By Sarah Ferris - 01-27-16 06:00 AM EST
Grim new projections on the federal deficit are creating a challenge for Republican leaders, who have vowed to tackle entitlement reform ahead of the November elections.
Republican leaders are facing mounting pressure from conservatives to slow the growth of largely popular programs such as Medicare, Medicaid and Social Security, in line with the party’s broader goal of balancing the budget within a decade.
But with the numbers becoming more daunting, GOP leaders have to decide how aggressively to pursue major changes to entitlements as they seek to win back the White House in 2016.
“They have an opportunity here. The question is how much they’ll pursue it,” said Doug Holtz-Eakin, director of the Congressional Budget Office under the George W. Bush administration.
In its 10-year outlook released Monday, the Congressional Budget Office (CBO) announced that federal deficits are expected to grow by $100 billion this year, the first increase since 2009.
The numbers only get bleaker from there, with the CBO projecting that deficits will rise by another $10 trillion over the next decade.
Spending on mandatory programs is set to rise 7 percent in 2016, due largely to a boom in healthcare spending, adding new fuel to the GOP’s argument that entitlement programs are driving the country toward financial ruin.
Coupled with a weakening economy, the CBO numbers mean that Republicans will have to make even deeper cuts in this year’s budget blueprint to meet their goal of a balanced budget within 10 years.
“I don’t remember the last time I saw a budget process this hard,” said Maya MacGuineas, who has led the Committee for a Responsible Federal Budget since 2003.
“They’re going to have to find $8 trillion in savings to achieve balance. It’s not even in the realm of possibility,” MacGuineas said.
Speaker Paul Ryan (R-Wis.), one of Capitol Hill’s most experienced budget-writers, has already vowed to pursue major changes to Social Security, Medicare and Medicaid.
But Ryan himself has acknowledged that an attempt to reform entitlements would stand no chance of passage this year.
“Clearly that’s going to take a Republican president because this president has continued to kick the can down the road and I see no change in his behavior,” Ryan told reporters last week.
With action unlikely until a new president takes office, some Republicans argue the party is better off sounding the alarm about deficits without putting out a specific list of budget cuts that Democrats could attack.
Making the argument is particularly important, those Republicans say, in an election year when Democratic presidential candidates Hillary Clinton and Bernie Sanders are calling for massive expansions of the programs.
“I wouldn’t jump to, ‘Here’s my plan on Social Security, here’s my plan on Medicare.’ Out in budget fantasty-land on the Democratic side, people are saying we’re going to make all these things bigger,” said Holtz-Eakin, who also served as an adviser to Sen. John McCain (R-Ariz.) during his 2008 presidential run. “There’s a real disconnect.”
Conservatives are still bitter over the budget deal reached last fall by President Obama and then-Speaker John Boehner (R-Ohio) that added $30 billion in discretionary spending, largely without offsetting the costs.
Outside conservative groups such as Heritage Action for America and the Club for Growth also blasted House Republican leaders for helping pass a massive year-end tax package.
That tax deal, known as an “extenders” bill, contributed to the larger-than-expected increase in the national deficit estimate of the CBO.
“There’s enough blame to go around,” House Budget Committee Chairman Tom Price (R-Ga.) said last week when asked about deficits.
The White House budget will be released on Feb. 8, setting off a months-long battle over spending that both parties hope will play to their advantage in the elections.
For Republicans in Congress, their budget proposal will act as a campaign document and a way to affirm their commitment to deficit reduction.
Members of the House Freedom Caucus — the group that helped force Boehner out of office — have pushed to use this year’s budget to cut billions of dollars from the top-line spending levels that Democrats agreed to last year.
Ryan and Price have suggested they are constrained by that deal, though both have signaled they intend to push for reforms to federal spending.
Price said last week he was committed to “some type of welfare reform” that would also tackle deficits.
“I think it’s important that we look at ways we can actually get some deficit reduction that would save money that would address the increased spending,” he said, highlighting the new figures from the CBO.
One way of passing those reforms, he said, would be using the tool of budget reconciliation, which eliminates the filibuster threat for certain bills in the Senate.
But even if the House Republican Caucus could agree to the idea, a reconciliation bill with entitlement reforms faces poor odds in the Senate, where Majority Leader Mitch McConnell (R-Ky.) is fighting to project his majority on a difficult electoral map.