White House budget director Shaun Donovan said Thursday that he is optimistic about reaching a deal on lifting caps on government spending after testifying on President Obama’s budget before the Republican-led Congress this week.
“I have been surprised. I’m not going to name names here, but [there is] a broad range of Republicans who not only seem open to this, but actually are working on discussion between Democrats and Republicans on this,” Donovan said of a deal to lift the spending caps on defense and domestic discretionary spending and cut spending and raise taxes elsewhere in the 10-year budget window.
“I would say this has a real potential to get done,” Donovan said at a press event hosted by the Christian Science Monitor in Washington on Thursday.
In its budget published Monday, the White House called for spending $37 billion more on domestic programs and $38 billion more on defense than currently allowed under the spending caps set in the bruising negotiations over fiscal policy between congressional Republicans and the White House over the past few years.
Obama’s plans for spending and taxes were immediately dismissed by Republicans, and Donovan faced aggressive questioning from GOP lawmakers in both the House of Representatives and the Senate in hearings earlier in the week.
Nevertheless, Donovan said that he was surprised at the number of Republicans who seemed supportive of the idea of trading increases in discretionary spending above the caps dollar-for-dollar with spending cuts in mandatory programs or tax increases. He acknowledged, however, that Republicans were more interested in lifting the caps on defense spending than on domestic programs.
“The idea that you would trade off relatively short-term increases in discretionary spending with longer-term savings on the mandatory and on the revenue side is actually really smart,” Donovan told reporters.
“I do think when you get beyond the sound bites, there’s a fair amount of consensus that the sequester was focused on the wrong problem,” Donovan said, referring to the across-the-board spending cuts that came into effect in 2013.
Those cuts affected discretionary spending. Domestic discretionary spending is near historically low levels as a share of the economy, while the projected future increases in spending and deficits are driven by mandatory spending on healthcare programs, Social Security, and interest on the debt.
Donovan said that the White House’s budget proposal was structured to accommodate a deal with Republicans that would loosen the spending caps on domestic discretionary spending and defense while cutting on the mandatory side or closing tax loopholes.
