Military funding has emerged as a key sticking point in reaching a deal to raise the national borrowing limit and avoid a catastrophic default, with Republicans pushing for the Defense Department to save spending caps and make deeper cuts to domestic programs such as education.
President Biden balked at the request, pointing to a long line of past budget deals that have either cut or increased military spending in tandem with non-defense discretionary programs.
How the parties resolve this issue will be critical to the final outcome of any debt settlement. It remains possible that in order to reach a deal that avoids bankruptcy, Democrats will accept a deal that allows military spending to grow even as non-defense spending falls or stays flat.
Aides to Mr. Biden and congressional Republicans led by Speaker Kevin McCarthy are trying to negotiate a deal to lift the borrowing limit before the government runs out of money to pay its bills on time, which could be as soon as June 1. Republicans have refused to raise the limit unless Mr. Biden agrees to cuts in federal spending outside the military.
Talks about spending cuts have taken place narrowed in focus mostly to cover a relatively small corner of the budget – what is known as discretionary spending. These expenses are divided into two parts. One of those is money for the military, which the Congressional Budget Office estimates will reach $792 billion in the current fiscal year. The other half funds a wide range of domestic programs, such as Head Start preschool and college Pell Grants, and federal agencies such as the Departments of the Interior and Energy. That will reach $919 billion this year, according to estimates by the budget office.
A separate category known as mandatory spending was largely considered off-limits in the talks. This spending, which is the main driver of future spending growth, includes programs like Social Security and Medicare.
Administration officials have proposed freezing both halves of discretionary spending for next year. This would mean a reduction in the budget compared to projected spending based on how the budget office accounts for spending levels. Spending on both parts of the discretionary budget could grow by just 1 percent in fiscal year 2025. This could also mean budget cuts, as 1 percent would almost certainly be less than the rate of inflation. The proposal would save about $1 trillion over a decade, compared to current budget office projections.
Republicans rejected the plan at the negotiating table. They advocate cutting non-defense spending in nominal terms — meaning spending fewer dollars on them next year than the government spent this year. They also want to allow further growth in military spending.
“It sends the wrong message and Republicans feel that it would not be in our best interest to cut spending at this time when you look at China and Russia and a lot of instability around the world,” said Representative Robert B. Aderholt, Republican of Alabama, who he sits on the appropriations panel that oversees Pentagon spending. “That’s the basic position that most Republicans have.”
Mr McCarthy sounded a similar tone when he spoke to reporters on Thursday. “Look, we’re always looking for savings and more, but we live in a very dangerous world,” he said. He added: “I think the Pentagon needs to have more resources.”
Republicans included 10-year caps on discretionary spending in a bill they passed last month that also raised the debt ceiling through next year, and party leaders said they would exempt the military from those caps. Mr. Biden has vowed to veto the bill if it passes the Senate in its current form, which is unlikely.
White House officials criticized Republicans for focusing their proposed discretionary savings 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.
“House Republicans have been clear about how they see progress and the cuts they’ve put in place — those 22 percent cuts to veterans, health care and public safety — that will hurt American families,” Karine Jean-Pierre, The White House press secretary said this month .
Democrats in Congress, including members of committees that oversee military spending, have blasted Republicans for focusing largely on non-defense programs.
“If you’re going to freeze discretionary spending, there’s no reason in the world why defense shouldn’t be part of that conversation,” said Representative Adam Smith of Washington, the top Democrat on the Armed Services Committee. Republicans, he said, “are taking hostages to push their very narrow agenda. I’m not a fan of that. That’s not something I want to support.”
Any deal that would increase military spending while freezing or reducing 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 spending cuts . The deal that prevented failure was aimed at spending ceilings which to divide their reduction equally between defense and non-defense programs.
The push to increase military funding while making more significant cuts elsewhere reflects the divide in the House Republican caucus. It includes a large faction of defense hawks who say the military budget is too small, and another large faction of spending hawks who want to significantly shrink the federal government’s fiscal footprint.
Mr McCarthy needs both factions to retain the votes he narrowly won this year after a marathon week of canvassing. And he will have to navigate both as he tries to push any debt limit deal with Mr. Biden through the House.
Catie Edmondson contributed reporting.