frequently asked questions (FAQs)
Q: What reconciliation instructions does this budget include?
The Ways and Means Committee is being reconciled for deficit-neutral tax reform. Additionally, there are 11 authorizing committees being reconciled for at least $203 billion in mandatory savings and reforms.
Q: How can there be reconciliation instructions for both tax reform and mandatory savings?
While the final reconciliation package will be one bill, tax reform and mandatory savings will be different exercises. Tax reform will be deficit neutral on its own. Mandatory reforms will produce at least $203 billion in savings for deficit reduction, not to pay for tax reform or any other spending priorities.
Q: How does this budget address tax reform?
This budget calls for pro-growth tax reform that achieves the following: Lowers tax rates for individuals and companies; makes the tax code simpler and fairer so families spend less time and money complying with tax laws; and transitions the tax code from a “worldwide” system to a “territorial” system. The budget also includes reconciliation language that allows the Ways and Means Committee to build tax reform legislation to realize this vision.
Q: Does this budget double count the macroeconomic effect of tax reform to state that any proposed reform would both reduce the deficit and, at the same time, keep that reform deficit neutral?
There is no double counting in the House budget. The budget assumes that 2.6 percent average annual economic growth is achieved from tax reform, welfare reform, spending restraint, the administration’s regulatory reforms, and Obamacare repeal and replace legislation. Applying CBO’s economic rules of thumb, 2.6 percent average growth yields a macroeconomic effect on the budget of $1.8 trillion. The budget assumes that $1.5 trillion of this total reduces the deficit. Not taking this $300 billion into account in the deficit calculation is based on House Budget Committee staff's review of several estimates by non-governmental and governmental entities of the growth potential for various tax reform proposals.
Q: Does this budget incorporate the House-passed American Health Care Act?
Yes, the budget assumes the House-passed American Health Care Act (AHCA) including the use of tax credits, repeal of tax increases, and Medicaid reforms. The additional health care options proposed by this budget resolution are possible reforms to further the good work done by AHCA. These reforms would continue on the path of restoring the American health care system to a patient-centered model.
Q: How does this budget address Medicare?
Under the premium support system our budget envisions, Medicare beneficiaries would pick from a list of federally certified plans to best suit their needs. The government would make a payment directly to the insurers to cover the cost of that plan. Coverage would be guaranteed, and traditional Medicare would always be available for those in the program and for future generations. It would operate in a manner similar to Medicare Advantage and Medicare Part D – both popular with today’s seniors – and employer-sponsored-insurance, which most people are familiar with.
Q: How does this budget address Medicaid?
In addition to the Medicaid reforms from the American Health Care Act, the budget proposes a mandatory work requirement for able-bodied, non-elderly, non-pregnant adults without dependents who are enrolled in Medicaid, while exempting those who cannot work. It also proposes to restore parity to Medicaid by ensuring that those above the poverty line are not awarded more federal assistance than those below it. The Medicaid proposals in the budget put America’s most vulnerable first.
Q: What changes does this budget make to the Social Security Disability Insurance program?
This budget strengthens the Disability Insurance program by putting an end to the “double- dipping” loophole that currently allows individuals to receive both unemployment insurance and disability insurance simultaneously.
Q: How does this budget address the needs of our veterans and the failures at the VA?
Congress has performed its duty to provide adequate resources to the Department of Veterans Affairs (VA) and conduct important oversight of the department. The VA needs to adopt a new way of thinking to address its most challenging problems, such as ensuring access to health care, quality and delivery of programs, and cost management. This budget supports the continued oversight efforts of the House Committee on Veterans’ Affairs to ensure the VA is accountable and transparent in their work and that our veterans receive effective and efficient health care services and benefits.
Q: Does this budget reduce spending for veterans?
Veterans are a top priority in this budget. Our budget provides a 6 percent increase in budget authority for veterans’ benefits and services relative to fiscal year 2017 enacted levels. This is in addition to the 27 percent increase in discretionary funding for the Department of Veterans Affairs that has occurred over the past six years. However, given the continued failures of the VA to effectively and efficiently deliver health care services and benefits to America’s veterans, it is clear that the VA has a management problem, not a money problem. Consequently, this budget calls for meaningful reforms at the VA to improve the delivery of health care services and benefits to our nation’s veterans, including employee reform, addressing the Government Accountability Office’s ‘high-risk’ status, reducing improper payments, and more accountability overall.
Q: How does this budget address border security and building a wall?
This budget fully funds the Department of Homeland Security and the agencies (Customs and Border Protection and Immigration and Customs Enforcement) responsible for keeping our country safe from those who enter illegally. By allowing CBP and ICE to continue to recruit, train, and deploy agents necessary to increase our nation’s operational security, this budget makes domestic national security paramount. Border wall funding is also included in this budget through various Department of Homeland Security construction accounts to not only construct new fencing and replace ineffective fencing and barriers, but also to establish forward operating bases and surveillance technology along our southern border.
Q: Is the claim of $700 billion in savings from reducing improper payments realistic?
Yes. Government-wide improper payments totaled over $140 billion in 2016 and over the next 10 years will likely total more than $1.4 trillion. This budget supports the establishment of a special commission that would be charged with finding ways to tangibly reduce improper payments by 50 percent within the next five years. This timeframe recognizes that this problem is complex, and there is not a silver-bullet solution that could be implemented overnight. This commission should methodically solicit input from experts within government, such as GAO, and the private sector to determine the best ways to tackle this problem. In a House Budget Committee hearing with OMB Director Mulvaney earlier this year, he addressed the issue of improper payments and said that a goal of reducing improper payments by 40 to 50 percent is the right target and should be attainable.
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