The Bipartisan Budget Dilemma: Defense Increases Conflicts With Other Key Goals
The Administration’s recent announcement that it is adding $18.4 billion to the defense budget has created a dilemma for Democrats and Republicans alike.
Many Democrats support a higher military budget and greater spending for health programs, education and other non-defense programs, all while protecting the Social Security and Medicare surpluses.
Most Republicans, even more enthusiastically, support increasing the military budget, but are wary of being accused of eroding the budget surplus that President Clinton claimed as one of his greatest accomplishments.
For both parties, these goals are in conflict. The $18 billion increase has led to differing calculations of the defense budget increase from fiscal 2001 to 2002. The latest increase is on top of the $15 billion boost requested earlier this year by the Bush Administration and already provided for in the fiscal 2002 Budget Resolution. That means the Administration has really requested a total increase of $33 billion in defense spending for next year.
Moreover, while the Department of Defense uses one figure for overall spending, the defense budget number written into the budget resolution now tops $343 billion, a figure that includes both Pentagon budget authority as well as Department of Energy military programs.
Further, on June 28, Defense Secretary Donald Rumsfeld testified to the House and Senate Armed Services Committee that an additional $18 billion increase beyond the $343 billion will be required in fiscal 2003 just to sustain the proposed fiscal 2002 budget level. That additional $18 billion for fiscal 2003 does not include any new weapons requests which are expected to result from the Pentagon’s Quadrennial Defense Review.
In a classic case of the “law of unintended consequences,” Congressional Republicans, who earlier this year adopted the fiscal 2002 Budget Resolution while they controlled both houses of Congress, included a provision (Section 217 for the Senate chairman) to allow the two Budget Chairmen - Pete Domenici (R-NM) in the Senate and Jim Nussle (R-IA) in the House - on their own to approve or disapprove whatever defense increase the Administration requested after completion of a series of policy reviews.
But Domenici is no longer the Senate Budget Committee chairman. Once the Democrats took control of the Senate in early June, Sen. Kent Conrad (D-ND) became chairman. The Republican Party unwittingly provided Conrad with an enormous club over the level of military spending. As a result, it is no longer clear that all or part of the $18 billion increase will be approved.
Chairman Conrad supports increasing the military budget, but he is also committed to the other Democratic Party goals of domestic spending and protecting the surplus. Earlier this year, he and all but three Senate Democrats supported an amendment to the Budget Resolution offered by Sens. Mary Landrieu (D-LA) and Jean Carnahan (D-MO) to cut the tax cut by $100 billion over 10 years, with the savings to be plowed into military spending.
After losing that and other votes, most Democrats opposed the $1.3 trillion tax cut as excessive, arguing that it will deprive both defense and domestic programs of vital funds.
Conrad is concerned that, while the additional funds for fiscal 2002 may be squeezed in without dipping into the budget surplus (depending on revised economic estimates later this year), the tax cut will erode the surplus in fiscal 2003 and beyond and will leave no room for the Pentagon’s planned level of spending for those years.
In a June 26 letter to President Bush, Conrad raised the dilemma the Congress faces: “I would also like to know how the Administration believes the additional defense spending can be paid for if the economic outlook deteriorates and the non-Social Security, non-Medicare surplus for 2002 is wiped out. Even if the economy does not worsen, the Administration still needs to explain how the outyear effects of a defense increase in 2002 can be accommodated without further raiding the Medicare H.I. Trust Fund in 2003 and 2004 and perhaps causing a raid in subsequent years.”
Conrad is clear that he will question, and possibly oppose, the additional $18 billion increase: “Congress needs to have full information about the long-term spending implications of the Administration’s 2002 defense budget amendment …Congress cannot make an informed decision about 2002 funding for defense without information about how this year’s decisions will affect future defense spending and how that spending fits into a fiscally-constrained long-range budget.” Republican approval of the defense spending increase also is not automatic. On June 27 National Journal reported: “A clearly frustrated House Budget Chairman Jim Nussle today told OMB [Office of Management and Budget] Director Daniels he does not intend to adjust the budget to accommodate the additional $18.4 billion in FY02 defense funding the administration is requesting until the Budget Committee hears directly from Defense Secretary Rumsfeld on the particulars of the request.” Nussle added, “I do not intend to move on any request from the Pentagon until it is reviewed by this committee.”
Other members of Congress also have expressed concern about the implications of such a large increase in spending. National Journal also reported Rep. Mac Collins (R-GA) told Daniels, “I suggest you go back down to the other end of the street and come back to us with $18 billion in rescissions [other program cutbacks] ” to pay for the increase.
Even if Democrats are able to say “I told you so” about the impact of tax cuts, there is no easy way for either party to solve its dilemma. Chairmen Conrad and Nussle now must confront the problem and make the difficult decision on whether or not to permit the defense budget increases, decisions that can be overridden only by extraordinary parliamentary majorities of both houses. Moreover, while both chairmen may find ways to skirt their conflicts this year, the task will become even more difficult next year and beyond.