May 25, 2023
In Debt-Limit Fight, Biden Scores a Win on Defense Spending
(Bloomberg) -- Republican debt-limit negotiators are setting aside demands for large increases in defense spending and instead settling for a smaller increase President Joe Biden sought in his budget proposal, people familiar with the talks said.
The emerging consensus on a defense number marks a significant victory for Democrats, who have been trying to bat back Republican efforts to augment Biden’s proposed $886.3 billion proposal for national security next year, which is already a 3.3% increase over current levels.
The Pentagon would receive $842 billion of that request, according to the people, who spoke on condition of anonymity because no final agreement has yet been concluded.
House Speaker Kevin McCarthy acknowledged Republican hopes for a defense build-up would have to be curtailed but didn’t disclose specifics of what is under consideration.
“I know people would like to spend more,” he told reporters at the Capitol on Thursday. But, he added, this is “where we are.”
Republicans have also demanded dramatic cuts to domestic spending in exchange for their agreement to raise the debt ceiling before June 1, the date by which Treasury Secretary Janet Yellen warns the US could run out of cash to pay its bills.
Funding levels for non-defense accounts are still being negotiated.
Spokespeople for the White House and McCarthy didn’t immediately respond to requests for comment.
McCarthy signaled he was willing to agree to the president’s requested level for defense accounts, according to two of the people, after the GOP was pressing for an increase.
Republican proposals to boost defense spending even as they demand sharp cuts to the rest of the federal budget have provoked determined opposition from Democrats.
Defense spending already makes up more than half of the US discretionary budget.
Should a deal be reached soon, Tuesday is emerging as the likely day for a House vote. The Senate would then need to act quickly to send it to Biden’s desk before the June 1 deadline.
The following day sees a payment due to millions of Social Security beneficiaries, putting pressure on politicians to resolve the impasse.
--With assistance from Erik Wasson and Zach C. Cohen.
©2023 Bloomberg L.P.