U.S. Congressman Paul Ryan Serving Wisconsin's 1st District

U.S. Congressman Paul Ryan Serving Wisconsin's 1st District

U.S. House of Representatives

Budget

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The economy’s uncertainty continues to be a drag on job creation in Southern Wisconsin and the state’s unemployment rate remains high at 5.4 percent.  The fiscal situation in Washington has not been helpful to our nation’s economy.  Some in Washington are calling for tax increases, but the last thing our local communities need right now is a tax increase.  It will make it tougher for hard-working families to make ends meet and stand in the way of allowing Wisconsin small businesses to maintain or create new jobs.  Rather than increase taxes, Washington needs to stop spending money it doesn’t have and stop taking out more loans to pay for that spending.  Both side of the aisle need to work together to get spending under control and prevent tax increases.

Bipartisan Budget Act of 2013

The federal government, like any other business or household, must each year have a budget. In the absence of a year-long budget, the House and Senate must approve short-term spending bills known as "continuing resolutions" to keep the federal government operational. 

On October 15, 2013, Senator Patty Murray and I stood up in our respective chambers to offer a motion to create a bicameral conference committee to negotiate a federal budget by December 13, 2013.  Rather than continuing the trend of budgeting by brinkmanship with short-term spending bills, Senator Murray and I recognized the need for long-term bipartisan solutions to our nation’s most pressing fiscal problems.  On October 16, 2013, the motion to go to conference was adopted by unanimous consent in the House and Senate.

When entering the negotiations, there were three criteria I used to evaluate all provisions of the deal.  First and foremost, the deal must not raise taxes.  The last thing already financially-strapped individuals and families need is another tax increase.  Second, the deal must not increase the deficit.  At a time when our national debt is greater than $17 trillion, Congress should not appropriate one dollar without vigorous and diligent oversight.  Third, the deal must stop Washington from lurching crisis to crisis.  Our economy needs stability that will build confidence, and that confidence will help spur job creation.

After nearly two months of deliberations among the members of the bicameral conference committee, Senator Patty Murray and I introduced the Bipartisan Budget Act of 2013 on December 10, 2013.  This is the first time since 1986 that a divided Congress has produced a bipartisan budget resolution.  The Bipartisan Budget Act will provide $63 billion in sequester relief—split evenly between defense programs and other domestic priorities—in exchange for over $80 billion in savings elsewhere in the budget, resulting in over $20 billion in deficit reduction, all without raising taxes.  Additionally, it preserves 92 percent of the Budget Control Act’s (BCA) sequester cuts, or approximately $770 billion of the original BCA sequester savings, but does so by cutting spending in a smarter way.  It eliminates waste by ending the distribution of government checks to criminals and the deceased, puts an end to favoritism by cutting corporate welfare, and it makes real reforms to some of the true problems of autopilot spending.  And, it will also prevent another government shutdown this year.

The Bipartisan Budget Act came before the House for a vote on December 12, 2013, and was passed by a vote of 332 to 94.  I was encouraged that my colleagues from both parties voted in favor of this budget agreement instead of continuing down the same unsustainable path and risking another federal government shutdown.

Once Congress approves a budget resolution, then the congressional appropriations process can advance.  The budget resolution sets the overall spending and revenue levels, while appropriations legislation—typically divided up into twelve individual bills—dictates how much funding will be spent on the various programs spread across the federal government.  Members of the House and Senate Appropriations Committees are responsible for developing these appropriations bills for each fiscal year.  Members of the House and Senate Appropriations Committees had until January 18, 2014 to develop appropriations legislation for the remainder of the current fiscal year.  Because of this shortened time frame, House and Senate appropriators opted to use an omnibus spending bill—a bill that funds many departments of the government at once-- rather than twelve individual bills.

With the Bipartisan Budget Agreement signed into law, members of the House and Senate Appropriations Committees introduced the Fiscal Year 2014 Omnibus Appropriations Bill on January 14, 2014.  This legislation would combine the twelve individual spending bills that typically fund programs within the federal government at the level consistent with the Bipartisan Budget Act.  It would also ensure that medically retired armed forces personnel and survivor benefit plan recipients receive their full pensions.  Additionally, it provides no new or additional funding for the Affordable Care Act—commonly referred to as Obamacare.  It was passed in the House on January 15, 2014—with my support—by a vote of 359 to 67.  On January 16, 2014, it was passed by the Senate, and on January 17, 2014, President Obama signed the Omnibus Appropriations Bill into law.

While I will continue to support legislation that reforms the tax code and helps pay off the debt, the fact is that we have a divided government.  And in a divided government, no one will get precisely what they want.  Although the Bipartisan Budget Act and the Omnibus Appropriations Bill are not without flaws, both represent a firm step in the right direction.  Most importantly, these laws show how Washington can live within its means and make divided government work.

President’s Budget for Fiscal Year 2015

On March 4, 2014, one month after the statutory deadline, the President submitted to Congress his budget request for fiscal year 2015.   At a time when we need to control government spending, unfortunately, the President’s budget for fiscal year 2015 would increase spending, increase taxes and weaken economic growth.  Specifically, below are key facts on the President’s budget proposal:

  • The President’s budget increases spending by $1.1 trillion.  Conversely, the House-passed budget cuts spending by $5.1 trillion.
  • The President’s budget never balances.  It would add $8.3 trillion to the debt over the budget window and the cumulative deficits would amount to $5 trillion.  The gross debt would climb to $25 trillion in 2024.
  • The President’s budget increases taxes by $1.4 trillion whereas the House-passed budget calls for revenue-neutral tax reform.

I am disappointed with the President’s budget.  We have to fix our spending problem before it is too late.  Instead of building on the bipartisan progress Congress made earlier this year, the President’s budget undoes the bipartisan agreement.  The President’s budget does nothing to preserve or strengthen our entitlements.  In divided government, we need leadership and collaboration but, the President’s budget is a missed opportunity to provide what our country needs.

Hardworking families, who are struggling to make ends meet and pay their taxes, deserve alternatives and detailed solutions from their elected representative.  I look forward to working with my colleagues in Congress to put forward detailed alternatives so we can build upon the bipartisan budget agreement and address the fiscal challenges facing our country. 

The Path to Prosperity: Fiscal Year 2015 Budget Resolution

There are countless challenges facing our nation. It is nearly five years after the financial crisis, and many families have still not recovered. Economic growth is too slow, too many families are stuck in foreclosure, students continue to struggle with meeting their tuition payments, and millions are seeing their medical care costs skyrocket as a result of President Obama's health care law. Unfortunately, President Obama and his party have turned to more taxes, more spending, and more regulation. And, as we have seen, maintaining the status quo has not improved the economy.

Fortunately, it is not too late for us to reverse course. For four consecutive years, I have introduced and passed budget resolutions that would tackle the looming debt crisis and restore economic growth. The budget that my House colleagues and I recently introduced for Fiscal Year 2015, "The Path to Prosperity: a Responsible, Balanced Budget" offers an alternative that will provide for the nation's needs, allow families and job creators to rebuild the economy, and finally balance the budget.

The Path to Prosperity will reduce our deficits by $5.1 trillion over ten years. On the current path from fiscal year 2015 to fiscal year 2024, spending will grow, on average, by 5.2 percent per year. Under this budget, spending will grow, on average, by 3.5 percent per year—which is hardly draconian despite what critics often claim. Among other things, this budget will cut wasteful government spending, fix our broken tax code, protect and strengthen important priorities like Medicare and national security, and reform welfare programs like Medicaid to ensure that they are available to those in need. By balancing the budget and tackling our debt, the Path to Prosperity will grow our economy today and ensure our children and grandchildren inherit a stronger, more prosperous America.

Specifically, The Path to Prosperity would accomplish the following:

Health and Retirement Security Secured

This budget protects and strengthens Medicare for current and future generations. Medicare and Social Security are in dire need of reform. Both programs are weighed down by tens of trillions of dollars of unfunded liabilities as the federal government makes promises to current workers about their health and retirement security it has no means to keep. In 2026, the account that funds Medicare's hospital benefits will go bankrupt. Without changes to the status quo, these empty promises will soon become broken promises.

Fortunately, my budget will protect and strengthen Medicare. For those in or near retirement, there will be no changes. Beginning in 2024, additional plans—including traditional fee-for-service Medicare—will be provided in a reformed system. No one over the age of 56 today would be affected by these reforms as they will continue to receive benefits under the traditional Medicare program. For those 54 and younger, Medicare would provide a premium support payment either to pay for or to offset the premium of the plan chosen by the senior. This would provide seniors with the ability to select a plan that best suits their needs. Additionally, it would force providers to compete against each other to ensure seniors get higher-quality coverage at a more affordable price. In 2013, the CBO analyzed a premium-support reform in which providers competed against one another to better serve seniors. The result was lower costs for seniors and Medicare was put on a stronger financial footing, and The Path to Prosperity builds upon CBO's analysis. By making these reforms now, this budget would ensure those in or near retirement are able to receive the benefits around which they organized their lives, and future generations are able to make adjustments to ensure their retirement security.

Furthermore, extra assistance would be provided to low income seniors and those with greater health care needs. These reforms would ensure that Medicare is able to protect and serve those who are most vulnerable. Insurers would not be able to deny coverage based upon pre-existing conditions or impose prohibitively high costs on patients with chronic health problems. This budget would apply means-testing thresholds like those in place for Medicare Parts B and D to the new Medicare program so high-income seniors would pay for a higher share of their premiums.

This budget also calls for the President and Congress to work together to address looming shortfalls in the Social Security system. It requires that the President and Congress put forth specific ideas and legislation to ensure the solvency of this critical program; however, there is nothing in this budget that reduces Social Security benefits. The risks to Social Security are driven by demographic changes, roughly 10,000 "Baby Boomers" turning 65 every day, are nearer than most acknowledge. According to the 2013 Social Security Trustees Report, beneficiaries will face a painful 23 percent benefit cut in 2033 when the Social Security Trust fund runs out. By working on a bipartisan basis, we can meet the promises we have made to our seniors.

Opportunity Expanded

Our tax system should be simple, fair, and promote economic growth; but the U.S. tax code fails on all three counts. It is notoriously complex, patently unfair, and highly inefficient. The tax code's complexity distorts decisions to work, save, and invest, which leads to slower economic growth, lower wages, and diminished job creation. It is estimated that individuals, families, and employers spend over 6 billion hours and over $160 billion a year trying to understand a labyrinth of rules. Over the past decade, more than 4,400 changes have been made to the tax code, which averages to more than one per day. This budget proposes to solve these problems by calling for a reformed tax code.

Currently, the U.S. corporate tax rate is just over 39 percent—the highest rate in the industrialized world. Additionally, the top federal rate on smaller, unincorporated businesses reaches 44.6 percent. Roughly half of all U.S. active business income and half of private-sector employment are derived from these businesses—such as partnerships, S corporations, and sole proprietorships. These high tax rates discourage investment and job creation, distort business activity, and put American businesses at a competitive disadvantage. It is also important to note that in Wisconsin; approximately 9 out of 10 businesses file their taxes as individuals. These small businesses, known as "sub-chapter S corporations," limited liability corporations (LLCs) and partnerships employ more than half of all private sector workers. With two-thirds of the net new jobs in America being created by small businesses, raising taxes on these businesses would kill job creation—especially at a time when some of our foreign competitors are lowering their tax rates on business as low as 15 percent. By making the tax code more conducive to innovation and investment, we can stimulate job growth and get the economy back on the road to recovery.

The Path to Prosperity would simplify the tax code to make it fairer for American families and businesses. Our plan would reduce the corporate tax rate to 25 percent and transition the tax code to a more competitive system of international taxation, creating a level playing field between American businesses and their foreign competitors, which would help keep jobs in the U.S. The tax code for individuals would also be simplified, consolidating the current seven individual-income-tax brackets into two brackets—setting the first bracket at 10 percent and the top bracket at 25 percent. Economists have shown that lowering overall rates and broadening the tax base will promote economic growth and support job creation the private sector. By implementing these reforms to our tax code, we can protect the American dream for generations to come.

Safety Net Strengthened

The current system in place to battle poverty in America is broken. Rather than provide a roadmap out of poverty, Washington has created a complex web of programs that are difficult to navigate. Some programs provide critical aid while others discourage families from getting ahead. Presently, there are 92 different government programs aimed at fighting poverty that spend over $800 billion each year. This budget recognizes that we owe families much better than the status quo.

The Path to Prosperity applies the lessons learned from successful welfare reforms of the past to current federal-aid programs. It gives those closest to the people who rely on these programs better tools so they can root out waste, fraud, and abuse. Additionally, it empowers recipients to get off the aid rolls and back on the payroll, rethinks our job-training programs by consolidating current programs into more targeted career-scholarship programs, and enables reformers at the state level to strengthen and secure Medicaid by transforming the program from an open-ended entitlement into a block-granted program. In doing so, states would no longer be shackled by federally determined program requirements and enrollment criteria. Instead, each state would have the freedom and flexibility to tailor a Medicaid program to fit the needs of its population. By enlisting states in the fight against poverty, this budget builds a partnership between the federal government and our communities.

This budget came before the House on April 10, 2014, and was passed by a vote of 219 – 205. I was encouraged that my colleagues chose to support commonsense spending restraint, much-needed economic growth, and a balanced budget.

Ultimately, a budget is more than just a list of numbers: it is an expression of our governing philosophy. This budget offers the American people a brighter future. It would stop spending money we do not have, create jobs, and expand economic opportunity. And most importantly, it would restore the promise of this exceptional nation.

Additional Information

Washington, DC Office
  • 1233 Longworth House Office Bldg
  • Washington, DC 20515
  • Phone: (202) 225-3031
  • Fax: (202) 225-3393
Janesville Office
20 South Main Street
Phone: (608) 752-4050
Suite 10
Fax: (608) 752-4711
Janesville, WI 53545
Toll Free: (888) 909-RYAN (7926)
Kenosha Office
5031 7th Avenue
Phone: (262) 654-1901
Kenosha, WI 53140
Fax: (262) 654-2156
Racine Office
216 6th Street
Phone: (262) 637-0510
Racine, WI 53403
Fax: (262) 637-5689
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