House Democratic Budget Focuses On Infrastructure And Job Creation, Reduces Deficit By $1.7 Trillion

20 days after automatic sequestration cuts went into effect, Congress is still trying to reconcile House Republicans’ and Senate Democrats’ budget proposals. On Wednesday, House Democrats introduced their own vision for the federal budget, promising to balance the budget by 2040 without the draconian spending cuts proposed by the GOP, while offering double the stimulus funding in the Senate Democratic plan.

The House Democrats’ budget, authored by Rep. Chris Van Hollen (D-MD), includes $1.2 trillion in revenues and reduces the deficit by $1.7 trillion, slightly less than the Senate’s goal of $1.85 trillion. Other highlights include:

$200 billion in stimulus. Like the Senate budget, House Democrats set aside $50 billion for urgent infrastructure repairs, but sets aside an additional $10 billion to establish an infrastructure bank. Borrowing from President Obama’s blocked American Jobs Act, the House budget surpasses the Senate’s on funding to boost employment for teachers, police officers, firefighters, and veterans. $19 billion is also set aside as a tax credit for businesses that increase their payroll.  A focus on job growth. The Century Foundation estimates Van Hollen’s budget would boost GDP growth by .4 percent and add roughly 450,000 jobs more than under current policy in 2013, while cancelling sequestration would add even more. The House GOP budget, in turn, would keep sequestration in place, eliminating 750,000 jobs in 2013 and more than 2 million in 2014. Compared to the House GOP budget, Van Hollen’s budget would boost GDP 1.8 percent and add more than 2.1 million jobs by 2014.

Protection for the safety net. While the Republicans’ plan would end the guaranteed Medicare benefit, privatize health insurance for seniors and turn Medicaid into a block grant program run by the states, the House Democrats affirms protections for Medicare, Medicaid and Social Security.

Elimination of tax breaks for millionaires. Van Hollen’s budget permanently extends Bush tax cuts for the middle class while generating $1 trillion in new revenue by ending tax cuts and closing loopholes that benefit the wealthiest Americans. It also includes a “Buffet Rule” to ensure millionaires do not pay lower tax rates than the middle class.

The House Republicans’ plan purports to balance the budget in 10 years through severe spending cuts, though they would have to raise taxes on the middle class in order to pay for the tax cuts for millionaires without adding to the deficit.


The Democratic budget still cuts $80 billion from government programs. As multiple studies have noted, the past 3 budget deals have been dramatically skewed towards spending cuts, to the extent that the next deal should be 90 percent comprised of new tax revenues in order to round out a balanced deficit reduction plan.