Budget fight looms as Obama wants 7 percent spending increase

WASHINGTON – Setting up a showdown with the new Republican-controlled Congress, the Obama administration said Thursday that the president’s proposed 2016 federal budget would include a $74 million increase in discretionary spending that blew past the caps in place under current budget law.

The fiscal 2016 budget plan, which would take effect Oct. 1, will be released Monday by the White House. It proposes spending that is 7 percent above the levels agreed to under a multiyear budget deal in 2011.

To sweeten the spending proposal for Republicans, President Barack Obama would boost military and domestic spending almost equally. The White House said military spending would total $561 billion and non-defense $530 billion; each increasing by $38 billion and $37 billion, respectively.

Presidential spokesman Josh Earnest said the one-for-one tradeoff “certainly is consistent with the kind of agreement that’s been reached in previous budget negotiations over the last several years.”

The White House proposal would force Republicans to choose between two priorities: national security and deficit reduction.

Obama presented his plan to a meeting of Democrats from the House of Representatives at a retreat in Philadelphia. House Republicans already signaled skepticism.

Until Obama “gets serious about solving our long-term spending problem, it’s hard to take him seriously,” said Cory Fritz, a spokesman for House Speaker John Boehner, R-Ohio.

The 10-year budget deal agreed to in 2011 sought to reduce future spending by $917 billion over 10 years, forcing automatic cuts in years that lawmakers couldn’t agree on a budget. The idea was to bring down the annual budget deficit, which is expected to reach an Obama administration low of $468 billion in the current fiscal year.

Even with forced spending cuts in place, deficits are projected to grow again in a few years, hitting $1.1 trillion in 2025. That’s because of mandatory spending programs such as Social Security and Medicare, sacred to voters. The White House wouldn’t say whether Obama’s proposal includes any cuts to such programs.

Obama’s proposed budget takes a cue from the two-year budget deal Congress agreed to in late 2013, which lifted by $85 billion the spending caps for the 2014 and 2015 fiscal years, the latter ending next Sept. 30. Obama proposes a one-year deal that raises spending by just $11 billion less than that amount, something Republicans are unlikely to find inviting.

The caps that would be exceeded come under what’s known as sequestration. Under the Budget Control Act of 2011, which took effect in March 2013 and runs through the 2021 fiscal year, automatic spending cuts take effect each year if lawmakers can’t agree on a budget.

“I find it very hard to believe that one of the first things they would do is ease the 2016 caps,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget Office who is a fellow at the centrist research center the Urban Institute. “Defense is a whole other issue.”

That’s why Obama’s proposed budget puts Republicans on their back foot. In rejecting his proposal, they allow the Defense Department to be starved of what it says are needed funding increases.

“We are on track now to cut $1 trillion from America’s defense budget by the year 2021,” Senate Armed Services Committee Chairman John McCain, R-Ariz., bemoaned Wednesday at a hearing he had called to examine the effect of the sequester on the military.

The cuts have made it difficult for the military to plan for the future or make long-term investments, said McCain, adding that absent action, “sequestration will return in full in fiscal year 2016, setting our military on a far more dangerous course.”

Budget experts loathe the sequestration process because it forces across-the-board cuts, akin to cutting spending with a blunt sword rather than a sharp scalpel.