The big problem with trying to cut spending in a debt ceiling bill

WASHINGTON – Republicans in the House of Representatives are urging Democrats to accept a debt ceiling bill that limits how much money Congress can spend next year.

But achieving that goal — and sustaining it — would require breaking a deadlock that has existed between the two parties for over a decade: how to split spending between military and domestic priorities.

Republicans want more defense spending and Democrats want more money for non-defense programs like health care, education and veteran assistance. In recent years, the two parties have struck a balance: just both raise, and each has a win.

Now House Speaker Kevin McCarthy, R-Calif., and his Conservative allies want to smash that pact, arguing that spending is spiraling out of control. But cutting domestic funds without touching the military, as many Republicans want, will not please Democrats.

Rep. Tom Cole, R-Okla, chair of the powerful regulatory committee, said defense spending should be cut because “it’s a very dangerous world right now.”

“Look, I think threats drive defense spending. Domestic priorities are wants and needs, but you don’t necessarily get everything. Defense is a whole different level of commitment for me,” he said.

The Democrats made it clear that they want equal treatment between the two.

“There is some parity between defense and non-defense spending,” said Senator Ben Cardin, D-Md. “And that is an issue that is important in our group.”

In view of an expected meeting between President Joe Biden and congressional leaders this week, Republican lawmakers say an agreement on “spending caps” is important to secure their support to stave off a dangerous debt default.

The debt ceiling bill passed by the House of Representatives would cut federal spending to fiscal 2022 levels and require donors responsible for allocating state funds to cut $131 billion compared to current spending by Congress.

Achieving this goal without cutting defense spending would require a dramatic 17% cut in non-defense discretionary spending.

“Democrats will not allow the non-defense sector to suffer disproportionate cuts. Therefore, Republicans must tone down their cutback calls if they want to forego defense,” said Brian Reidl, a former Senate Republican policy adviser who now works at the Manhattan Institute, a conservative public policy think tank.

Reidl said they could potentially avoid the row by freezing spending rather than making cuts, and suggested a “two-year freeze” on federal spending as a possible end goal.

Republicans have avoided specifying what they would cut other than to suggest they could avoid cuts in military spending. When the White House argued that the House Republicans’ debt ceiling bill — with its lack of detail on spending cuts — would mean damaging funding cuts for veterans in the non-defense portion of the budget, GOP leaders insisted they also include veterans could avoid cuts.

Senate Majority Leader Chuck Schumer, DN.Y., has dismissed this bill as the “Default on America Act,” insisting that the debt limit and federal funding be handled independently.

“This is too important for risk-taking and reckless ultimatums,” Schumer wrote in a letter Friday. “White House staff, as well as staff from my office, the Speaker’s office, Leader McConnell’s office and Leader Jeffries’ office will continue to meet to find a constructive path forward.”

McConnell is the Senate Minority Leader. Mitch McConnell, R-Ky.; Jeffries is Majority Leader in the House of Representatives. Hakeem Jeffries, DN.Y.

Liam Donovan, a Republican lobbyist analyzing legislative dynamics, said both sides could agree to introduce a spending cap for just one year. They could also agree on policy goals without disclosing exact spending figures. He suggested combining cuts with what counts as “savings” and “growth.”

“Once political parameters are agreed it becomes much easier – an agreement on the main spending for at least a year, savings from unused Covid funds, a commitment to work on the permit [reform] or other growth-oriented areas of mutual interest,” Donovan said.