House Passes FY 2013 Federal Budget

April 3, 2012

The House passed an FY 2013 federal budget, previously reported out of the House Budget Committee, by a margin of 228-191 (all Democrats and 10 Republicans voting no). This budget is commonly referred to as the “Ryan Budget” after House Budget Committee Chairman Paul Ryan (R-WI).

The budget would substantially reduce the federal deficit by reducing federal spending levels compared to FY 2012 in the years FY 2013-2015 and substantially reducing the growth rate in federal spending thereafter. Federal outlays would stand at $4.9 trillion in FY 2022 compared to $3.6 trillion in FY 2012. The deficit would be $797 billion in FY 2013, $496 billion in FY 2014 and $304 billion in FY 2015.

The plan would reduce out-year Medicare outlays by adopting a premium support program for workers currently under the age of 55. Under the plan, a Medicare Exchange would be established where seniors would purchase private health plans. The second- least expensive approved plan or fee‐for‐service Medicare, whichever is least expensive, would establish the benchmark that determines the premium support amount for the plan chosen by the senior. If a senior chose a costlier plan than the benchmark plan, he or she would be responsible for paying the difference between the premium subsidy and the monthly premium. Conversely, if that senior chose a plan that cost less than the benchmark, he or she would be given a rebate for the difference. Payments to plans would be risk-adjusted and geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit package provided by fee‐for-service Medicare. Fee‐for-service Medicare would remain an option.

The plan contains the outline of a tax reform plan developed by Ways and Means Committee Chairman David Camp (R-MI). It would:

• Consolidate the current six individual income tax brackets into just two brackets of 10 and 25 percent.

• Reduce the corporate rate to 25 percent.

• Repeal the Alternative Minimum Tax.

• Broaden the tax base to maintain revenue growth at a level consistent with current tax policy and at a share of the economy consistent with historical norms of 18 to 19 percent in the following decades.

• Shift to a “territorial” tax system.

It is not specified what “tax subsidies” would be repealed to pay for these initiatives.

The House defeated a budget resolution based on the President’s FY 2013 budget. All 414 members voting opposed it.

The House also defeated by a margin of 38 to 382 a budget based on the Report of the National Commission on Fiscal Responsibility and Reform (often called the Simpson-Bowles Commission after its two co-chairmen) which was introduced by Rep. Jim Cooper (d-TN) and Rep. Steven LaTourette (R-OH). 16 Republicans and 22 Democrats voted for this budget.

The House Democratic Alternative Budget offered by Rep. Chris Van Hollen (D-MD) was defeated by a vote of 163-262 (all Republicans and 22 Democrats voting no).

The conservative Republican Study Committee failed by a margin of 136-285.

To read the House Budget Committee’s summary of the House passed budget, click here.

http://budget.house.gov/prosperity/factsandsummary.htm

To read five pages of Tables summarizing the House budget, click here.

http://budget.house.gov/UploadedFiles/summary_tables.pdf

The 99 page House budget explanation is available here.

http://budget.house.gov/prosperity/fy2013.htm

To read the budget resolution as passed (H. Con. Res. 112), click here.

http://www.gpo.gov/fdsys/pkg/BILLS-112hconres112eh/pdf/BILLS-112hconres112eh.pdf

The roll call vote on the budget is available here.

http://clerk.house.gov/evs/2012/roll151.xml

The Simpson-Bowles Commission report is available here.