The Ripon Forum

Volume 49, No. 3

September 2015

The Price of Our Security

By on September 10, 2015

by GORDON GRAY & RACHEL HOFF

Gray & Hoff photoWith victories in the 2014 midterm elections, Republicans took control of both houses of Congress promising to pass the first budget in six years.  And they did—but it wasn’t easy. Republican leaders in the House and Senate faced tough negotiations with the party’s so-called defense hawks, whose top priority is national security, and deficit hawks, whose top priority is fiscal discipline. Reaching a compromise to keep this tenuous coalition in tact was difficult, but it was only the first step in a lengthy budget process. Republicans in Congress still have the appropriations process ahead of them, and passing any spending bills, especially ones they hope the president will sign, takes another layer of negotiation and compromise—with Democrats.

A congressional budget is an important document: it is a statement of priorities. This is an important distinction in understanding what it is not: law. The budget resolution is a compromise between a majority of Representatives and Senators, and it provides a framework that is supposed to establish limits on spending, tax, and debt related matters. The budget resolution passed by the House and Senate reaches balance by 2024. This dramatic alteration in the nation’s fiscal trajectory is achieved through reduced spending. The FY16 congressional budget largely adheres to reduced levels of defense spending called for under the Budget Control Act (BCA) of 2011. The congressional budget passed this year takes non-defense discretionary spending lower still. But the real savings come from reforming entitlement spending. Reaching balance by 2024 was an important aspect of gaining the support of Republican deficit hawks.

Lawmakers must bridge this partisan divide to guarantee the nation’s security—and both parties will need to pay a price.

Republican defense hawks, however, argued that the reduced military budget under the BCA caps had already significantly damaged national security and that increasing military spending was the only way to keep the country safe. To meet this need, the budget resolution includes an increased level of Overseas Contingency Operations (OCO) funding, essentially the place holder in the budget for military operations in Iraq and Afghanistan, to make up the gap between the current spending caps and the president’s funding request. Both sides agreed that this is an imperfect solution, but the OCO plus-up threads the needle for Congressional Republicans who need to balance fiscal discipline and funding defense. Congress has proceeded with this approach for appropriations bills; the House has passed 6 of the 12 funding bills—including defense.

The difficulty of negotiations and compromises to gain majority support among Republicans is only a precursor to the efforts to reach bipartisan agreement with Democrats in Congress and the White House. The Senate functionally requires 60 votes to pass anything, so the 54 Republicans need at least some Democratic support for any appropriations bills. All of the House-passed appropriations bills have met veto threats from the White House. Lawmakers must bridge this partisan divide to guarantee the nation’s security—and both parties will need to pay a price.

Cynics should actually take heart at the likelihood of a bipartisan solution. Congress has reached a compromise to alter the spending caps before, and policymakers don’t have to be all that original. After the pain of the across-the-board sequestration cuts in 2013, the chairs of the House and Senate Budget Committees, Paul Ryan (R-WI) and Patty Murray (D-WA), negotiated a compromise that provided two years of sequester relief while still reducing the deficit overall. Both parties got what they wanted, but neither got everything. Republicans in the House had to acquiesce to greater domestic discretionary spending, while Senate Democrats had to agree to mandatory spending cuts in lieu of long-sought tax increases. This is the architecture of compromise for the next two years: relief for both defense and domestic discretionary spending paid for with mandatory savings.

The highest priority of the federal government should be providing for the common defense. The price of the nation’s security is compromise.

Republicans need to know that trying to increase defense spending without also increasing domestic spending is a non-starter with Democrats. And besides, the president would have to sign off on any new OCO funds, which just isn’t going to happen in this context. Democrats must recognize that the chances of extracting a tax increase from a Republican House and Senate are exactly zero. However, the Ryan-Murray agreement and other bipartisan measures demonstrate that there are politically palatable savings to be found in mandatory entitlement spending. And this should be the source of cuts in the first place, as mandatory spending comprises over 60 percent of the federal budget. Simply extending the mandatory sequester currently in place, as was done once before in Ryan-Murray, for another two years could provide over $30 billion in savings.

The highest priority of the federal government should be providing for the common defense. The price of the nation’s security is compromise. Among political parties and between branches of government, leaders must trade their lesser preferences for this higher imperative.

Gordon Gray (@GordonGrayDC) and Rachel Hoff (@rachelhoff814) both work at the American Action Forum (@AAF) as Director of Fiscal Policy and Director of Defense Analysis, respectively.

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