Federal spending caps are likely to be the biggest sticking point in the ongoing negotiations to fund the federal government, and the fighting could be heaviest within the Republican Party.
House and Senate Republicans indicated they are on different pages when it comes to raising spending limits imposed under the 2011 Budget Control Act.
Senate Majority Leader Mitch McConnell, R-Ky., said Wednesday that lifting the caps is all but guaranteed in order to strike a deal with Democrats, who want more spending on domestic programs and have blocked Senate bills that stick to current limits.
“And so we are inevitably going to end up in a negotiation that will crack the Budget Control Act once again,” McConnell said Wednesday.
But House Majority Leader Kevin McCarthy, R-Calif., doesn’t agree. “I don’t see us busting the caps,” he told the Washington Examiner in an interview Thursday.
House Republican leadership aides told the Examiner House GOP lawmakers won’t approve a government funding measure that spends more without making equal cuts elsewhere in the government. A tax increase to pay for the additional spending would also be rejected, aides said.
The disagreement is one of many hurdles lawmakers face as a Sept. 30 deadline approaches to fund the government. While a short-term spending bill is likely to pass in the coming weeks, Congress will be left grappling with how to come up with a deal that can last from late fall through the remainder of the 2016 fiscal year.
In addition to spending limits, Republicans are at odds over whether to use spending legislation as a vehicle to defund Planned Parenthood after organization officials were shown on video discussing the sale of body parts. But the spending caps loom large as the biggest obstacle to a spending deal.
The 2011 deal to reduce federal spending called for an overall reduction of nearly $1 trillion over a decade, divided equally between defense and non-defense spending. The law mandates annual spending caps that require lawmakers to make cuts to both military and non-military programs.
Democrats have been leading the call for eliminating the caps on spending, citing the need for more money for domestic programs. But many Republicans have also been clamoring for additional funds for the military, which they say can’t withstand further cuts.
Sen. John McCain, R-Ariz., who is chairman of the Senate Armed Services Committee, has been among the most vocal in calling for the sequester to be lifted for defense spending.
The two most recent fiscal years lifted spending beyond the caps, thanks to a bipartisan deal that raised money from new fees and pension restructuring. Additionally, defense spending was elevated in GOP’s proposed 2016 budget by shifting money intended for a wartime account.
Democrats are now refusing to pass a spending bill that doesn’t lift 2016 domestic spending, too. But lawmakers are running out of creative ways to increase spending without either cutting it from somewhere else or raising taxes.
This time, House Republican lawmakers say may seek the money through entitlement reform.
Rep. Joe Barton, R-Texas, said one plan Republicans are discussing involves a spending bill that raises money by reforming entitlements.They would pass it using a parliamentary tactic called reconciliation. The move would allow the GOP-led Senate to pass the measure with just 51 votes rather than the usual 60, which would prevent a Democratic filibuster.
“There is a majority of Republicans who want the budget caps, but there is a lot of pressure for more spending so the answer is to do entitlement reform through reconciliation,” Barton said. “It is one thing under consideration.”
House Appropriations Committee Chairman Hal Rogers, R-Ky., told the Examiner that using reconciliation to pass the spending bill is “an option.”
Republicans point to the April passage of the “doc fix” legislation, which permanently reformed the annual problem associated with the way the federal government reimburses doctors who treat Medicare patients. Republicans and Democrats worked together to pass the deal in Congress, and it was signed by President Obama, who praised it as a major bipartisan accord.
Lawmakers found the money to pay for the deal by requiring wealthier Medicare recipients to pay more, resulting in the first entitlement reform in decades.
Republicans say it is possible to secure another bipartisan agreement with Democrats on entitlement reform.
“We did it in the doc fix,” Rep. Tom Cole, R-Okla., a member of the House Appropriations Committee, said. “It worked and we did it with overwhelming numbers from each side.”
Cole said entitlement reform could include welfare reform, or altering the cost of living adjustment for Social Security recipients, known as the chained consumer price index.
Any plan would have to include negotiating with Democrats, Cole said.
“Divided government means there is going to have to be some give and take on this issue,” Cole said.
