Budget Conferees Face Huge Rift Between Defense Spending Plans and Caps | CQ Roll Call

By John M. Donnelly, CQ Roll Call

An upcoming House-Senate budget conference faces a daunting task in trying to find an alternative to a $20 billion cut in national defense spending that’s set to occur in January. But that mission may face better odds than appropriators would in trying to roll back their outsize defense spending blueprints for fiscal 2014 to meet spending caps.

The $20 billion figure represents the amount by which this month’s stopgap spending bill for fiscal 2014 (PL 113-46) exceeds the cap in law for national defense programs. The cap applies to “050” programs, which include military, intelligence, military construction, nuclear weapons and a few other security initiatives. The continuing resolution provides $518 billion for such programs, while the 2011 debt limit law (PL 112-25) requires that the number come down to $498.1 billion or less.

Given lawmakers’ general inability in the last several years to bridge their partisan differences, it will be difficult for budget conferees to find the revenue and/or spending cuts needed to garner that $20 billion.

If, as many experts predict, the conferees cannot come up with a bipartisan path forward, there will either be another CR or a fiscal 2014 spending bill or two for the Pentagon and perhaps other departments. The Defense Department, in fact, has never operated on a full-year continuing resolution, at least since the modern era of budgeting began in the late 1970s. Six months is the longest the Pentagon has gone without a fresh spending bill.

Many lawmakers assume the Defense Department and perhaps other security agencies will get some kind of appropriations bill for fiscal 2014. But writing those spending bills in a way that hews to the caps would be a political task of herculean proportions. That’s because the Senate’s 050 spending in its appropriations measures totals $552.2 billion — about the amount requested by the president — or $54.1 billion more than allowed by law. And the House’s measures add up to almost as much: $545.9 billion, or $47.9 billion more than the caps permit.

The question now is whether appropriators writing the Defense, Military Construction-VA and Energy-Water bills would make tens of billions of dollars in politically painful cuts to their own blueprints or — more likely, analysts say — just allow sequestration to bring the totals down to the cap levels.

“There would be a lot of hard decisions, a lot of broken glass on the floor,” said Todd Harrison, a senior fellow a the nonpartisan Center for Strategic and Budgetary Assessments, a defense policy think tank. “They’d rather let sequester do the cutting for them — then their hands are clean.”

Under the 050 grouping are the so-called 051 programs, which traditionally form about 96 percent of the 050 total. The 051 spending is comprised of Defense Department funds for the regular (non-war) parts of the budget (including intelligence) and for military construction. The rest of the 050 category includes nuclear weapons and a variety of other programs, including in the FBI.

Aiming High

Rather than hewing to the $498.1 billion the 2011 debt limit law requires for 050 programs in fiscal 2014, President Barack Obama requested $552 billion, of which about $544 billion is for its three major components: $515.6 billion for base defense budget; $11 billion for military construction; and $17.7 billion for atomic weapons programs and nuclear cleanup activities.

The appropriators in both chambers have so far gone along with the president in not letting the budget law restrict their spending plans. The House passed its Defense spending bill (HR 2397) at $512.5 billion, its Military Construction-VA bill (HR 2216) with just under $10 billion slated for Pentagon projects and an Energy-Water spending bill (HR 2609) with $16.9 billion proposed for the nuclear weapons establishment.

The Senate has not acted on its spending bills, but the measures that have emerged from Senate Appropriations this year went further above the defense caps than the House. The Senate Appropriations Defense measure (S 1429) would supply $516.6 billion for the base budget; the Pentagon component of its Military Construction-VA bill (HR 2216)would amount to $10.7 billion; and the nuclear weapons and cleanup programs (S 1245) would net $17.7 billion.

War money is not subject to the caps, although it would be subtracted under a sequester just like any other program not specifically exempted by the law.

It’s plausible that some funds in the war budget could be diverted to meet requirements that don’t fit into a constrained base budget. Senate appropriators’ Defense bill includes $77.8 billion for war programs, mainly in Afghanistan, while the House-passed companion spending measure would allocate about $82.3 billion for the war.

Looking Ahead

The conferees on the budget resolution (S Con Res 8, H Con Res 25) face a number of options for closing the $20 billion gap between fiscal 2013 appropriations for 050 defense programs and the fiscal 2014 caps. If they fail to increase revenue (because of GOP opposition) and/or decrease domestic spending (due to Democratic resistance), then they could perhaps try to change the law to spread the $20 billion fiscal 2014 cut over more than one year. But fiscal hawks will resist anything that moves tough choices to the future.

To the degree that fiscal 2014 appropriations are in flux, the process of writing a fiscal 2015 budget is also uncertain.

The military services and Defense agencies are preparing two different budgets at this writing — one based on their druthers and the other driven by the hard math of the budget caps.

If the budget conferees cannot reach agreement by mid-December, the Pentagon could suggest to appropriators where to cut in fiscal 2014 to feed into its sequester-level spending plan for fiscal 2015, said Russell Rumbaugh, a defense budget expert at the Stimson Center think tank.

“Everybody thinks sequester’s stupid, but everybody’s skeptical the caps will be raised,” he said. “The most likely case, then, is that DoD helps the appropriators find the $50 billion.”

It will be difficult task for appropriators, “both analytically and politically,” he added. “Even with DoD’s help, finding $50 billion is not something appropriators usually do.”

Frank Oliveri and Megan Scully contributed to this report.

via Budget Conferees Face Huge Rift Between Defense Spending Plans and Caps.