Republicans working this week to resolve their differences over defense spending also will also have look ahead to an inevitable showdown with the White House over caps on spending that apply to almost everything else the government does.
“Non-defense discretionary spending,” a budget term that refers to almost everything that Congress appropriates outside of the Department of Defense, will be the battlefield for the latest budget showdown between President Obama and the GOP.
It’s a broad category of spending that President Obama has drawn a line around, saying last week that he would not allow the GOP Congress to enact any spending bills that keeps the $493 billion cap for fiscal 2016 in place.
“We can’t do that to our kids, and I’m not going to sign it,” he told the Huffington Post.
Instead, White House advisers have said, Obama will insist on a deal that raises the defense and non-defense spending caps by equal amounts, paying for the spending increases by cutting the deficit in later years.
That framework would be similar to the deal reached between former House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Patty Murray, D-Wash., in December 2013. That deal raised the spending caps for fiscal 2014 and 2015 by $63 billion total, paying for the spending by extending the caps further into the future and cutting some programs.
Just before leaving Washington last week, Ryan suggested that Republicans could be open to a similar deal in negotiations with the White House over spending for 2016. “I am willing to help to do that,” he told reporters, while acknowledging that he is no longer the Budget Committee chairman.
But before any such negotiations could begin, congressional Republicans must reconcile the differences between the Senate and House versions of the budgets relating to domestic discretionary funding, which are large, even while both spending plans are far removed from Obama’s vision. Budget Committee chairmen Sen. Mike Enzi, R-Wyo., and Rep. Tom Price, R-Ga., are talking over the differences with their staffs this week.
The caps, originally enacted by the 2011 Budget Control Act that stemmed from debt ceiling negotiations, limit non-defense discretionary spending to $493 billion and defense spending to $523 billion for fiscal 2016.
The caps do not apply to mandatory spending or spending that occurs automatically. Such spending includes Social Security checks, Medicare payments to hospitals and doctors, interest payments on the debt, Obamacare subsidies, and much more.
But they do constrain spending on everything that Congress specifically authorizes. Here’s what that was in 2013, on the non-defense side, according to the left-of-center think tank Center on Budget and Policy Priorities:
• 20 percent health care, including medical care for veterans, medical research at the National Institutes for Health, and the Food and Drug Administration.
• 19 percent transportation
• 15 percent education, including the Head Start program and parts of the Pell Grant program.
• 13 percent income support: Housing, homeless prevention, the Women, Infants, and Children nutrition program, heating assistance, and more.
• 13 percent science and technology, including the National Park Service, the National Aeronautics and Space Administration, and environmental grants.
• 12 percent law enforcement.
• 8 percent diplomacy
While the cap on domestic discretionary spending is $493 billion for fiscal 2016 under the current law, Obama’s budget proposes changing the law to lift spending to $526 billion.
Both the House budget authored by Price and the Senate version written by Enzi would keep the cap in 2016. Then, in future years, they would lower spending below the caps.
Price’s budget would reduce planned spending by $759 billion over the next nine years. Enzi’s would decrease it by $236 billion, a significant difference.
How those cuts would be achieved is not spelled out in the budget documents, which are broad blueprints that set spending levels for the appropriations committees to follow. Lawmakers would have to figure out the details later and pass bills for Obama to sign.
But that could prove difficult.
Non-defense discretionary spending declined every year between 2010, when Republicans won the House, and 2014, even before taking inflation into account. It was roughly $660 billion in 2010, according to the Office of Management and Budget, before falling to a little over $580 billion in 2014.
The Congressional Budget Office estimates that it will be up by roughly $10 billion for fiscal 2015.
As a share of the U.S. economy, non-defense discretionary spending has fallen to the lowest levels since the late 1990s in fiscal 2015, at 3.1 percent of gross domestic product, according to the Office of Management and Budget. Other than the dot-com bubble years, spending had not been so low since 1962, which is as far back as comparable numbers go.
Under the spending caps, the Congressional Budget Office expects non-defense discretionary spending to drop as low as 2.5 percent of gross domestic product. That doesn’t include the GOP’s planned decreases.
Obama said he refuses to let that happen, citing the cuts to education funding and research that he says would stunt U.S. economic growth.
But Price, a medical doctor known as a fiscal conservative, has said he thinks spending could still be cut.
“We need to be as responsible as we can be on the discretionary side,” he told reporters before kicking off the budget process late last year. “And there’s always places to save money, always places to save money.”
