Funding for the military has emerged as a major sticking point in reaching an agreement to raise the country’s borrowing limit and avoid catastrophic bankruptcy, with Republicans pushing to save the Defense Department from spending caps and cut deeper on domestic programs such as education.
President Biden has rejected that demand, pointing to a long line of previous budget agreements that cut or increased military spending along with discretionary programs outside of defense.
How the parties solve that problem will be critical to the ultimate outcome of any debt settlement. It remains possible that in order to reach a deal that prevents a default, the Democrats will accept a deal that allows military spending to grow even if non-defense spending falls or stays the same.
Biden’s aides and congressional Republicans deputed by Chairman Kevin McCarthy are trying to negotiate an agreement to lift the borrowing limit before the government runs out of money to pay its bills on time, which is already at 1 June could be. Republicans have refused to raise the cap unless Mr Biden agrees to cuts in federal spending outside the military.
Talks about austerity have narrowed to a relatively small portion of the budget, known as discretionary spending. These expenses are split into two parts. One is money for the military, which the Congressional Budget Office estimates will total $792 billion for the current fiscal year. The other half funds a wide variety of domestic programs, such as Head Start preschool and college Pell Grants, and federal agencies such as the Department of the Interior and Energy. It will total $919 billion this year, the budget bureau estimates.
A separate category known as mandatory spending has largely been considered off-limits during the talks. That spending, which is the main driver of future spending growth, includes programs such as Social Security and Medicare.
Administration officials have proposed freezing both halves of discretionary spending for next year. That would amount to a cut, compared to expected spending, under the way the budget office accounts for spending levels. Spending on both parts of the discretionary budget should only grow 1 percent for fiscal year 2025. That could also amount to austerity, as 1 percent would almost certainly be less than inflation. That proposal would save about $1 trillion over the course of a decade, compared to current projections from the Budget Office.
Republicans rejected that plan at the negotiating table. They are pushing to actually cut non-defense spending, which means spending less dollars on it next year than the government spent this year. They also want to increase military spending.
“It just sends a bad signal and the Republicans feel like it’s not in our best interest to cut spending right now, when you look at China and Russia and a lot of instability in the world,” said Representative Robert B. Aderholt, Republican of Alabama, who sits on an Appropriations Panel that oversees Pentagon spending. “That’s been the basic position most Republicans have.”
Mr McCarthy made a similar sound when speaking to reporters on Thursday. “Look, we’re always looking where to find savings and others, but we live in a very dangerous world,” he said. He added, “I think the Pentagon should actually have more resources.”
Republicans included 10-year limits on discretionary spending in a bill they passed last month that also raises the debt ceiling through next year, and party leaders said they would exempt the military from those limits. Mr Biden has vowed to veto the bill if it passes the Senate in its current form, which is unlikely.
White House officials have urged Republicans to focus their proposed discretionary cuts on domestic programs, saying their bill would cut spending on border enforcement, care for some veterans, Meals on Wheels for older Americans and a host of other popular programs. would undermine.
“Speaker McCarthy and I have very different views on who should bear the brunt of additional efforts to get our fiscal house in order,” Biden said Thursday at the White House. “I don’t believe the whole burden should fall on middle-class and working-class Americans.”
Congressional Democrats, including members of committees overseeing military spending, have attacked Republicans for focusing largely on non-defense programs.
“If you’re going to freeze discretionary spending, there’s no reason why defense shouldn’t be part of that conversation,” said Washington Rep. Adam Smith, the top Democrat on the Armed Services Committee. Republicans, he said, “hostage to advance their very narrow agenda. I’m not a fan of that. That’s not something I want to support.”
Any deal that increases military spending while freezing or cutting other discretionary spending would break a tradition of budget deals that dates back to 2011, when House Republicans refused to raise the debt limit until President Barack Obama agreed to cuts. The default-preventing deal focused on spending caps that split their cuts evenly between defense and non-defense programs.
The push to increase military funding and cut more heavily elsewhere reflects a rift in the House Republican caucus. It includes a large faction of defense hawks who say the military budget is too small, in addition to another large faction of spending hawks who want to significantly reduce the federal government’s fiscal footprint.
Mr McCarthy needs both factions to maintain his grip on the speakership, which he narrowly won this year after a marathon week of trying to garner the vote. And he will have to navigate both as he tries to push a debt limit deal with Mr. Biden through the House.
Catie Edmondson reporting contributed.