Spending Caps Are Fraying in the Face of Republicans' New Budget Reality

Budget maneuvers congressional Republicans are undertaking suggest the statutory discretionary spending caps, which some lawmakers consider a major party accomplishment, may not survive a GOP-controlled Congress.

The budget actions in both chambers show lawmakers straining against the limits on defense spending and choosing to push more money to the Pentagon, even if that conflicts with deficit-reduction goals.

That choice may put lawmakers on a path toward a budget deal similar to one they struck in 2013, and could give President Barack Obama leverage as he tries to get an agreement to push up domestic spending.

The latest arrow aimed at the spending limits came when the House Rules Committee revived Monday a rarely used “Queen of the Hill” procedure, allowing the top vote-getter among several budgets to be the one the chamber finally adopts. The procedure allows Republicans to adopt a substitute fiscal 2016 budget resolution, which sidesteps the $523 billion defense cap by bumping up war funding without any offsets.

GOP leaders feared the fiscal 2016 budget resolution adopted by the House Budget Committee last week would not get enough Republican votes to pass, even though it added $36 billion to the $58 billion in the Overseas Contingency Operations account sought by Obama. The emergency war funding is outside the constraints of the discretionary caps set in the Budget Control Act, which expire after 2021.

The substitute, offered by House Budget Chairman Tom Price, R-Ga., as an alternative to the plan he wrote and the Budget Committee adopted, ups the increase to $38 billion for a total of $96 billion and does not require any of it to be offset. The first Price budget would require any war spending above $73.5 billion to be offset.

“There are significant differences of opinion as to how we ought to, as a conference, address the need for more defense spending and this accommodates that,” Price said.

Deficit hawks, however, are not impressed with lawmakers’ resolve.

Ed Lorenzen, senior adviser to the Committee for a Responsible Federal Budget, said opposition to offsetting higher defense spending suggests a lack of will to reduce the deficit — even though both GOP plans envision a balanced budget.

“It will be much harder for congressional Republicans to hold the line on sequestration and demand spending cuts to offset sequester relief if they go forward with plans to effectively eliminate the defense cuts required by sequestration without offsetting the costs,” he said. “The opposition to the requirement that a portion of higher defense spending be offset with spending cuts and the plan to pass [a ‘doc fix’] bill that exempts $140 billion in increased Medicare spending from PAYGO requirements requiring offsets is not a good sign about the willingness of Congress to actually follow through on any of the spending cuts assumed in the budget resolution.”

Others say the conflict was foreshadowed in the Budget Control Act, which Congress last sidestepped in 2013 with the pact negotiated by Sen. Patty Murray, D-Wash., and Rep. Paul D. Ryan, R-Wis., that raised the spending caps for two fiscal years. That deal expires at the end of fiscal 2015.

“Our concern with BCA was exactly this: Politicians would refuse to prioritize and it would create pressure to increase spending,” said Dan Holler, communications director for Heritage Action for America. “And there is every reason to expect another Ryan-Murray style deal is the end goal for many members this year.”

The Senate Budget Committee was faced with a potential inability to adopt its own budget resolution last week, until it included an amendment by Lindsey Graham, R-S.C., that increases the OCO account by $38 billion to $96 billion. Like the House plan, the main Senate budget reflects the fiscal 2016 discretionary caps of $523 billion for defense and $493.5 billion for non-defense programs.

Congress has tampered with the discretionary spending caps created by the 2011 Budget Control Act ever since they were lowered through sequestration. Lawmakers delayed and adjusted the caps for fiscal 2013, and then passed the budget agreement that raised the caps in 2014 and 2015 and offset the increased spending with changes to mandatory programs later in the decade.

But the latest maneuvering around the caps is more significant because it occurs after the GOP captured the Senate last November, giving Republicans control of both chambers of Congress for the first time since before Obama was elected.

Oklahoma Republican Tom Cole — who sits on the Budget, Appropriations and Rules committees — said he doubts the budget resolution adopted by the Budget Committee would have passed the House because of opposition from defense hawks. “I think it would have been very substantial,” he said.

Cole anticipates the House will adopt the Price substitute later this week. “If it doesn’t, I don’t know what else will get the votes,” he said.

Republican lawmakers said the Price substitute was the product of discussions between the House Armed Services Committee, GOP leaders and the Budget Committee.

“Mac Thornberry has requested this,” House Rules Chairman Pete Sessions, R-Texas, said Monday, referring to the House Armed Services chairman.

The unusual rule for consideration of the budget resolution preserves the original budget resolution sent to the floor by the Budget Committee, while also providing an alternative that GOP leaders believe has a better chance of passage.

“There are significant differences of opinion as to how we ought to as a conference address the need for more defense spending and this accommodates that,” Price said.

Some conservatives wanted the budget committees to raise the limit on defense spending in the budget resolutions next year and offset the increase with a lower non-defense cap.

Price and Senate Budget Chairman Michael B. Enzi, R-Wyo., rejected that approach. They said unless there is a separate change in law, the action would trigger across the board cuts in defense spending next year, bringing defense funds back down to $523 billion anyway.

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