Budget Panels Attempt to Please Caucus Factions

Republicans on the House and Senate Budget committees are striving to craft fiscal 2016 budget resolutions tailored to win the support of their divergent GOP caucuses, but still similar enough to allow for compromise.

That will not be an easy task, given the clout wielded by defense hawks in the Senate, and the concerns that more moderate GOP senators may have about House conservatives’ proposals to overhaul entitlement programs.

If they can find a path, it would help smooth the way for consideration of GOP policy priorities and passage of fiscal 2016 spending legislation, a top goal of Senate Majority Leader Mitch McConnell of Kentucky and Speaker John A. Boehner of Ohio.

Indications began to emerge this week that Senate Budget Committee Republicans are developing a budget resolution that will employ the same or similar discretionary spending limits for defense and non-defense as the House, which would make it easier for the two chambers to meld their differing budget plans into a single congressional budget resolution they could adopt as early as April.

South Carolina Republican Lindsey Graham, the most vocal defense hawk on the Senate Budget Committee, said the Senate budget resolution will “probably” stick with the caps and he could vote for the plan in that form. But he said that he would then work to get bipartisan agreement for a sequester replacement plan.

“I don’t mind starting with the BCA number but I’m going to be working with Democrats and Republicans to do a mini Simpson-Bowles to replace it,” he said, referring to the 2011 Budget Control Act and then to the deficit reduction plan produced by a bipartisan panel in 2010.

The biggest potential flashpoints between the two chambers include whether to increase defense spending above the sequester level; how to offset the spending increase; and how aggressively to pursue changes in health care programs such as Medicare and Medicaid

With the expiration of the two-year budget deal, the sequester caps return on Oct. 1, allowing base discretionary spending to rise about $3 billion above current levels. The fiscal 2016 caps limit national defense spending to $523 billion and non-defense spending to $493.5 billion. The combined overall discretionary limit is just less than $1.017 trillion.

Moving Ahead

The Budget committees, led by Georgia Republican Tom Price in the House and Wyoming Republican Michael B. Enzi in the Senate, appear to be on track to mark up their respective budgets later this month.

Price and Enzi both have said they intend to write plans that would eliminate the deficit within 10 years without a tax increase. GOP leaders are aiming to get the budget resolutions on the floor and adopted in both chambers by the end of March.

The challenge of agreeing on military spending has become more evident as defense hawks ratchet up their rhetoric to persuade the Budget committees to raise the limit on defense spending above the sequester cap.

In a letter last week, more than 70 House GOP lawmakers urged that a minimum of $561 billion be allocated for national defense in fiscal 2016, the amount proposed by President Barack Obama.

Senate Armed Services Chairman John McCain, R-Ariz., added that he would vote against the Senate budget resolution if it does not provide more money for defense. He is pushing to raise fiscal 2016 defense spending to a pre-sequester level of $577 billion.

More broadly, the gap between mainstream Senate Republicans and hard-line House conservatives is going to be extremely difficult to bridge for a budget resolution.

Take the fate of a proposed three-week stopgap funding measure for the Department of Homeland Security last week, which House conservatives blocked because it did not contain restrictions on Obama’s immigration policy. Similarly, the Senate easily shot down House efforts to find a way to restore those restrictions.

When it comes to the budget caps, the House Budget Committee is leaning toward sticking with them in its budget resolution, although no final decision has been made, according to lawmakers.

It will be harder to stick with those caps in the Senate, where defense hawks argue the military needs more funding next year and beyond.

Senate GOP leaders will need the support of just about every Republican. The GOP has a slim 12-10 majority on the Budget Committee and a 54-46 majority in the full Senate.

Finding Offsets

Republicans say any plan to raise the caps, either in a budget resolution or in subsequent legislation, would have to be offset with other spending cuts. A range of options are under consideration in both budget committees. One approach would be to offset the increased spending with cuts in mandatory spending programs.

In past budgets, House Republicans proposed offsetting higher defense spending with cuts in non-defense discretionary funds. That approach appears to have little support this year. Lawmakers say it would be difficult to pass fiscal 2016 spending legislation at such reduced levels.

“I think you have to follow the law,” said Oklahoma Republican Tom Cole, who sits on the House Budget Committee and chairs the House Appropriations Labor, Health and Human Services and Education Subcommittee. “I think the majority is for living within the BCA unless and until a larger deal is reached,” he said.

House Budget Committee member Tom McClintock, R-Calif., also favors retaining the statutory caps in the budget resolution. Asked if the Pentagon needs more money next year, he demurred.

“I think first and foremost it needs to spend all of its money effectively, and I think there are many reforms available for it to do so,” he said.

But another Budget Committee member, Marsha Blackburn, R-Tenn., acknowledged the need for higher defense spending while offering little on how a budget resolution would provide for it.

“It would not surprise me if we did not find a way to make something happen there” in the budget resolution, she said. “With the situation around the globe, people realize there is a need to address the military spending.”

Entitlement programs will be another thorny issue between the House and Senate.

G. William Hoagland, senior vice president at the Bipartisan Policy Center, said it will be hard for some Republican senators who are moderate or facing re-election in Democratic-leaning states to vote for a budget that calls for major changes in entitlement programs, which are likely to be included in the House plan at least.

The budget resolution does not go to the president for his signature, and any changes it envisions can’t take effect unless passed in separate legislation.

But Hoagland, a former GOP staff director of the Senate Budget Committee, said the changes endorsed in a budget are still important.

“Budget resolutions, even though they are symbolic so to speak, do create an opportunity going into an election cycle for a wonderful set of campaign ads, 30-second ads, that can really mess people up,” he said. “And I don’t know if a Susan Collins would be able to vote for a balanced budget resolution that shows significant reductions in Medicaid,” he said, referring to the Republican senator from Maine.