With seven different budget proposals floating around Capitol Hill, let’s take a look at what each one would do to federal spending in ten years if adopted without amendment:
President Obama
Spending: 22.2 percent of gross domestic product in 2025
Taxes: 19.7 percent of GDP in 2025
President Obama’s budget proposal would increase taxes relative to current projections, but not spending, which would fall by 0.4 percent of GDP. In nominal dollars, Obama’s budget would raise spending by $96 billion relative to current budget projections and his budget includes rosier economic projections as well. His budget would hike the capital gains tax and impose a fee on large banks. The budget also increased federal spending on a universal preschool program and other early childhood programs.
House Republicans
Spending: 18.3 percent of GDP in 2025
Taxes: 18.2 percent of GDP in 2025
With the help of some added macroeconomic effects (unlike the static scoring in the accompanying chart), the House GOP budget would achieve a surplus in 2024 and 2025. Many of the spending cuts in the budget come from Obamacare repeal, which includes repeal of its taxes and the individual mandate. Spending on national defense would rise.
Senate Republicans
Spending: 18.3 percent of GDP in 2025
Taxes: 18.3 percent of GDP in 2025
The Senate Republican budget balances in its 10th year. It increases defense funding every year. Obamacare is repealed, including the medical device tax. It also allows for increased energy development, which would boost economic growth.
House Democrats
Spending: 21.5 percent of GDP in 2025
Taxes: 18.9 percent of GDP in 2025
The House Democrats’ budget would raise taxes and cut spending relative to current projections. Nominal spending would rise but optimistic economic projections keep spending as a percent of GDP from rising. The budget would spend more on infrastructure and raise the minimum wage. It would extend some tax credits and deductions, such as the earned income tax credit, while eliminating others.
Republican Study Committee
Spending: 17.5 percent of GDP in 2025
Taxes: 18.3 percent of GDP in 2025
The Republican Study Committee budget would balance even faster than the House and Senate GOP budgets. In its sixth year, the budget would achieve surplus. By 2025, the surplus would be 0.8 percent of GDP, maintaining currently projected tax levels and cutting spending. The biggest savings in the budget come from reducing interest payments, while Obamacare repeal provides a large boost as well. It cuts spending by over $1 trillion compared to Obama’s budget.
Congressional Progressive Caucus
Spending: 23.1 percent of GDP in 2025
Taxes: 21.5 percent of GDP in 2025
The Congressional Progressive Caucus would raise tax levels to record highs by 2016. Despite incredibly high taxation, the budget fails to balance because of proposed spending levels higher than any other budget. The budget raises taxes on individual incomes over $200,000 a year ($250,000 for joint filers) and treats capital gains as typical income. It also targets the financial industry and others with further tax increases. The budget would also spend more on infrastructure, food stamps, federal workers, unemployment insurance, and other federal programs.
Congressional Black Caucus
Spending: 21.5 percent of GDP in 2025
Taxes: 19.2 percent of GDP in 2025
The Congressional Black Caucus budget would raise taxes and cut spending relative to current 2025 projections. It gives $5.6 trillion in tax hike options over ten years, but only calls for some form of $2.7 trillion of those options to be enacted. They include Obama’s proposed tax hikes, as well as a 5.4 percent surcharge on incomes over $1 million. It would also expand welfare programs, raise the minimum wage, and augment the federal role in education.
