Military Spending Emerges as Big Dispute in Debt-Limit Talks

Military Spending Emerges as Big Dispute in Debt-Limit Talks

Funding for the military has emerged as a key sticking point in reaching an agreement to raise the country’s borrowing limit and avoid a catastrophic default. Republicans are pushing to free the Defense Department from spending caps and make deeper cuts to domestic programs like education.

President Biden resisted this demand, citing a long string of previous budget agreements that either cut or increased military spending, along with discretionary non-defense programs.

How the sides resolve this issue will be critical to the ultimate outcome of a debt deal. It remains possible that in order to reach a deal that prevents a default, Democrats will accept a deal that allows military spending to increase even if nondefense spending falls or stays the same.

Biden’s advisers and Republicans in Congress, represented by Speaker Kevin McCarthy, are trying to negotiate an agreement to remove the credit limit before the government runs out of money to pay its bills on time, which is expected to happen as early as June 1 could. Republicans have refused to raise the limit unless Mr. Biden agrees to federal spending cuts outside of the military.

Spending cut talks have focused on a relatively small part of the budget – so-called discretionary spending. This edition is divided into two parts. One is military spending, which the Congressional Budget Office estimates will total $792 billion for the current fiscal year. The other half funds a wide range of domestic programs, like Head Start-Pell scholarships for preschools and colleges, as well as federal agencies like the Department of the Interior and Department of Energy. According to budget office estimates, it will be $919 billion this year.

A separate category, known as mandatory expenses, was largely considered taboo in the talks. That spending, which is the primary driver of future spending growth, includes programs like Social Security and Medicare.

Administration officials have proposed freezing both halves of discretionary spending for the next year. This would amount to a budget cut compared to the projected expenditure, since the budget office books the amount of expenditure. Spending for both parts of the discretionary budget is expected to increase by just 1 percent for fiscal year 2025. That could also amount to a budget cut, since 1 percent would almost certainly be below the rate of inflation. This proposal would provide savings of about $1 trillion over the course of a decade compared to the Budget Office’s current projections.

Republicans rejected this plan at the negotiating table. They urge actually cutting nondefense spending — that is, spending fewer dollars on it next year than the government spent this year. They also want military spending to keep rising.

“It just sends bad news and Republicans feel that it wouldn’t be in our best interest to cut spending at this point given China and Russia and a lot of instability around the world,” he said Rep. Robert B. Aderholt, a Republican from Alabama who sits on a budget committee that oversees Pentagon spending. “That was the basic position held by most Republicans.”

A similar tone was voiced by Mr McCarthy when speaking to reporters on Thursday. “Look, we’re always looking for savings and other opportunities, but we live in a very dangerous world,” he said. He added, “I think the Pentagon actually needs to have more resources.”

Republicans set a 10-year discretionary spending limit that also raises the debt ceiling through next year in a bill they passed last month, and party leaders said they would exempt the military from those limits. Mr. Biden has vowed to veto the bill if it passes the Senate as it stands, which is unlikely.

White House officials have accused Republicans of focusing their planned savings on domestic programs, saying their bill would cut spending on border patrol, care for some veterans, Meals on Wheels for older Americans and a host of other popular programs.

“Speaker McCarthy and I have a very different view on who should shoulder the burden of extra effort to put our financial house in order,” Mr. Biden said Thursday at the White House. “I don’t think the whole burden should fall on the backs of America’s middle and working class.”

Congressional Democrats, including members of committees that oversee military spending, have attacked Republicans for focusing largely on non-defense programs.

“When you freeze discretionary spending, there’s no reason defense shouldn’t be part of that conversation,” said Washington Rep. Adam Smith, the top Democrat on the Armed Services Committee. Republicans, he said, are “taking a hostage to advance their very narrow agenda.” I’m not a fan of that. That’s not something I want to support.”

Any deal that increases military spending while freezing or cutting other discretionary spending would break a tradition of budget deals that dates back to 2011, when Republicans in the House of Representatives refused to raise the debt ceiling until President Barack Obama approved spending cuts. The deal, which avoided a default, focused on spending caps that split the cuts evenly between defense and non-defense programs.

The push to increase military spending while making bigger cuts elsewhere reflects a split in the Republican faction in the House of Representatives. This includes a large faction of defense hawks who believe the military budget is too small, and another large faction of spending hawks who want to significantly reduce the federal government’s fiscal footprint.

Mr McCarthy needs both groups to retain his position as Speaker, which he narrowly won this year after a marathon week of efforts to secure the votes. And he will have to manage both if he tries to push a debt limit agreement with Mr. Biden through the House of Representatives.

Catie Edmondson contributed to the coverage.