Defense, appropriators win in budget deal

House and Senate budget negotiators have reached a deal that will make defense hawks happy, fiscal conservatives grumble and keep appropriators satisfied — for now.

The two chambers are in the process of inking an agreement that freezes domestic spending, while authorizing a big boost for the Pentagon and granting appropriators the flexibility to spend an extra $20 billion on domestic programs, POLITICO has learned. The accord would keep spending for things like education, transportation and housing below caps set in a 2011 deficit reduction law.


Still, GOP lawmakers must be briefed on the specifics and final legislative text is being drafted, so negotiators can still make changes before the deal is officially released early next week, sources following the talks said.

But the broad outlines of the deal give defense hawks like Senate Armed Services Chairman John McCain (R-Ariz.) and Rep. Mac Thornberry (R-Texas) reason to cheer: The budget would give the Pentagon the $38 billion increase McCain and others have pushed for, without being offset, and the money would circumvent budget caps because it’s funneled through a war-funding account.

Perhaps more importantly, Senate negotiators agreed to drop a point-of-order against the extra money, which would have required 60 votes to overcome in the Senate. The point of order was originally inserted to please fiscal conservatives like Sen. Pat Toomey (R-Penn.).

When Sens. Kelly Ayotte (R-N.H.) and Lindsey Graham (R-S.C.), tried to strike the point-of-order during a Senate budget markup last month, they were rebuffed. Budget conference negotiators likely jettisoned the point of order in part because McCain threatened to withdraw support for the budget if it was not eliminated.

The extra defense money still has some hurdles to overcome. President Barack Obama and congressional Democrats have said they will only give the Pentagon the increase if non-defense domestic programs also get a boost.

The House and Senate are expected to clear the budget deal next week after conferees sign off on the deal.

Appropriators in both chambers will also be pleased to see negotiators dropped, at least for now, a provision backed by Senate Budget Chairman Mike Enzi (R-Wyo.) and Sen. Bob Corker (R-Tenn.) that would bar lawmakers from using a budget maneuver to wring extra savings out of mandatory programs — although many call it flat-out budget gimmick.

Known by its acronym “CHIMPS,” the maneuver lets appropriators delay some mandatory spending for the upcoming year and use the “savings” to spend more on discretionary programs in the same year. But the money is not really “saved” — it still has to be spent down the road in future years. It just makes the current year look good on paper.

House Appropriations Chairman Harold Rogers (R-Ky.) said last Thursday eliminating the “CHIMPS” provision would force him to find $20 billion worth of additional savings out of this year’s spending bills, many of which have already been trimmed substantially, at least according to appropriators. They had been counting on the mandatory savings due to the tight caps.

Sources said the budget would focus on repealing Obamacare through the fast-track budgeting procedure known as reconciliation, which allows the bill to clear the Senate with just 51 votes. But it was unclear if it would specifically require only a repeal of the president’s signature health care law. House negotiators were pushing to keep their options open when it comes to how Republicans will use reconciliation.

Those hoping for a replay of the 2013 budget accord struck by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), which loosened some of the spending restrictions in the 2011 budget law, should welcome a provision expected in this year’s budget expressing a non-binding sense of Congress that the caps should be lifted.

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