost more than $4.5 trillion, wouldn’t add to the deficit.
To give some visual sense of the likely impact, it’s anything but balanced. While Ryan claims that his budget plan would balance the budget, and I challenge that assumption given all these mathematical and programmatic challenges, it’s doing it in a way that is fundamentally unbalanced and doesn’t respect our core values. To double down on tax breaks for the wealthiest Americans, to give an additional tax break of more than a quarter million dollars a year to the very wealthiest Americans, while shifting that tax burden on to the middle class, just doesn’t make sense. Doesn’t meet the test of fairness and doesn’t meet the test of sustaining economic growth in a balanced way.
Last year the independent Tax Policy Center analyzed the Ryan rate reduction, the proposal to reduce rates on the wealthiest Americans to 25%, and estimated that, unless those costs were offset with corresponding tax hikes, it would add $4.5 trillion to our deficit. So which one is it, Mr. Ryan? Does your plan shift tax burden to middle-class Americans, as was described in some detail by my colleagues? Or does it actually add to the deficit and fail the test of balance?
Let me move then to the question of revenue and how our budget package achieves some contributions to balance going forward. One of the things that I think is important for folks watching the difference between these two plans to grasp is that both plans make significant changes to what my colleague from Maryland talked about as spending through the tax code.
We spend almost as much as we receive in revenue through a tax code that – in the many years since 1986 – has become riddled with loopholes, exemptions, and special treatments, particularly for the wealthiest and best connected. And both plans, the Ryan plan in the House and the Democratic plan in the Senate, both close tax loopholes. Out of an estimated $14 trillion in these tax expenditures over the next decade, the Ryan plan actually cuts $5.7 trillion. The Democratic plan – that we are moving forward today – only cuts 7% of these tax expenditures.
That’s how I think we can credibly say that it won’t cut into those tax expenditures relied on by the middle class, things like the home mortgage deduction, the deduction for employer-provided healthcare, the deductions for charitable contributions. This 7% reduction in tax expenditures is much more modest than the significant amount of revenue raised in the Republican plan. The most important contrast, though, is to what end. What do we do with these two significant differences in revenue raised through closing tax loopholes?
As I’ve said a few minutes ago, the Ryan plan would dedicate it almost exclusively to reducing tax rates for corporations and the wealthiest Americans. Well, in our balanced plan, this is half of the total contributions we make towards deficit reduction.
Let me move towards a close, if I might, with a few comments.
There are reasons to say that the House Republican plan makes cuts that will grind our economy to a halt; makes cuts that are unduly focused on just those areas that we think deserve investment, research and development, infrastructure, education, public health. In my view, it wipes out the chance for us to continue to expand high-tech manufacturing, to ensure we have a more competitive economy, to cure life-threatening diseases and to bring America’s economy fully back to health. It relies on budget gimmicks and on faulty assumptions and, in my view, the plan we move forward today is a more balanced and responsible path forward to keeping our promises to seniors and veterans, to protecting the most vulnerable in our society, to dealing with our deficit and debt, and to moving this country forward.
Mr. President, the future that our budget plan would move us towards is the kind I envision for my kids, for my state, and for our country, one where we can grow our economy but continue to respect our most basic values. And even though the Ryan plan in my view fails a basic test of values, it also fails a basic test of balance.
We have a budget that this body will take up and consider today and I hope we will pass. As it passed out of Committee with the strong leadership of Chairman Murray, I am confident it will pass out of this chamber today and from that passage it is my hope the people of the United States can see us begin to work together on a balanced, bipartisan plan that will responsibly deal with our deficit and debt, grow our economy, but continue to respect our most fundamental values.
With that, Mr. President, I yield the floor.
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