House Republicans have passed the budget plan introduced by House Budget Committee chairman Paul Ryan, R-Wis., for fiscal year 2014, which shrinks the number of tax brackets to two brackets of 10 and 25 percent.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
The bill passed Thursday on a party line vote of 221 to 207. Ryan’s budget blueprint, which he calls “The Path to Prosperity,” would also repeal the alternative minimum tax, reduce the top corporate tax rate to 25 percent, and transition the corporate tax system to a territorial system of international taxes. Ryan’s plan also calls for repealing the health care reform law, giving states more flexibility with their Medicaid programs, and providing a voucher-like premium support option for privatizing Medicare beginning in 2024 for workers born in 1959 or later.
“This budget debate was constructive,” Ryan said in a statement on the House floor before the vote. “It revealed each side’s priorities. We want to balance the budget. They don’t. We want to restrain spending. They want to spend more. We think taxpayers give enough to Washington. They want to raise taxes by $1 trillion—just take more to spend more. We want to strengthen programs like Medicare. They seem complicit in their demise. We see ObamaCare as a roadblock to patient-centered reform. They see it as a sacred cow. We think national security is a top priority. They want to hollow out our military. We offer modernization and reform, growth and opportunity. They cling to the status quo.”
Speaker of the House John Boehner, R-Ohio, hailed passage of the Republican budget. “It’s a good day for the American people,” he said. “Every family in America must balance their budget. Today House Republicans passed our bold plan to balance the federal budget over the next 10 years. “This budget does more than just balance. It helps improve people’s lives and addresses the things I think they most care about. Fixing the Tax Code, lowering rates means more jobs and higher wages for the American people. Supporting the Keystone pipeline and American-made energy means more jobs for the American people and lower energy prices. Repealing ObamaCare and supporting patient-centered reforms means more jobs and lower health care costs for the American people. Protecting and strengthening Medicare means a more secure retirement for older Americans. Cutting waste means more fairness and accountability for hard-working taxpayers.”
House Minority Leader Nancy Pelosi, D-Calif., noted that for the third year in a row, all House Democrats voted against the Ryan Republican budget blueprint. “The Ryan-Republican budget is nothing more than more of the same Romney-Ryan policies that the American people rejected last November—yet nearly every House Republican supported it and those that voted against it did so because they wanted to go further to the right,” she said in a statement. “Once again, House Republicans doubled down on a budget that will risk 2 million jobs next year, stall our economic recovery, raise taxes on the middle class, and end the Medicare guarantee. That is not a ‘path to prosperity;’ it is a ‘path to pain’ for working families, children, seniors, and our economy.”
Senate Democrats have introduced a competing plan that calls for $975 billion in additional tax revenue over 10 years (see Congressional GOP and Democrats Outline Competing Budget and Tax Plans). Senators are still attaching amendments to that bill, including one introduced Wednesday by Sen. Charles Grassley, R-Iowa, and co-sponsored by Senate Minority Leader Mitch McConnell, R-Ken., and several other Senate Republicans, which would make any tax increases revenue neutral, as well as remove the budget reconciliation instructions included in the budget blueprint by Senate Democrats.