President Joe Biden and his Democratic allies on Capitol Hill are in for another protracted standoff over fiscal priorities, based on Republicans’ reaction to Biden’s election year budget released Monday.
Even before the House Budget Committee opened the fiscal 2023 cycle hearings Tuesday, the Senate’s top GOP appropriator was throwing cold water on Biden’s proposed 4 percent increase for Pentagon and other defense-related accounts.
Sen. Richard C. Shelby of Alabama, the top Republican on the Senate Appropriations Committee, said Monday the budget “woefully” underfunds defense, considering Russia’s invasion of Ukraine. “That budget will go nowhere as is,” he said.
Biden proposed boosting the military budget to $773 billion in fiscal 2023, a roughly 3 percent increase after taking into account supplemental appropriations for the Pentagon’s efforts this fiscal year to aid the Ukrainian resistance and other European allies. Considering the effects of unusually high inflation, Republicans say that’s not nearly steep enough.
Including nuclear energy programs and other defense-related activities, the overall national security budget would hit $813 billion next year under Biden’s request, a $31 billion increase over this year without supplemental Ukraine aid factored in. Domestic and foreign aid programs, by contrast, would receive a nearly $100 billion increase, or almost 14 percent, to $829 billion in nonemergency funds.
While Republicans have long pushed for “parity” in discretionary spending increases, Shelby said he may push for a larger boost to defense spending than nondefense for fiscal 2023. “We might need some plus-up in defense, because of the world’s situation,” he said.
Senate Appropriations Chairman Patrick J. Leahy, D-Vt., said Tuesday that the “four corners” of the Appropriations Committee leadership in both chambers have had “quiet meetings” but probably will not have a formal meeting this week due to the high level of congressional activity. Leahy said he’s hoping appropriators can reach a deal on discretionary toplines “sometime soon.”
In the interim, Leahy has told Senate Appropriations subcommittee chairs to engage with their GOP counterparts and begin planning hearings with department and agency heads, according to Delaware Sen. Chris Coons, top Democrat on the State-Foreign Operations Appropriations Subcommittee.
“The chairman and ranking member of appropriations or vice chairman have said they want us to proceed with this year’s appropriations process quickly, and be in a position to conclude it this year,” Coons said. “The only way to do that is just start with” an overall appropriations ceiling that can get parceled out to subcommittees.
Last year, subcommittees were not able to do meaningful oversight hearings and markups because the subcommittees did not receive the toplines for the 12 annual spending bills until the last minute, Coons said.
“Appropriating funding every year is one of the most foundational responsibilities of Congress. We should be doing a better job of it,” he said.
‘A dangerous time’
The appropriations process typically starts in the House, where Office of Management and Budget Director Shalanda D. Young got an earful from Budget Committee Republicans on Tuesday who echoed Shelby’s critique of Biden’s defense spending plan.
Rep. Trent Kelly, R-Miss., said the defense budget request does not reflect the 5 percent increase above inflation that GOP members of the House and Senate Armed Services Committees have called for. “This is a dangerous time, and we need to continue to raise that,” he said.
The defense budget also faced criticism from Biden’s left. Rep. Pramila Jayapal, D-Wash., who leads the Congressional Progressive Caucus, said she is deeply concerned with the defense spending increase as the Pentagon has never passed an independent financial audit.
“I would argue there are more efficient ways to spend the money we have,” she said. “It doesn’t mean that we can’t have solid and secure national security, if we actually cut out waste, fraud and abuse and focus on the technologies that are going to give us the biggest bang for the buck.”
Inflation is hitting U.S. households’ wallets as well as the defense budget, which comes at an inopportune time for Democrats with elections in seven months. House Budget Republicans sought to use the Biden budget to press their perceived political advantage, hitting the administration’s spending policies for stoking price increases by flooding the economy with stimulus.
“Spending $73 trillion just seems like it’s only going to fuel the inflation fire,” House Budget ranking member Jason Smith, R-Mo., said. “I’d like to know how you’re going to help the people of southern Missouri to be able to afford food on the table, clothes on their backs and gasoline in their cars.”
Smith was referring to the estimated $72.7 trillion in total federal spending over the next decade under Biden’s budget, including interest payments on the debt. That’s about $1.4 trillion more than “baseline” funding, or projections of spending that would occur without enacting Biden’s proposals.
Young said Biden is concerned about inflation, and the budget provides investments in port infrastructure and encourages competition among corporations to lower consumer prices.
“We absolutely know we have to work on this, but one thing we need to do is a balanced approach,” she said. “We’ve seen wage growth. We need to make sure as we tackle inflation, we can keep these gains in wage growth and also economic growth. So there is a balancing act here.”
Many Democrats seemed pleased with the balance Biden proposed.
Rep. Steven Horsford of Nevada is a vulnerable Democrat who commended the administration’s budget, including efforts “to finally make the wealthiest in this country pay their fair share of taxes.” He’s on Republicans’ target list to knock off in November, though Horsford’s seat is rated Likely Democratic by Inside Elections with Nathan L. Gonzales.
And Jayapal also credited the budget for increasing taxes on the wealthiest Americans, restricting stock buybacks and investments in immigration judges and legal counsel.
Enacting any further expansions of government benefits, or tax increases to pay for them, would probably require Democrats to use the budget reconciliation process, enabling them to circumvent a Senate filibuster.
‘Build Back’ when?
But neither House Budget Chair John Yarmuth, D-Ky., or his Senate counterpart, Bernie Sanders, I-Vt., guaranteed they’d take action on a new budget resolution this year, which is required to unlock the reconciliation process.
And Democrats are still struggling to pass anything resembling their stalled “Build Back Better” climate change mitigation and safety net spending package under the prior budget resolution, although some preliminary talks have begun after a monthslong impasse.
“It’s a high priority on our caucus to try and move forward on reconciliation,” Schumer said. “It’s going to be hard. We know that. We’ll try to get as much done as we can that gets 50 votes. That’s where we’re at. There’s a ways to go.”
Manchin told reporters Monday that he personally has no deadline for coming to an agreement, although others have talked about trying to reach a deal before the July 4 recess to give both chambers time to process it before all momentum is lost in the height of midterm election season.
But Manchin made no promises. “I’m not saying anything is going to be done,” he said.
Despite offering some new tax proposals, Biden’s budget was silent on what a smaller reconciliation bill should look like, instead using deficit-neutral reserve funds to leave space for Congress to come to a fully paid for spending agreement.
Young called Democratic senators to give them a heads up that the budget wouldn’t address any specific proposals for the reconciliation package, according to Sen. Tim Kaine, D-Va., who said Young called him Friday night.
Biden “knows we’re having those discussions, so he’s not gonna force it to A or B when we’re having the discussions,” Kaine said.
David Lerman contributed to this report.