The art of the defense budget deal

Since the beginning of the Budget Control Act and the circular firing squad that is sequestration, we’ve been confronted by a kind of prisoner’s dilemma: Democrats and Republicans were each in favor of increasing the defense budget, but the only way they could get there was to cooperate. In today’s Washington, that is increasingly rare. 

In other words, despite the optimistic talk of defense increases, the path of least resistance still results in little or no increase. In order for the military to get the increases it has been promised, someone needs to make a deal. 

{mosads}Any increase in funding is subject to two seemingly inconsistent requirements. Republican budget hawks seek non-defense reductions for any defense increase (to stay budget neutral), and Senate Democrats have demanded non-defense increases of the same size as any defense increase (also called “parity”).

Even with a Republican majority in both the House and the Senate and a Republican in the White House, 60 votes are needed to change the budget caps or to proceed on appropriations bills, so the Senate Democrats have leverage their House colleagues do not. None of the posturing to date voids this fundamental impasse.

Changing the resident in the White House doesn’t change it either. It’s easy to forget, but President Obama continually requested defense budgets that were significantly higher than the Budget Control Act caps, and his budget plan projected a $33 billion increase for 2018. He continually requested deals — and sometimes got them — but he didn’t get all of the defense funding he requested.

President Trump has announced he will request a $54 billion increase for fiscal 2018, $21 billion more than Obama had in his budget plan, and he is expected to release a budget amendment for 2017 that will ask for approximately $20 billion more for 2017. Neither request changes the negotiating positions or the leverage in the House and Senate. He can propose eliminating the caps for the Department of Defense or ask for a big boost to emergency funding, but that doesn’t break the stalemate.

Historically, Congress has been very good at coming up with a deal at the last minute, and the federal government’s funding (via a stopgap continuing resolution passed in December) runs out at the end of April, so the last minute is approaching. Unfortunately, the path of least resistance points to a full-year continuing resolution — funding the government at last years’ levels.

The revised budget caps for 2016 and 2017 provide next to no increase for 2017, so using 2016 topline numbers isn’t the problem. The problem is that a continuing resolution puts the funding in the wrong appropriations accounts, creating unusable surpluses in some, and billions of dollars of unworkable shortfalls in others. It would be a significant blow to the Defense Department. 

The next most likely scenario is to pass an appropriations measure that looks like the National Defense Authorization Act, the defense policy bill that passed late last year.

That bill authorized a $9 billion increase for defense, $6 billion of which was requested in the fall by the Obama administration for increased operations in Iraq and Afghanistan. The bill passed 277-147 in the House and 85-13 in the Senate and was signed by Barack Obama.

In this case, the money will be appropriated where it is actually needed, there will be no barriers to new starts or production increases, and Congress will get a say in that it will be able to make adjustments to the original request — within the limited total dollar value. This doesn’t get the Defense Department the increases it wants, or the increases that the House Armed Services and Appropriations Committee sought last year, but it is far, far better than a full-year continuing resolution.

If Senate Democrats are concerned about giving up their leverage, they are unlikely to allow the Defense Appropriations Act to be considered unless it is packaged with the remaining appropriations measures. Omnibus Appropriations bills have been common in Congress in recent years. Indeed, most appropriations have been passed under omnibus measures for the last six years.

But between the seemingly irreconcilable positions, there is hope for a deal. President Trump has not hewed precisely to party-line positions and may be sympathetic to non-defense spending increases on infrastructure or border security. He may propose tariffs completely consistent with his previous positions that could provide revenue to offset the increases. He has an opportunity to insert new ideas into this debate that could break the stalemate, demonstrate his deal-making skills, and provide the Defense Department with the additional funding he promised.

John Conger, a senior adviser at the Center for Strategic and International Studies, is the former principal deputy undersecretary of Defense (comptroller).

The views of contributors are their own and are not the views of The Hill.