Republicans Will Unveil Their Budget Next Week. Here’s What You Need to Know.

Budget season on Capitol Hill is quickly approaching, but Republican lawmakers have remained quiet about the details of their fiscal blueprints.

Both Senate and House Republicans are expected to release separate budgets next week and plan to vote on the resolutions by the end of the month.

Though few details on the proposals have emerged, the new Republican-led Congress hopes to pass a balanced budget for the 2016 fiscal year, which begins Oct. 1.

Medicaid, Medicare and Social Security

According to people familiar with the Senate GOP’s budget negotiations, the budget for fiscal year 2016 will propose a transfer of control over Medicaid and food-stamp programs from the federal government to the states. Currently, states administer the Medicaid programs, but the majority of funding comes from the federal government.

Instead, the Senate’s Republican budget will appropriate the funding in a manner similar to block grants, in which a state gets a lump sum of money and has discretion in operating the program.

“It’s just a better way to give flexibility on the ground, where people are at,” Republican Sen. Lindsey Graham of South Carolina, a member of the Budget Committee, told the Wall Street Journal. “The more you manage something far away, the more costly and less efficient it becomes.”

Rep. Paul Ryan, R-Wis., floated the idea of block grants in 2012, and it became part of Republican presidential nominee Mitt Romney’s proposal to reform Medicaid. Ryan eventually became Romney’s running mate in the 2012 presidential election.

Republicans will unveil their fiscal year 2016 budget this week, but they’ve kept details of the plan under wraps.

Efforts to turn Medicaid into block grants has also gained traction at the state level. Both Missouri and Texas have requested the federal government distribute Medicaid funds in lump sums, as opposed to paying a percentage of the program’s costs.

According to the president’s budget, Obama proposed $590 billion for Medicare and $944 billion for Social Security—the two largest amounts recommended in his fiscal roadmap.

In their own budget proposal, according to reports, Republicans aren’t planning to deviate from Obama’s request.

“I believe Medicare reforms will be similar to what the president has proposed,” Sen. Mike Crapo, R-Idaho, told the Wall Street Journal.

Crapo is a member of the Budget Committee.

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Defense

In terms of defense spending, Republicans are currently disagreeing over whether to keep the spending caps that were put in place through sequestration. GOP senators like John McCain of Arizona and Graham, who are known for their strong stances on defense, have called for a budget that has the potential to exceed the spending limits put in place in 2011.

To give the Pentagon the authority to spend more than is allowed, Graham proposed a “deficit-neutral reserve fund” that would act as a placeholder for increased defense spending, while maintaining the caps enacted through sequestration.

“I need a commitment from the leadership that we’re going to have an ability to fix sequestration,” he said. “This is a defining moment for the Republican party.”

Budget Reconciliation

With a new Republican majority in the Senate and the largest majority in the House in decades, GOP lawmakers have discussed using budget reconciliation to repeal the Affordable Care Act.

Reconciliation involves drafting a set of “instructions” in a budget resolution that calls on committees in the House and Senate to draft legislation reconciling the law with the budget. The process was created with the Budget Act of 1974 and is used to balance the budget.

A reconciliation bill, which goes before the Senate, cannot be filibustered, and just a simple majority—51 votes—is needed to advance and pass the legislation.

In an effort to push Senate and House leadership to embrace the budget tactic, Rep. John Fleming, R-La., and 44 Republican lawmakers sent a letter to House Speaker John Boehner emboldening him to use budget reconciliation to repeal the Affordable Care Act.

“Mr. Speaker, our constituents are hurting from the consequences of Obamacare, and we urge you to include reconciliation instructions that will repeal all reconcilable aspects of Obamacare in the fiscal year 2016 budget resolution,” the letter stated.

Despite their request, GOP lawmakers are exploring whether to use budget reconciliation to present their response to the Supreme Court’s ruling in the case King v. Burwell. The case could unravel the Affordable Care Act if the high court rules against the Obama administration, and using budget reconciliation for Republicans’ fix could fast track the legislation.

“We’re going to try to keep it as broad as possible, so we have as much flexibility [as possible],” Republican Sen. John Cornyn of Texas told Politico. “The instructions will be broad enough that we can maximize our ability to use that. So it won’t be particularly specific or limited in the terms of the budget.”

House and Senate Budget Committee Chairs Tom Price of Georgia and Mike Enzi of Wyoming, respectively, say that their budget proposals will include aspects of Ryan’s past budgets. Ryan currently serves as chairman of the House Ways and Means Committee.

Separately, the Republican Study Committee, the 173-member group of conservative lawmakers in the House, will also release a budget toward the end of the month. Republican Study Committee Chairman Bill Flores of Texas selected Rep. Marlin Stutzman, R-Ind., to draft the conservative alternative to both the president and the GOP’s budgets.

The president released his $4 trillion budget to Congress in early February, which is expected to add $6 trillion to the deficit over the next 10 years, according to a report from the Congressional Budget Office released Thursday.

Obama’s budget serves as an advisory document to Congress for where he thinks the legislative branch should focus spending, and both the House and Senate will pass their own budget resolutions. Because the documents will likely differ, lawmakers from both chambers will establish a conference committee to create a final budget resolution, which must pass the House and Senate again.

This resolution will likely pass by mid-April.

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