Budget/Appropriations

Biden pledged to fight for veterans benefits and blamed looming defense cuts on the GOP in an address Saturday.

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The Topline: Congress rushed for the exits on Thursday, heading back to their home states for the month-long August recess with a long to-do list still outstanding for defense issues.

The big elephant in the room, of course, is sequestration, which defense-focused lawmakers have been talking about for months but are still barely closer to a deal averting the cuts than when the supercommittee failed in November.

The issue has certainly gained attention in Washington in recent months, with it becoming part of the presidential elections and races like the Senate contest in Virginia.

But the divide over taxes has proved too large to wade through to get movement on reversing the sequestration cuts, which take effect Jan. 2 and would hit the Pentagon by $55 billion in 2013.

Virginian Republicans lambasted President Obama on Thursday over looming cuts to the Pentagon’s budget and accused the president of using sequestration as leverage to force a tax hike.

“Over 200,000 hardworking men and women in Virginia are at risk of losing their jobs because of this deal,” said former Virginia Gov. and Senate candidate George Allen. “These are jobs that are feeding families, they are providing customers for small businesses. They really form the building blocks of our economy.”

Lt. Gov. Bill Bolling (R-Va.) said Obama’s attempts to win over voters in Virginia, a key battleground state, are at odds with his record.  

“He obviously understands that Virginia’s a key battleground state. The irony, of course, is that for the past four years, the president’s policies have almost constituted a declaration of war on Virginia’s economy. ... His record is a record of failed leadership.” 

Democrats on the Senate Appropriations Committee on Wednesday blocked a GOP-backed amendment requiring U.S. defense firms to begin issuing layoff notices tied to looming budget cuts under sequestration. 

The hearing had the air of a partisan fistfight, with lawmakers and the budget director frequently talking over each other.

The heads of the House Armed Services Committee were not pleased with the tone of Wednesday’s hearing with President Obama’s budget chief, which devolved numerous times into a near-shouting match.

The hearing with acting Office of Management and Budget Director Jeffrey Zients was a blow to the committee’s bipartisan reputation, which its leaders tout as one of the best in Congress.

Chairman Buck McKeon (R-Calif.) said at the conclusion of the hearing that he was “uncomfortable” with the direction it took, adding that he “wished it hadn’t happened.”

Navy biofuels spending might be preserved in a $604.5 billion defense appropriations bill scheduled for a Thursday markup, according to a Reuters report.

The Senate Committee on Appropriations Defense subcommittee on Tuesday approved alternative fuel spending that includes money for a hotly contested Navy biofuels program. The full Senate Appropriations Committee will now determine whether that alternative fuel proposal survives at the Thursday markup.

Senate Appropriations Defense subcommittee Chairman Daniel Inouye (D-Hawaii) told Reuters, “I think we do have funding” for the Navy biofuels program, though he would not reveal the specific dollar amount requested in the bill passed Tuesday.

The Armed Services Committee already has effectively blocked the Navy biofuels program on the grounds of cost.

Sequestration would force the Pentagon to scale back new defense strategy, a top Defense official told House lawmakers Wednesday. 

“The president doesn’t want people reading about pink slips in the weeks before his election," Senate Minority Leader McConnell said.

The Topline: Acting Office of Management and Budget Director Jeffrey Zients said Tuesday that the Obama administration would exempt military personnel accounts from sequestration, a move that will help set the stage for Wednesday’s showdown with the House Armed Services Committee.

Zients issued two memos on sequestration Tuesday before he’s set to join Deputy Defense Secretary Ash Carter to testify before the committee Wednesday morning. One said that military personnel costs were exempted from sequester, a move that Obama was expected to make, and the other said that OMB officials would begin consulting with agencies about the sequester.

House Armed Services Committee Chairman Buck McKeon (R-Calif.) and other Republicans on the committee are unlikely to be impressed, however, as they have hammered the Pentagon and administration for not releasing details or planning for the $500 billion, 10-year defense cuts that take effect Jan. 2.

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