House Democrats announced their alternative to the Republican budget Monday, calling for Congress to lift statutory spending caps and avoid the deep spending cuts envisioned by Republicans.
The plan would spend $3.9 trillion in fiscal 2016 and increase federal spending on infrastructure, higher education and other priorities Democrats described as investments in the middle class. It also would feature tax credits targeted toward middle earners.
Unlike the GOP plan, the Democratic alternative would not balance in the first 10 years, accruing $6 trillion in deficits rather than the $1.3 trillion in the GOP budget.
Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee, said on a call with reporters that “the No. 1 priority is accelerating economic growth in a way that produces shared prosperity.”
Nevertheless, he defended the plan on fiscal terms, noting that it would see the federal debt held by the public decline from 74 percent of U.S. economic output to 70 percent, with deficits declining relative to the economy.
“The Republican claim that their budget balances is purely smoke and mirrors,” Van Hollen said, faulting Republicans for what Democrats have called accounting gimmicks in their budget.
Although it differs in some details, the House Democratic plan is similar in its “overall architecture” to President Obama’s budget, Van Hollen noted.
It would steer away from the GOP plans to repeal Obamacare, overhaul Medicare with a plan to subsidize purchases of private insurance, and cut funding for Medicaid.
“The Republicans don’t lay out any coherent alternative” to Obamacare, said Rep. Debbie Dingell, D-Mich.
The centerpiece of the Democrats’ plan would be a tax reform to boost tax credits for middle-class earners. Those include saving the expansions of the Earned Income Tax Credit for low earners and the Child Tax Credit that are set to expire in 2017.
The tax plan also would include new tax credits for child care and two-earner families, as well as a provision backed by Van Hollen that would eliminate tax deductions for executives’ bonuses at companies at which workers did not receive pay increases in line with their productivity and cost of living.
“We believe that the Republican budget proposal is the wrong direction for America but we also think that it’s important that we present an alternative,” Van Hollen said. “Our budget is a budget to reward Americans who are working hard every day to get ahead.”
The budget plan would call for a raft of other Democratic priorities, including an increase in the minimum wage, paid sick leave, boosting preschool funding, and new infrastructure spending.
Like the Obama budget, the House Democratic budget would raise the spending caps on fiscal year spending for both defense and non-defense spending, which the Republican budgets keep in place.
Defense spending, capped at $523 billion for 2016, would be raised to $561 billion. Non-defense discretionary spending, which encompasses funding for all domestic programs appropriated by Congress, would increase from $493 billion.
Republicans in both the House and Senate aim to boost Pentagon funding through war accounts not subject to the caps, which were set by the 2011 Budget Control Act that was hammered out in the showdown over the debt ceiling.
Defense hawks in the GOP have warned that the spending cap on defense programs would harm national security, and many have raised objections to circumventing the caps through the war spending account. Those concerns will be raised as the House and Senate debate their budgets this week.
