WASHINGTON — The White House and congressional leadership are trying to reach a two-year spending deal that would also extend the government's borrowing authority past the 2016 presidential election, news outlets are reporting.
On the Senate floor today, Senate Majority Leader Mitch McConnell, R-Kentucky., held a meeting to explain the contours of the deal to his caucus Monday night., said "fiscal negotiations are ongoing."
"As details come in, and especially if an agreement is reached, I intend to consult and discuss the details with colleagues," he said.
Under the potential budget deal, it appears as though GOP defense hawks would get $5 billion less than the the amount they sought for defense, according to a Senate aide. The potential deal prescribes a $33 billion plus-up for defense in fiscal 2016, with $25 billion of this in the base budget and $8 billion in the wartime Ooverseas Ccontingency Ooperations (OCO) account, instead of a $38 billion plus-up through OCO.
Citing officials briefed on the negotiations, the emerging pact would increase spending by $80 billion, not including OCO, over two years above the previously agreed-upon budget caps, the New York Times reported. This The increase would be funded by offsets to include cuts to Medicare and Social Security disability benefits. The deal would also extend the debt ceiling to until 2017.
Senate Minority Leader Harry Reid, D-Nev.ada,said earlier in the day that it was "imperative that we avoid a manufactured crisis that threatens our economy and jobs."
"I would hope that we'd come to a resolution, Democrats and Republicans, that is good for our country and the economy," Reid said. "It is past time that we do away with the harmful, draconian sequester cuts."
Speaking on the Senate floor, Senate Minority Leader Harry Reid, D- Nevada, confirmed the talks were ongoing, saying said earlier in the day that it was "imperative that we avoid a manufactured crisis that threatens our economy and jobs."
"I would hope that we'd come to a resolution, Democrats and Republicans, that is good for our country and the economy," Reid said. "It is past time that we do away with the harmful, draconian sequester cuts."
The negotiations reportedly seek to agree on top-line spending numbers for fiscal 2016 and guide the 2017 appropriations process, Bloomberg reported Monday. Spending caps for domestic discretionary spending for defense and non-defense programs would reportedly be raised, and the text of the agreement may be may be filed as early as Monday evening.
Earlier in the day, White House spokesman Josh Earnest acknowledged talks were proceeding told reporters that no final deal had been sealed.
"We have worked assiduously to protect the privacy and confidentiality of those discussions," Earnest said. "As I stand here today, not everything has been agreed to. That means, at this point, that nothing has been agreed to."
Two key deadlines are creating pressure to get a deal done: The Treasury Department has said the debt limit must be raised by Nov. 3, and the stop-gap spending measure that keeps the federal government open expires on Dec. 11.
Defense watchers have worried that without a spending deal that eases the Budget Control Act spending caps, there would be no deal until after the November 2016 elections. Some have predicted one or a series of long-term continuing resolutions, deemed a nightmare scenario by the Pentagon and defense industry — one averted if reports of a deal are true.
"This is obviously a positive development for defense, but it's hardly a done deal," Todd Harrison, a defense budget expert with the Center for Strategic and International Studies, said Monday. "The key is whether can they get this though the divided Republican caucus in the House."
Last week, President Barack Obama vetoed the 2016 National Defense Authorization Act over what he called a Republican "gimmick" to fund defense — the use of a wartime account known as Overseas Contingency Operations (OCO) to fund base budget requirements. Though roundly criticized by Republicans, the move was a gambit to pressure Republicans into a larger budget deal, one which matches any defense increase on the non-defense side.
On Monday, the Capital Alpha Partners investor newsletter cited unconfirmed reports that the deal provides, among other things, at least $70 billion in sequester relief, with an incremental $20 billion annually to the Pentagon base budget — lower than the controversial $38 billion plus-up through OCO.
If $20 billion is the increase, it is less than GOP defense hawks said they would accept. Roughly 100 House Republicans, led by Rep. Mike Turner, R-Ohio, signed a letter earlier this month calling on their leadership to go no lower, in negotiations, than the $561 billion for defense requested by President Barack Obama and the Pentagon.
That letter was, "a shot across the bow" from GOP defense hawks to GOP fiscal hawks associated with the Freedom Caucus — credited with ousting Ohio Republican House Speaker John Boehner — and a signal to GOP leadership that defense hawks control a large voting bloc, Harrison said. Rep. Paul Ryan, R-Wis.consin, is the frontrunner to succeed Boehner and take over the warring GOP caucus.
"The letter sends a message that there are a larger number of defense hawks than fiscal hawks, and, really, it's up to the leadership and Ryan, if he gets the nod, to say we're going to press forward with something not everyone supports," Harrison said.
Last month, five powerful military trade associations signed a letter urging congressional leadership to avoid a government shutdown or an extended continuing resolution, and instead pass a bipartisan, multiyear deal, of the sort crafted in 2013 by Ryan and Sen. Patty Murray, D-Wash.,ington which temporarily lifted spending caps for two years.
Email: jgould@defensenews.com
Twitter: @reporterjoe
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.
