Is this slide the best way to summarize the budget debate?

Ezra Klein is a big fan of this explanation of the budget debate from CBO Director Doug Elmendorf:

slide-budget-debate

I agree that it’s a solid summary of some of the key elements of each budget, but my earlier post on the budget process suggests that Elmendorf’s focus misses the most important part of the budget debate.

By limiting the discussion to the first ten years, the slide does not mention the House Republican plan to turn Medicare into a voucher program, which happens later. It highlights Social Security, Medicare, and defense, but lumps Medicaid into the “all other spending” category. Medicaid is an extremely important health care program for the poor and disabled, and the only safety-net for people needing long term care. The Republican budget makes enormous cuts to it, which I think are worth mentioning. Even though the budget doesn’t actually implement any of this, because it’s not a real law, it’s significant that House Republicans have voted en masse to support those plans for Medicare and Medicaid.

Even though a budget is all about setting parameters for taxes and spending, these aren’t particularly important elements of a Congressional budget. Tax laws are written separately, and spending decisions are made on an annual basis in appropriations bills.

The only number in the budget that has any effect on the appropriations process is an overall spending limit for the year called a “302(a) allocation,” named for the section of law that created it. The House and Senate budgets actually provide the exact same budget authority to the Appropriations Committee in their 302(a) allocation. The House budget provides Base Discretionary Action Budget Authority (BA) of $966,375,000,000 (p. 147). The Senate budget provides Security Category Discretionary Budget Authority of $497,352,000,000 and Nonsecurity Category Discretionary Budget Authority of $469,023,000,000, which adds up to the same $966,375,000,000 (p. 166). The allocations are the same because the budgets are both following the caps on security and nonsecurity spending that are imposed by sequestration.

Annual spending decisions are made in appropriations bills, not the budget, and that’s where the focus should be. House Republicans support sequestration levels for domestic spending, but not the military, and want to further cut domestic programs to reverse the defense cuts. Senate Democrats think there is some room to cut both defense and domestic spending, but not all the way to sequestration levels, and want to replace sequestration with a mix of tax increases and other targeted spending cuts.

If House Republicans and Senate Democrats follow their principles when writing their appropriations bills, we’ll see what that means for specific programs. The reason this is the better place to focus is that these decisions are about more than numbers on a page and percentages of GDP. They affect real programs that matter to real people, and the appropriations bills are where those choices are made.

So what really matters in the Congressional budget debate? The 302(a) budget authority allocations for the Appropriations Committee are identical, and reconciliation instructions are unlikely to be an issue this year. So all that’s left is the major policy statements that Democrats and Republicans endorsed when they voted for their budget. Those votes aren’t binding, but they could commit members to future votes on binding legislation, since no one want to flip-flop. Republicans supported deep cuts in Medicare and Medicaid, along with nearly every other area of domestic spending. Democrats supported modest cuts to Medicare and Medicaid, as well as defense and domestic programs, combined with higher taxes on the rich. Leave the numbers for the tax and appropriations bills.

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