The 2013 budget dance in Washington has begun: Both House Republicans and Senate Democrats unveil their budgets this week, and President Obama is sitting down with the major players in the debate. Unless you're a serious budget nerd, however, it's virtually impossible to make sense of exactly what's going on - and what it means for the country. Below, we do our best to sort it all out.
Start with the basics, ok?
Sure. Yesterday, House Budget Committee chairman Paul Ryan, R-Wis.,, which starts in October. It would cut spending by $4.6 trillion through 2023, repeal Obamacare and the Wall Street reform bill, turn Medicare into a voucher-type program for Americans under 55, reduce Medicaid spending, scale back food stamp and education spending, reform the tax code so that there are only two individual tax rates (25 percent and 10 percent), reduce corporate taxes, and limit future spending growth to 3.4 percent.
Details of the Democrats' budget blueprint also began emerging yesterday. The, D-Wash., would achieve $1.85 trillion in savings over 10 years, according to her office, in part by raising tax revenues by nearly $1 trillion dollars through closing tax loopholes. We will know more about the specifics later today when Murray's plan is formally unveiled, though White House sources say Senate Democrats are not including the reforms to entitlements Mr. Obama has put forth in an effort to reach a "grand bargain" with Republicans.
Normally, the president releases a budget before Congress releases its plan. But the White House has yet to do so, despite a legal requirement that it be submitted to Congress by the first Monday in February. The White House suggested Tuesday that its plan will come during the week of April 8.
Wait, why are we talking about October? Isn't the government going to run out of money before that?
It is! Right now, the government is only funded through March 27. If Congress doesn't act before then, we could see a government shutdown. The House passed a $982 billion "continuing resolution" to fund the government through October last week, and the Senate is taking up its version this week.
The two chambers would fund the government very differently, but there is some relatively good news: Leaders in Washington do not want to put the public through another nasty budget fight so soon after the "fiscal cliff" battle, and they are indicating that they will come to an agreement without too much of a struggle. That's not a sure thing - Senate Majority Leader Harry Reid, D-Nev., indicated yesterday he may have to employ newly agreed upon Senate filibuster rules to move past a GOP filibuster - but it appears the major fight is going to be over the budget blueprints, not the stopgap measure.
OK, so then these budget blueprints fund the government for fiscal year 2014, right?
Nope. These proposals are more "blueprint" than "budget" - essentially, they are guidelines to how the government should spend its money over the next decade. They will not become law -- the president doesn't sign them -- and are thus non-binding. When it comes to actually funding much of the government, Congress still has to pass separate appropriations bills for the president to sign. (It's also worth pointing out that much of the federal government's spending is mandatory - if you qualify for Social Security benefits, for example, you don't have to depend on an appropriator to get them.)
Here's how it will work in a best-case scenario: The House and Senate both pass their budget blueprints, hopefully by Easter. (This is made easier in the Senate by the fact that a budget cannot be filibustered, and can thus be passed with a simple majority.) The bills then go to the conference committee, where the two sides try to work out their differences. If we get a deal, Congress can use the blueprint as a guide to write appropriations bills to fund the government for the next fiscal year.