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Senate Democrats’ Budget Would Halve $500B DoD Sequestration Cuts

Mar. 13, 2013 - 05:41PM   |  
By JOHN T. BENNETT   |   Comments
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WASHINGTON — A U.S. Senate Democratic budget blueprint would get rid of about half the Pentagon budget cuts mandated under sequestration, but congressional Republicans have bristled at the way it would do so.

The budget, which could be approved by the Budget Committee this week and hit the floor next week, calls for $975 billion in federal spending cuts and an equal amount of new revenues achieved by closing corporate loopholes.

Senate Democrats are calling for $240 billion in Pentagon spending cuts to be implemented over the next decade. Under sequestration, the cuts must be achieved by trimming about 9 percent from all non-exempt DoD accounts, while the bill endorses a “responsible path that is nothing like the across-the-board cuts from sequestration.”

“This budget fully replaces the cuts from sequestration that threaten 750,000 jobs this year alone, economic growth for years to come, as well as our national security and the programs families and communities depend on,” Senate Budget Committee Chairwoman Patty Murray, D-Wash., said at the start of a Wednesday hearing on the bill.

“It replaces these automatic cuts in a fair, responsible way,” she said.

“Half of the new deficit reduction to replace sequestration comes from responsible spending cuts across the federal budget, and half comes from new savings found through closing loopholes and cutting wasteful spending in the tax code for the wealthiest Americans and biggest corporations.”

Senior Republicans, however, say a closed loophole is a tax hike under another name — and a poison pill for a still-sluggish economy. Some top GOP members say any revenues from loophole closures should be used to lower other tax rates, not pay down the deficit.

For the Pentagon and defense sector, Murray’s plan would provide ample relief from the much-maligned, across-the-board sequestration cuts.

“Our budget saves $240 billion by carefully and responsibly reducing defense spending while giving the Pentagon enough time to plan and align the reductions to time with the drawdown of troops from overseas,” Murray said.

“This will involve some tough decisions, but it is a responsible path that is nothing like the across-the-board cuts from sequestration that would be devastating to defense programs and jobs if they weren’t replaced,” she said.

The Senate Democrats’ plan follows the one unveiled Tuesday by House Budget Committee Chairman Paul Ryan, R-Wis. The Ryan plan would keep most sequestration funding levels in place, but proposes replacing the automatic mechanism with “more sensible cuts to meet those targets,” a House Budget Committee aide said.

And, in a shift for House Republicans, the former GOP vice presidential candidate proposes only modest increases in military spending over the next decade.

“Our defense spending level in here reflects exactly what the president’s Joint Chiefs and [defense] secretary said are the minimum levels necessary to fund the missions of the Pentagon,” Ryan said during a Tuesday morning briefing on Capitol Hill.

“We think this is our first priority in the federal government: national defense,” Ryan told reporters. “And so we’re funding it at the levels the Joint Chiefs and the last secretary said are necessary to maintain national security for the country.”

Where Murray and Senate Democrats want to replace the sequestration cuts, Ryan made clear his spending plan makes no attempt to get rid of the spending caps created under the 2011 Budget Control Act. In fact, the GOP plan proposes extending those caps by two years.

“The law is the law,” Ryan told reporters. “We’re not going to change that.”

The House GOP budget plan’s shift to “minimum levels” of Defense Department spending is part of a push by the Republican caucus to balance the federal budget and substantially reduce the nearly $17 trillion federal deficit. Ryan’s GOP plan proposes doing just that in 10 years, primarily by slashing $4.6 trillion from planned federal spending.

“We owe the country a balanced budget,” Ryan said.

Washington Democrats do not share the GOP’s objective of balancing the budget and wiping out the deficit. They talk of “manageable debt levels” that can be accomplished with one more big fiscal deal. But that will require more federal spending reductions, including defense cuts, Democrats acknowledge.

“Congress and the administration have worked together to reduce the deficit by $2.4 trillion, with $1.8 trillion coming from spending cuts and $600 billion from allowing tax rates to rise on the wealthiest Americans in the year-end deal,” Murray said.

She said her bill would “[take] us the rest of the way,” calling for “a total of $4.25 trillion in deficit reduction.”

Even before the afternoon unveiling of the Democrats’ plan, senior Senate Republicans panned the legislation.

Senate Minority Leader Mitch McConnell, R-Ky., said the bill would be a boon only for “late-night comedians,” adding it calls for “$1 trillion … in new taxes, including on the middle class.”

“The question is from where that new revenue will come,” McConnell said, highlighting that congressional Republicans oppose any more tax hikes. They say President Obama and congressional Democrats already got their desired tax increases with the January “fiscal cliff” deal.

The Ryan and Murray plans show — once again — that for the $500 billion in defense sequestration cuts to be replaced with lesser reductions that give Pentagon officials greater discretion to implement, Democrats and Republicans still must find enough common ground on taxes and domestic entitlement program reforms.

To that end, several House Republicans emerged from a midday closed-door meeting with Obama and told reporters they heard “nothing new” from the president on taxes, entitlement reform and their goal of a balanced budget through deep cuts — including to defense.

“Again, if the president wants to let our unwillingness to raise taxes get in the way, then we’re not going to be able to set differences aside and focus on what we do agree on,” said House Majority Whip Eric Cantor, R-Va.

And House Armed Services Committee Chairman Howard “Buck” McKeon, R-Calif., told reporters Obama and House Republicans did not discuss the Pentagon budget at all.

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