Setting up a showdown with the new Republican-controlled Congress, the Obama administration said Thursday that the president’s proposed 2016 federal budget would include a $74 billion increase in discretionary spending that blew past the caps in place under current budget law.
The fiscal 2016 budget plan, which would take effect Oct. 1, will be released by the White House on Monday. It proposes spending that’s 7 percent above the levels agreed to under a multiyear budget deal in 2011.
To sweeten the spending proposal for Republicans, President Barack Obama would boost military and domestic spending almost equally. The White House said military spending would total $561 billion and non-defense $530 billion; each increasing by $38 billion and $37 billion, respectively.
Presidential spokesman Josh Earnest said the one-for-one tradeoff “certainly is consistent with the kind of agreement that’s been reached in previous budget negotiations over the last several years.”
The White House proposal would force Republicans to choose between two priorities: national security and deficit reduction.
Obama presented his plan to a meeting of Democrats from the House of Representatives at a retreat in Philadelphia. Speaking to lawmakers Thursday night, the president said his plan would end the sequestration, a policy of automatic across-the-board spending cuts.
"Lets take a scalpel and not a meat cleaver and let's make sure we are funding the things that American families need,” Obama said..."The ground that middle class families lost still needs to be made up...As much as we should appreciate the progress that's been made, it shouldn't be a cause for complacency. Because we've got more work to do.”
Republicans were skeptical.
Until Obama “gets serious about solving our long-term spending problem it’s hard to take him seriously,” said Cory Fritz, a spokesman for House Speaker John Boehner, R-Ohio.
The 10-year budget deal agreed to in 2011 sought to reduce future spending by $917 billion over 10 years, forcing automatic cuts in years that lawmakers couldn’t agree on a budget. The idea was to bring down the annual budget deficit, which is expected to reach an Obama-administration low of $468 billion in the current fiscal year.
Even with forced spending cuts in place, deficits are projected to grow again in a few years, hitting $1.1 trillion in 2025. That’s because of mandatory spending programs such as Social Security and Medicare, sacred to voters. The White House wouldn’t say whether Obama’s proposal includes any cuts to such programs.
Presidential budgets tend to be dead on arrival, even in the best of times when the partisan divide hasn’t been as deep as it’s been. But with Republicans now controlling both chambers of Congress and eyeing the White House in 2016, the administration’s spending plan is as much about providing a campaign message for anxious Democrats as it is a serious budget blueprint.
Repeating Obama’s State of the Union appeal to the middle class, Earnest said the budget would “reverse harmful sequestration cuts and, instead, show how we can invest in his vision for middle-class economics by making paychecks go further, creating good jobs here in the United States and preparing hardworking Americans to earn higher wages.”
Obama, he added, will also make it clear that he’d veto a bill that didn’t include full Department of Homeland Security funding. Republicans are looking at ways to starve parts of the agency budget that deal with immigration, to push back on the president’s executive order late last year that allowed millions of undocumented aliens a deportation reprieve and path to legal work.
The proposed 2016 budget would pay for numerous initiatives such as making community college attendance free for millions by closing tax loopholes and tax-advantage programs that disproportionately benefit wealthier Americans. These include already-announced proposals such raising the capital gains tax to 28 percent for the richest Americans, tweaking the rules governing estate taxes “and then some,” said Earnest, hinting at further tax proposals Monday.
Obama’s proposed budget takes a cue from the two-year budget deal Congress agreed to in late 2013, which lifted by $85 billion the spending caps for the 2014 and 2015 fiscal years, the latter ending next Sept. 30. Obama proposes a one-year deal that raises spending by just $11 billion less than that amount, something Republicans are unlikely to find inviting.
The caps that would be busted come under what’s known as sequestration. Under the Budget Control Act of 2011, which took effect in March 2013 and runs through the 2021 fiscal year, automatic spending cuts take effect each year if lawmakers can’t agree on a budget.
The act envisioned maximum spending levels on defense and non-defense spending alike, and by spreading the pain equally, the hope was that lawmakers had incentive to compromise. It didn’t happen the first year, and then the two-year deal that ends Sept. 30 eased some of the pain.
Finding middle ground may prove harder now because the wave that swept Republicans into control of both chambers was fueled in part by promises of fiscal discipline.
“I find it very hard to believe that one of the first things they would do is ease the 2016 caps,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget Office who’s a fellow at the centrist research center the Urban Institute. “Defense is a whole other issue.”
That’s why Obama’s proposed budget puts Republicans on their back foot. In rejecting his proposal, they allow the Defense Department to be starved of what it says are needed funding increases.
“We are on track now to cut $1 trillion from America’s defense budget by the year 2021,” Senate Armed Services Committee Chairman John McCain, R-Ariz., bemoaned Wednesday at a hearing he’d called to examine the effect of the sequester on the military.
The cuts have made it difficult for the military to plan for the future or make long-term investments, said McCain, adding that absent action, “sequestration will return in full in fiscal year 2016, setting our military on a far more dangerous course.”
Budget experts loathe the sequestration process because it forces across-the-board cuts, akin to cutting spending with a blunt sword rather than a sharp scalpel.
“Smart deficit reduction should replace the non-smart deficit reduction that is in place today,” said Shai Akabas, a policy expert with the think tank Bipartisan Policy Center.