The debt ceiling deal House Speaker Kevin McCarthy (R-CA) extracted from President Joe Biden would, if fully enacted, reduce the federal budget deficit by about $1.5 trillion over the next 10 years, according to the nonpartisan Congressional Budget Office.
But while averting a disastrous default and reducing the rate of increase in discretionary spending, the budget caps mandated over the next two years would derail the efforts of leading Republicans to significantly increase the next defense budget to counter the rising threat posed by China.
DEBT LIMIT DEAL: WHERE IT STANDS AND WHAT IS STILL TO COME
In what has become an annual ritual that predates the Biden administration, the president typically submits to Congress a tight defense budget that funds the most urgent, immediate needs while deferring everything else to future years, with the rationale that those needs can be paid for by canceling current weapons systems or underperforming programs.
Congress, in its wisdom, routinely deems the president’s request to be “woefully inadequate” and a “threat to national security” and pledges to correct the deficiencies by adding billions more for the Pentagon.
For example, in 2017, shortly after he took office, President Donald Trump proposed a defense budget for fiscal 2018 of $639 billion, an increase of $56 billion, or 10% over the last year of the Obama administration.
As part of a two-year deal to avoid a government shutdown, Congress boosted the fiscal 2018 defense budget to $700 billion and the fiscal 2019 budget to $716 billion.
Last year Biden proposed an $813 billion defense budget for the current fiscal year, and by a wide bipartisan consensus, Congress added $45 billion, bringing annual spending to $858 billion.
The same scenario was set to play out this year.
This year Biden’s proposed an $886 billion fiscal 2024 defense budget which was greeted with howls of derision from top Republicans on both the House and Senate Armed Services committees, who quickly vowed to increase it by billions of dollars.
There’s a polite fiction to the ritual.
Defense Secretary Lloyd Austin, as a political appointee, has an obligation to defend the president’s budget request, even as members of the Armed Services committees know that he and the Pentagon wouldn’t object to more funding to meet critical needs.
At every appearance before Congress, Austin has been grilled over his support for a budget that Republicans and some Democrats argue is insufficient to deter China’s Xi Jinping, who has told his military to be ready, if necessary, to take over Taiwan by 2027 by force.
“For the third year in a row, President Biden has sent to Congress a budget request that cuts military spending, amid a more dangerous and complex threat environment,” said Sen. Roger Wicker (R-MS), the top Republican on the Senate Armed Services Committee, at a March 28 hearing.
“This budget also fails by actually shrinking the U.S. Navy, this year and in future years, instead of growing the fleet as is required by law. Congress, again, will need to rectify these failures,” Wicker said.
Democrats on the committee were muted in their criticism, but as was the case last year, they largely agree with their Republican colleagues that the defense budget is too small given the current threat from Russia and the future threat from China.
But the debt deal compromise locks in defense spending for the next fiscal year that starts Oct. 1 at $886 billion, which to the dismay of many Republicans, is exactly what Biden proposed, handing him a major victory.
In addition, the 99-page bill would further limit defense spending in fiscal 2025 to $895 billion, a mere 1% increase, effectively kneecapping GOP defense hawks who were on track to substantially increase defense spending above Biden’s proposal.
Republicans and Democrats alike are haunted by the ghost of sequestration, the 10 years of mandatory spending caps imposed by the 2011 Budget Control Act. That was the result of another standoff over raising the debt ceiling, which produced a decadelong impasse that crippled the Pentagon because it required Democrats and Republicans to agree to increase defense and domestic spending at the same levels.
Instead, it resulted in legislative gridlock.
“The deal McConnell and Biden negotiated was so bad it was eventually abandoned, but the damage had been done. This time, McCarthy and Biden — with McConnell’s support — have done it again. But it’s even worse,” tweeted Sen. Lindsey Graham (R-SC). “How far have we fallen as a Party on defense? The Biden defense budget is now the Republican defense budget.”
“I like Kevin a lot but don’t tell me that the Biden defense budget fully funds the military. We’ve attacked it for a year as Republicans because it takes the Navy into decline at a time we need a larger Navy to contain China,” Graham said on Fox News. “The overmatch with China is real. … If you send me the Biden defense budget to the United States Senate and declare it fully funds the military, you will have a hard time with me.”
In a background briefing for reporters, senior White House officials say the limits on defense spending are no worse than what typically happens when Democrats and Republicans can’t agree on a budget — that is, passing a continuing resolution (CR) that freezes spending at current levels.
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The debt deal includes incentives to avoid a CR by mandating that if the 12 required budget bills don’t pass by the end of this calendar year, both domestic and defense spending levels would drop slightly below the 2023 level.
“That’s an important incentive to pass bills because, you know, there are a bunch of folks in Congress who won’t want to see defense go below that 2023 level,” a senior administration official said.
