First Step for Budget Negotiations is Identifying Offsets

One of the first goals of ongoing budget talks among congressional leaders and the White House aimed at raising the discretionary caps for defense and non-defense spending is to agree on offsets for the extra spending.

The discussions are closely guarded and it’s not clear whether any progress has been achieved over the past couple of weeks. One approach under consideration, though, could make negotiators’ work much easier. The two sides could agree to raise both spending caps, but only offset the increase in domestic spending, reported CQ Roll Call.

The fiscal 2016 budget framework established by congressional Republicans already calls for stashing $38 billion in extra funds in DOD’s overseas contingency operations account without offsetting the extra spending, so raising the Budget Control Act ceiling for defense by the same amount without finding a corresponding offset would hardly constitute a stretch.

No agreement on has been reached to adopt that approach, however. The two sides have agreed to drop discussions about using the chained consumer price index (CPI) to offset higher spending. That approach, which has been discussed previously, would use lower inflation rates to calculate growth in entitlement programs and, as a result, reduce government spending.

Adoption of the chained CPI appeals to Republicans but many Democrats and groups that represent senior citizens vehemently oppose switching methods to measure inflation. With the chained CPI on the cutting room floor, budget negotiators will need to rely on less sweeping measures to offset higher spending, according to the story. And it’s still not clear whether the talks will focus on a one- or two-year deal to raise the spending caps.

Dan Cohen
Dan Cohen

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