Fiscal hawks scuttle House Republican budget efforts

House Republicans failed to approve their $3.8 trillion budget at the committee level Wednesday night after negotiations on defense spending failed to break an impasse.

Without a deal, the House Budget Committee packed up for the night, and is now expected to reconvene at 10:30 Thursday morning.

“We’re still working on it and we’ll let you know as soon as we know,” House Budget Committee Chairman Tom Price (R-Ga.) told reporters Thursday following a closed-door meeting in the office of Speaker John Boehner (R-Ohio).

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House Majority Leader Kevin McCarthy (R-Calif.) sought to convince panel members to agree to the budget on Wednesday night, but wasn’t able to satisfy both defense hawks worried about the Pentagon’s spending level and fiscal conservatives who oppose increased spending.

The impasse is just the latest stumble for House Republicans, who have repeatedly struggled to rally around legislation. Most recently, GOP leaders suffered an embarrassing floor defeat on legislation to fund the Department of Homeland Security and attack President Obama’s immigration executive actions.

GOP leaders had hoped that an amendment from Rep. Todd Rokita (R-Ind.) bumping up funding in a war account to $96 billion — and requiring no offsets for that spending — would win over members of the Armed Services Committee and other lawmakers who had demanded that defense spending at least match the level requested by Obama. Price had downplayed the chances this week that such a proposal could pass his committee, aides said, even as leadership was pushing for it.

Price brushed off a question on Thursday that he or Majority Whip Steve Scalise (R-La.) had somehow failed to accurately gauge support for Rokita’s amendment.

Armed Services panel chairman Mac Thornberry (R-Texas) said he was “hopeful the Budget Committee is going to report a budget out and then we’ll move towards how it’s handled on the floor.”

“I think at the end of the day, the national security folks are going to support this budget,” he added. “How it’s all going to happen I’m going to leave that to Chairman Price because it’s his product.”

Turner and many of his allies were unsatisfied by Price’s first move, which was to provide the Pentagon with more flexibility by increasing the war account, known as the overseas contingency operations (OCO), to $90 billion.

But the amendment sparked a revolt by fiscal conservatives, leading to a late-night recess and eventual capitulation for the evening by Price on his proposal.

The Budget panel went into recess late Wednesday night as Price and McCarthy sought to convince their side to agree to the resolution.  

During the delay, House Budget Committee ranking member Chris Van Hollen (D-Md.) tweeted that the Republicans were “in disarray — perhaps they realized the gimmicks and quackery in their budget make a mockery of the process.”

Besides the protests of fiscal conservatives, there may be some resistance among conservatives who are uncertain about the direction of the House GOP leadership. 

The Budget panel includes five Republicans who voted against another term for Boehner as Speaker: Reps. Rod Blum (Iowa), Dave Brat (Va.), Scott Garrett (N.J.), Gary Palmer (Ala.) and Marlin Stutzman (Ind.).

House leadership had tested the waters for the Rokita amendment.

Majority Whip Steve Scalise (R-La.) and his chief deputy, Rep. Patrick McHenry (R-N.C.), started reaching out to GOP Budget Committee members about whether the proposal could work before the Budget markup began, according to aides. 

“If there is a problem at the committee level, the problem could manifest itself on the floor as well,” a Scalise aide said before the Budget Committee markup stalled Wednesday.

 Earlier in the day, lawmakers concerned about the defense offsets said Price had assured them they wouldn’t have to dig up a pay-for the cover the additional cost of increasing the OCO fund. 

That led a number of Armed Services members to say they were hopeful they could support the budget.

But there had been misgivings about using the OCO fund to give the Pentagon more flexibility with its base budget. Some Republicans noted that the OCO fund might not give the Pentagon much flexibility because it was budgeted for only one year.

Earlier in the day, Van Hollen said Sen. John McCain (R-Ariz.) had argued that it wasn’t legitimate budgeting to put the additional money into the OCO account.

The Senate GOP’s budget plan unveiled Wednesday maintains the president’s request for the war fund at $58 billion. It also imposes a 60-vote point of order against any legislation that would call for more than that.

Sen. Lindsey Graham (R-S.C.) said he plans to introduce an amendment during the panel’s Thursday markup that would raise the OCO amount to about $90 billion. 

—Bernie Becker and Rebecca Shabad contributed.

This story was updated at 10:26 a.m.