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House Republicans Set to Break Budget Cap, Senate Democrats to Follow

Congressional Republicans and Democrats are pushing forward on separate legislative tracks for appropriations measures over coming days that break with current budget law to advance what will amount to little more than negotiating tactics for a larger budget deal.

House appropriators this week will mark up a defense spending bill that will break the cap set for discretionary defense spending and subject the Pentagon to new automatic budget cuts unless Republicans reach an agreement with Democrats to undo the sequester.

The House will be the first to move the stark divisions on spending to the floor, with GOP leadership intent on passing the fiscal 2014 Defense bill through the chamber this month. With that vote, the House Republican majority will reaffirm a plan to break the $498 billion cap on security spending set in the 2011 Budget Control Act (PL 112-25). This is a broad category of spending that includes about $18 billion for the Energy Department’s atomic-weapons program and $2 billion for Homeland Security expenses.

House Republicans so far are engaged in something of a legislative charade with Democrats. Instead of directing how the Pentagon might operate under the current cap, they are proceeding with a far more generous plan and acting as if this could be enacted without GOP concessions on taxes or increasing the overall fiscal 2014 spending cap.

Democrats are undertaking a similar exercise in the Senate, where appropriators next week will put forward a spending plan that would break the discretionary spending caps set under the 2011 deficit reduction law (PL 112-25) for defense and domestic programs.

The House Defense bill would provide $512.5 billion to the Defense Department, enough to break the $498 billion cap on its own. That does not even count the additional $10 billion for military construction passed in a separate measure (HR 2216), which the House passed June 4.

Democrats would have to agree to not only the initial spending measure for those spending levels to remain, but also to change the budget-control law to undo the sequester on security spending. “I can’t imagine that Democrats could support something like that,” said former Senate Majority Leader Tom Daschle, a Democrat from South Dakota.

Unless a new law is passed to revise the terms of the Budget Control Act, the Office of Management and Budget in January 2014 would have to to make the cuts needed to bring security spending down to $498 billion for the 2014 fiscal year.

Democrats continue to call on Republicans to enter a House-Senate conference on a fiscal 2014 budget resolution, a step that they say could resolve the spending stalemate. House Republicans had used their fiscal 2014 budget resolution (H Con Res 25) to first signal that they couldn’t stick with the security spending cap set dictated by current law, acting as if sequester didn’t apply to it and setting this level at $552 billion.

Democrats also are breaking with budget law in these fiscal 2014 spending plans, and some view recent good economic news as strengthening their hand in this debate. Although current law caps fiscal 2014 discretionary spending at roughly $967 billion, the White House considers this inadequate and has issued a blanket veto threat for spending bills, urging a conference negotiation at which Democrats will push to end sequester and restore the cap to $1.058 trillion.

Next week, Senate Appropriations Chairwoman Barbara A. Mikulski, D-Md., will unveil her plan for allocating the $1.058 trillion that would be available for fiscal 2014 discretionary spending if Congress repealed or replaced the sequester. Her committee will mark up what are called 302(b)s for each of its 12 bills when it takes up its first measure, Military Construction-Veterans Affairs.

The panel will write fiscal 2014 spending bills designed to show what Americans would get from the government if a larger budget deal is struck and the sequester’s very deep bite into the federal government’s operating expenses disappears.

But any plan to bridge the enormous gap between the chambers will come only as part of a larger deal, probably tied to the next increase in the debt limit. That means it’s likely the government will run once again on a continuing resolution, or several of them, for some months into the next budget year.

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