Senators talk about lifting spending caps

Budget ceilings on defense and non-defense spending will be relieved next year if a group of Republican and Democratic senators get their way.

Sen. Lindsey Graham (R-S.C.), a potential 2016 presidential contender, told reporters Tuesday that the group is considering a plan that would allow the government to spend more than what’s allowed under a 2011 budget deal that introduced budget cuts known as sequestration.

{mosads}“What we need to do is buy back sequestration. What we’re trying to do is put together a mini Simpson-Bowles deal,” Graham said.

Simpson-Bowles refers to a budget proposal authored by former Sen. Alan Simpson (R-Wy.) and former White House chief of staff Erskine Bowles. That deal included tax hikes and entitlement cuts, something Graham said could be part of the deal the senators are now discussing

He said he was willing to close “loopholes” in the tax code if Democrats were willing to make concessions on entitlements.

“That’s the ideological problem for some Republicans, but not for me. I would generate some revenue by capping deductions in the tax code if Democrats help me make some small entitlement changes that buy it back…a mini Simpson-Bowles,” he said.

 Besides Graham, the new group also includes Sens. Kelly Ayotte (R-N.H.), Roger Wicker (R-Miss.), Tim Kaine (D-Va.) and Angus King (I-Maine). All of them sit on both the Budget and Armed Services Committees.

GOP defense hawks have long protested the sequestration budget ceiling for the Pentagon and some are now warming to the idea of dealing with the cap for non-defense domestic programs. In the midst of the Ebola crisis last fall, for example, several Republicans had called for an end to sequestration because the government’s health agencies couldn’t operate properly under the spending limits.

Graham said he wouldn’t vote for a budget blueprint that “that does what sequestration continues to do.” He later suggested he would be willing to vote for one that maintains the caps, but includes a “deficit-neutral reserve fund” that can be used to find a replacement for sequestration.

Senate Budget Committee Chairman Mike Enzi (R-Wyo.) isn’t involved in the talks, Graham said. Enzi is working on a Senate GOP budget resolution, which could be the vehicle for the anti-sequestration effort.

“Wait and watch what we do during the budget amendment process in the committee because you’re going to see committee amendments and you’re going to see floor amendments dealing with sequestration,” Kaine said Tuesday.

The group faces several hurdles.

Getting a deal they can all back will be one challenge, and that proposal could meet resistance from House conservatives who would almost certainly oppose a blueprint allowing higher taxes or increased spending.

House Budget Committee Chairman Tom Price (R-Ga.), who is working on a House budget blueprint, has said he wants to keep the spending caps in place. Price has also raised the possibility of eliminating the sequestration firewall between defense and non-defense spending by providing more money to the Pentagon at the expense of domestic programs.

President Obama’s budget request for fiscal 2016, which begins in October, asks Congress to eliminate sequestration by raising the defense cap by $38 billion and the non-defense spending cap by $37 billion.

Office of Management and Budget Director Shaun Donovan has said the White House would welcome a deal similar to the one crafted by then-Budget chairmen Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) in December 2013. Their agreement relieved sequestration caps for fiscal years 2014 and 2015.

If the House and Senate can’t reconcile their differences over spending limits, appropriators must abide by those caps for next year’s spending bills or automatic spending cuts would be triggered across the government.