A bitter budget fight is brewing.
Following the Republican budget resolution, the House and Senate are preparing to make yet another round of cuts to nondefense programs. Medical research, job training programs, and schools could face funding cuts under the 2011 Budget Control Act spending caps known as sequestration, while defense spending gets a free pass by using a budget gimmick. Senate Democrats, meanwhile, recently released their own spending template that would prevent those cuts by repealing sequestration for both defense and nondefense programs.
The stakes are high: this budget fight will set priorities for this year, and influence the economic and national security landscape for years to come.
Despite the budget impasse between parties, the congressional majority did something remarkable in their budget resolution this year: they agreed that President Obama’s defense budget for the next 10 years – including over $600 billion this year – is roughly the right amount of investment in our national defense.
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The majority’s embrace of President Obama’s defense budget is a dramatic shift. Just months ago, many conservatives were calling for huge increases in national defense spending. Senate Armed Services Committee Chairman John McCain (R-Ariz.) and other prominent conservatives had been advocating spending tens of billions more on defense, going back to the sky-high defense budgets we had during the peak of the wars in Iraq and Afghanistan.
Since both sides now agree on how much money should be used for defense spending, why not just agree to get rid of the Budget Control Act spending caps?
The problem is that there is still a deep divide about the right amount of domestic spending. The House and Senate majority don’t want to reverse any of the spending cuts for domestic priorities, even though they want to let the Pentagon spend over the budget caps.
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To get around these spending limits, the congressional budget designates all defense spending increases as Overseas Contingency Operations, or OCO. This designation was originally created to pay for the wars in Iraq and Afghanistan, and is exempt from defense budget caps. The congressional budget resolution calls for $96 billion dollars of war funding – even though the Obama administration and military leaders have only requested $58 billion.
Of course, it makes little sense to increase war spending as the war in Afghanistan is winding down, but that is not really where the extra OCO money will go. Rather, the House and Senate majority believe they’ve found a loophole that lets them spend more on defense while letting regular people suffer under sequestration for domestic spending.
Domestic programs have already been cut to the bone, and the congressional budget would force yet another round of cuts to critical programs. Even though the overall spending caps remain relatively constant from the current fiscal year to the upcoming 2016 fiscal year, necessary increases in some sectors – as well as inflation – are forcing cuts in other areas.
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For example, the Department of Veterans Affairs, or VA – which is considered nondefense spending for budgetary purposes – will need more money in FY 2016 to care for the nation’s wounded and disabled veterans. Already, the House has passed an FY 2016 appropriations bill that increases discretionary spending at the VA by 5.6%, although this legislation still cuts funding from President Obama’s budget request for the VA.
Congress is right to provide the VA with additional resources to meet the needs of our veterans. But since there is no OCO slush fund for the VA, sticking with the sequester caps means that more money for the VA takes money from other critical domestic needs, including affordable housing, transportation infrastructure, and clean energy research.
Importantly, some lawmakers are already looking at the soon-to-expire budget agreement, negotiated by Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wisc.) in 2013, as a model for the way forward. This bipartisan deal provided equal increases for defense and nondefense, enabling Congress and President Obama to fix some of the worst problems caused by sequestration.
The broad bipartisan agreement on President Obama’s recommendation for total defense funding is a good start. But to resolve the budget debate this year, lawmakers must work together to fix both the defense and nondefense budgets, rather than using budget gimmicks to pretend the problem away.
Harry Stein is the Director for Fiscal Policy at the Center for American Progress. Katherine Blakeley is a Policy Analyst with the National Security and International Policy team at the Center, focusing on the defense budget and defense policy issues.
