GOP grapples over scope of budget deal

GOP grapples over scope of budget deal

Senate Republicans are debating how far to go in budget talks with President Obama and Democratic leaders that would set spending levels for the federal government and possibly raise the debt ceiling.

The big question is how far Senate Majority Leader Mitch McConnellMitch McConnellConservative groups press Senate on ObamaCare repeal Week ahead: Trump budget coming Tuesday | CBO to unveil health bill score | House hearing on border tax Week ahead: EPA braces for Trump budget MORE (R-Ky.) and Speaker John BoehnerJohn BoehnerBoehner called Trump about signing government funding bill Ex-GOP rep jests he thought reporter's accidental text was a drunk text from Boehner Gowdy front-runner to be next Oversight chairman MORE (R-Ohio) will go in wiping away the automatic spending cuts to defense and nondefense programs, known as sequestration.

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Senate Armed Services Committee Chairman John McCainJohn McCainPutin aide slams McCain: Thank God he doesn't shape foreign policy Juan Williams: Trump morphs into Nixon Week ahead: Trump defense budget under scrutiny MORE (R-Ariz.) wants to raise defense spending by $38 billion a year over the caps, which would total $76 billion in additional spending over the two-year span of a deal envisaged by McConnell. McCain has the backing of other defense hawks frustrated by limits on defense spending.

Obama and Democrats say any increases in defense should be matched dollar for dollar with increases to nondefense programs. Meeting that demand could mean a $152 billion increase in discretionary spending over the budget caps for fiscal 2016 and 2017.

Finding a way to pay for a spending increase that large could be difficult, and Republicans don’t want to see a deal that would bust the nation’s budget.

McConnell is telling GOP colleagues that he supports significant reforms to entitlement programs such as Social Security and Medicare, according to Senate sources. Such reforms could pay for increased spending. 

But Democrats would put up significant opposition, and McConnell lowered expectations for his colleagues Wednesday, warning in a private meeting that Senate Democratic Leader Harry ReidHarry ReidThis week: Congress awaits Comey testimony Will Republicans grow a spine and restore democracy? Racial representation: A solution to inequality in the People’s House MORE (Nev.) and House Democratic Leader Nancy Pelosi (Calif.) “are muscling in” on the negotiations, according to one lawmaker.

Another question is whether a year-end package should include a multiyear transportation bill and corporate tax reform, two items McConnell has said he wants to keep separate from the budget summit. Reauthorizing the Export-Import Bank could also be rolled into the talks.

Finally, there’s the debt ceiling. Congress is likely to have to take action to raise the government’s borrowing limit this fall, and it would be natural to do so as part of a bigger spending deal.

Sen. John ThuneJohn ThuneFive roadblocks for Trump’s T infrastructure plan Overnight Tech: FCC begins rolling back net neutrality | Sinclair deal puts heat on regulators | China blames US for 'Wanna Cry' attack Overnight Regulation: FCC votes to begin net neutrality rollback MORE (S.D.), the third-ranking member of the Senate GOP leadership, favors a narrower negotiation that would produce a smaller package. One rationale for this approach is that it’s better to wait to see whether a Republican wins the presidency in 2016, which would give the GOP more leverage.

“I think we’d all like to see a smaller end-of-the-year deal. I think it’s always better if you’re conservative,” Thune said. “These negotiations tend to favor people who want to expand and grow government, and the Democrats are trying to use leverage.” 

Republicans want to pass a year-end omnibus spending package because it would include an array of policy riders they favor.

But some GOP senators argue that the riders may not be worth it if the price tag for passing them exceeds $100 billion.

“We like the riders, but they may not be worth the cost,” said a Republican senator who suggested passing a yearlong measure that would essentially freeze spending levels as a backup plan.

Congressional Democrats want a year-end budget package that raises budget caps imposed since 2011, includes a multiyear extension of the Highway Trust Fund, raises the debt ceiling and reauthorizes the Ex-Im Bank.

“McConnell’s in a tough position, because all the things on the table are Democratic issues, and the key one is getting rid of the sequester,” a senior Democratic aide said.

McCain has already warned McConnell he will not support another stopgap funding measure after the short-term resolution passed by Congress Wednesday expires on Dec. 11.

“You’ve got to restore this money, and I’ve told Sen. McConnell this is the last time I’m voting for the [continuing resolution]. I will do anything to stop further sequestration,” McCain said.

Republicans on the Appropriations Committee are also keen to strike a deal that would allow the spending bills they’ve worked on all year to become law.

“Nearly as responsible as a government shutdown would be to do nothing more than to pass a continuing resolution for the next year,” said Sen. Lamar AlexanderLamar AlexanderSenate GOP short on ideas for stabilizing ObamaCare markets GOP senators push Trump for DOE research funding Key chairman open to delaying repeal of ObamaCare mandate MORE (R-Tenn.). “A solution for me does not include a continuing resolution, because that’s just lazy, irresponsible, wasteful government.”

Alexander said many Republicans now acknowledge that it will be necessary to bust the spending caps set by the 2011 Budget Control Act. 

“Most of us on the Republican side
are going to insist that there be more funding for national defense and expect that there’ll probably therefore have to be more spending for nondefense,” he added.