WASHINGTON -- While media attention focuses on the cuts to government spending demanded by House Republicans and broadly accepted by Democrats, the Pentagon is poised to reap billions more in federal funds, according to sources close to the discussions. The confines of the budget negotiations established by the two parties results in a system where every extra dollar going to military spending ends up being offset by a dollar reduction in spending on domestic social programs.

Last week, Senate Democrats came to the table with $10 billion in proposed cuts to the military budget but, a House GOP aide said, the offer was immediately rejected. Democratic sources confirmed that the party had proposed defense spending reductions but disputed the amount.

Democrats and Republicans are now moving toward an agreement that would increase defense spending. But Democratic sources close to the talks said the Democrats' spending recommendation remains roughly $2 billion shy of that of their Republican counterparts. A spokesman for the Senate spending panel declined to comment, citing ongoing talks. A spokesman for Senate Democratic leadership did not respond to requests for comment.

During an Appropriations Committee meeting last weekend, the Obama administration and Senate Democrats proposed funding the Pentagon at $513 billion. That spending level is the same as Senate Democrats’ December proposal, but it also offers a $5 billion boost to the Pentagon's current budget.

Still, it's not enough to placate Republicans, who have demanded funding be set at $514 billion, even though, an administration official says, the Department of Defense has "signed off on" the $513 billion level.

Sources say the two sides have also failed to come to an agreement on money designated for military construction. While Democrats are pushing for a $73.1 billion construction budget, Republicans have countered with $73.94 billion, a difference of $840 million.

Combined, the differences between the two parties' plans are trivial in the face of the $14 trillion federal debt. But in the context of discussions over how to keep the federal government funded through the end of September -- and avert a shutdown in the process -- aides say the disagreement is proving critical.

“If you plus up those areas together,” one high-ranking Democratic official said, “what happens is you have to take it from somewhere else. And where are you taking it from? From Labor, Education, the NIH [National Institutes of Health], health care, the social safety net. That’s how they are trying to jam us.”

Republicans say that Democrats knew from the beginning that proposed cuts to defense spending would be rejected. A GOP aide said the military spending negotiations had been complicated by the Pentagon's recent indication that it would need more than it initially requested -- an account that the Obama administration disputes.

Either way, the late-stage negotiations over a budget resolution hit a snag Monday, in part because of domestic spending cuts necessitated by the hike in military spending. According to Politico’s David Rogers, several chief areas of dispute remain. Among them are $3 billion in funding for the establishment of new nonprofit health cooperatives, a component of the president’s health care reform package that is cherished by Senate Budget Committee Chairman Kent Conrad (D-N.D.). Negotiators are also discussing roughly $10 billion in cuts to the Labor, Education and Health and Human Services departments.