Options for Meeting the House Budget's Reconciliation Instructions
The Fiscal Year (FY) 2018 House budget resolution includes reconciliation instructions requiring 11 House committees to report legislation that together reduces the deficit by at least $203 billion over ten years. This blog updates our previous list of savings options available to committees to reflect the contents of the reconciliation instructions as well as the Congressional Budget Office's (CBO's) scores of several provisions in President Trump's FY 2018 budget, since CBO's estimates would determine if reconciliation targets are met.
The budget resolution's reconciliation instructions assign each authorizing committee a ten-year deficit reduction target and require that they report legislation that would at least meet that target by October 6, 2017. Table 1 lists the committees included in the reconciliation instructions, their deficit reduction target, and major programs under their jurisdiction that could serve as potential sources of savings.
Table 1: Reconciliation Instructions in the FY 2018 House Budget Resolution
| Committee | Target | Major Programs Under Jurisdiction |
|---|---|---|
| Agriculture | $10 billion | Farm bill programs; Supplemental Nutrition Assistance Program (SNAP); food safety and other user fees |
| Armed Services | $1 billion | Military retirement; TRICARE |
| Education and the Workforce | $20 billion | Child nutrition programs; federal education and student loan programs; Pension Benefit Guaranty Corporation (PBGC; shared with Ways & Means) |
| Energy and Commerce (E&C) | $20 billion | Electromagnetic spectrum auctions; Strategic Petroleum Reserve; Nuclear Waste Fund; Medicaid; CHIP; Medicare (shared with Ways & Means) |
| Financial Services | $14 billion | Consumer Financial Protection Bureau; National Flood Insurance Program; Securities and Exchange Commission |
| Homeland Security | $3 billion | Aviation security fees; Terrorism Risk Insurance Program |
| Judiciary | $45 billion | Crime Victims Fund; liability law |
| Natural Resources | $5 billion | Federal lands; water projects; mineral resources |
| Oversight and Government Reform (OGR) | $32 billion | Federal employee retirement and health benefits |
| Veterans' Affairs | $1 billion | Veterans health, disability, housing, pension, education, and readjustment benefits |
| Ways and Means (W&M) | $52 billion | Taxes and refundable credits; Supplemental Security Income (SSI); Temporary Assistance for Needy Families (TANF); Unemployment Insurance; Medicare (shared with E&C); PBGC (shared with Ed & Workforce) |
| Total | $203 billion |
While the budget resolution includes several policy recommendations, it is ultimately up to each committee to decide how it will meet its deficit reduction target. Numerous options exist for the committees to choose from, including several policies included by both Presidents Trump and Obama in their budgets. Ideally, the committees of jurisdiction should use the opportunity to help enact reforms addressing the key drivers of our long-term debt. While Social Security cannot be changed in reconciliation, the Ways & Means and Energy & Commerce Committees have several options to reform Medicare they could report, including several that do not affect benefits and have bipartisan support.
Table 2: Possible Savings Options by House Committee
| Committee(s) | Policy | Trump Budget | Obama Budget | 10-Year Savings |
|---|---|---|---|---|
| Agriculture | Enact a retailer application fee for SNAP | Yes | $2 billion | |
| Agriculture | Enact user fees for food safety, animal and plant health, and grain inspections | Yes | Yes | $1 billion to $6 billion |
| Agriculture | Limit SNAP work requirement waivers to high unemployment areas | Yes | $22 billion | |
| Agriculture | Restrict categorical eligibility for SNAP | Yes | $11 billion | |
| Agriculture | Reduce farm subsidies | Yes | Yes | $14 billion to $29 billion |
| Agriculture | Require states to match 25% of all SNAP costs | Yes | $92 billion | |
| Armed Services | Increase annual premiums for TRICARE-for-Life enrollment | Yes | $1 billion | |
| Armed Services | Increase TRICARE pharmacy copays | Yes | Yes | $2 to $3 billion |
| Armed Services | Introduce minimum out-of-pocket payment for TRICARE-for-Life | $27 billion | ||
| Ed & Workforce | Increase origination fees for student loans from 1 to 4 percent | $19 billion | ||
| Ed & Workforce | Eliminate Public Service Loan Forgiveness | Yes | $24 billion | |
| Ed & Workforce | Eliminate subsidized student loans | Yes | $23 billion | |
| Ed & Workforce | Consolidate income-based repayment plans into a single program | Yes | Yes | $23 billion to $53 billion |
| Energy & Commerce | Extend spectrum auction authority | Yes | Yes | $1 billion |
| Energy & Commerce | Modify Medicare Part B drug reimbursements | Yes | $7 billion | |
| Energy & Commerce | Encourage use of generic drugs by low-income Medicare beneficiaries | Yes | $9 billion | |
| Energy & Commerce | Accelerate manufacturer discounts for brand name drugs | Yes | $12 billion | |
| Energy & Commerce | Reduce Strategic Petroleum Reserve by half | Yes | $17 billion | |
| Energy & Commerce | Expand Medicare and Medicaid drug rebates | Yes | Up to $150 billion | |
| Financial Services | Restructure the Consumer Financial Protection Bureau | Yes | $7 billion | |
| Financial Services | Reform the National Flood Insurance Program | Yes | $10 billion | |
| Financial Services | Eliminate Orderly Liquidation Fund | Yes | $15 billion | |
| Homeland Security | Increase aviation passenger security fees | Yes | $5 billion to $25 billion | |
| Judiciary | Rescind money from the Crime Victims Fund | $10 billion | ||
| Natural Resources | Lease oil and gas in the Arctic National Wildlife Refuge | Yes | $2 billion | |
| Natural Resources | Repeal Gulf of Mexico Energy Security Act payments to states | Yes | $4 billion | |
| Natural Resources | Repeal borrowing authority for Western Area Power Administration | Yes | $1 billion | |
| Natural Resources | Divest Bonneville Power Administration transmission assets | Yes | $8 billion | |
| OGR | Peg G-Fund interest rate to 3-month Treasuries | $33 billion | ||
| OGR | Reduce federal retirement benefits and cost-of-living-adjustments (COLAs) | Yes | $55 billion | |
| OGR | Increase federal employees' retirement contributions | Yes | Yes | $20 billion to $103 billion |
| Veterans Affairs | Extend round-down of COLAs for veterans' benefits | Yes | Yes | $2 billion |
| Veterans Affairs | Eliminate Individual Unemployability benefits for those 62 and over | Yes | $43 billion | |
| Ways & Means | Fund Reemployment Services and Eligibility Assessments | Yes | Yes | $1 billion |
| Ways & Means | Eliminate TANF contingency fund | Yes | $6 billion | |
| Ways & Means | Decrease SSI benefits for multi-recipient families | Yes | $7 billion | |
| Ways & Means | Increase Customs Merchandise Processing Fee | $10 billion | ||
| Ways & Means | Reduce TANF block grant | Yes | $15 billion | |
| Ways & Means | Eliminate the Social Services Block Grant | Yes | $16 billion | |
| Ways & Means | Require a Social Security Number for Child & Earned Income Tax Credits | Yes | $30 billion | |
| Ways & Means | Reform and reduce payments for graduate medical education | Yes | $15 billion to $40 billion | |
| Ed & Workforce and W&M | Increase PBGC premiums to improve solvency (multi-committee) | Yes | Yes | $4 billion |
| E&C and W&M | Reform Medicare cost-sharing (multi-committee) | Up to $20 billion | ||
| E&C and W&M | Restrict medigap plan coverage (multi-committee) | $45 billion | ||
| E&C and W&M | Expand bundled payments and promote new payment models (multi-committee) | Yes | $5 to $50 billion | |
| E&C and W&M | Reduce Medicare coverage of bad debts (multi-committee) | Yes | $15 to $50 billion | |
| E&C and W&M | Reduce payments to post-acute providers (multi-committee) | Yes | $25 to $75 billion | |
| E&C and W&M | Adopt competitive bidding for Medicare Advantage (multi-committee) | Yes | $25 to $50 billion | |
| E&C and Judiciary | Limit medical malpractice claims (multi-committee) | Yes | $50 to $73 billion |
Each of the 11 authorizing committees have a number of options available to meet their reconciliation instructions and do their part to generate at least $203 billion in deficit reduction. However, lawmakers will need to go much further if they are to put debt on a sustainable downward path. If just $203 billion in savings were enacted, debt in 2027 would still rise to 90 percent of GDP, just 1 percentage point lower than what CBO currently projects under existing law. We hope that the authorizing committees will view their savings targets as the bare minimum and use this opportunity to enact meaningful reforms to put our long-term fiscal situation under control.
What's Next
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