Defense-minded lawmakers are scrambling to draft a last-minute deal to raise Defense Department spending caps, as a deadline for congressional budget committee to release its guidelines for 2016 spending nears.
Sen. Lindsey Graham, R-S.C., said he and Sen. Kelly Ayotte, R-N.H., both of whom serve on the Senate Armed Services Committee as well as the Senate Budget Committee, are working behind the scenes to build consensus to an alternative to to sequester cuts before next week, when both the House and Senate Budget committees are expected to release separate marks on the spending limits for this year.
Instead of following the across-the-board sequester cuts, Graham is pitching the budget committee to support a “mini Simpson-Bowles,” referring to a 2010 commission of Republican and Democratic lawmakers and private-sector leaders who identifiedareas to generate new taxes, andareas of discretionary spending and entitlement programs to cut. However, in 2012, the House quickly rejected the Simpson-Bowles suggestions.
“We’re not going to relieve or forgive the $540 billion — it’s not going to happen,” Graham said, referring to the amount he thinks is still due in sequestration cuts.”We’re not going to be able to get through the House a package that just forgives sequestration. Nor should we. We’re $18 trillion in debt.
“What we need to do is buy back sequestration. I’m working with Democrats and Republicans — we’ve got $540 [billion] left on sequestration — that’s defense and non-defense. Is there a way to buy that back, or at least part of it, by closing some loopholes in the tax bill to generate revenue? I’ll do that. That’s an ideological problem for some Republicans but not for me. I would generate some revenue by eliminating some deductions or capping deductions in the tax code if Democrats will help me make some small entitlement changes that would buy it back,” Graham said.
Ayotte wouldn’t share details of her role in the negotiations, noting only, “We’re still working on the budget negotiations, so at this point be premature to talk about them because were still talking as a committee.”
Senate Budget Committee member Patty Murray, D-Wash., also would not comment on the negotiations, but the panel’s Democrats have scheduled a press conference for Wednesday to discuss their way forward.
One senior Democratic staffer on the committee said members were aware of Graham’s proposed alternative, but were not ready to jump on board yet.
Sen. Jack Reed, D-R.I., the ranking member on the Senate Armed Services Committee, said any budget agreement would need to lift spending on both defense and non-defense programs to gain support in Congress.
If consensus on an alternative plan such as a mini “Simpson-Bowles” commission can’t be agreed on, Graham said he and Ayotte would leverage their votes to ensure that any budget resolution that remains at the sequestration level gets their support only if there’s an accompanying deficit-neutral reserve fund in place to replace the sequester cuts.
A “deficit neutral reserve fund” gives Congress flexibility to spend beyond the sequester caps — as long as it specifies that revenues would need to be generated to offset that added spending — without immediately requiring it to identify what tax mechanism would be used to generate that income.
Graham’s frequent ally and Armed Services Committee Chairman Sen. John McCain, R-Ariz., was skeptical of the idea, calling the reserve fund potentially “gimmicky.” But he said he would be ultimately supportive of any plan to get rid of the defense sequester cuts.
The House is out of session this week. But once the two chambers have released their spending marks for the Pentagon, the versions will have to be reconciled and approved by April 15.
