Debt limit negotiation could mean defense spending freeze, cut
“We have to think about what our priorities are, especially considering the threats we face around the world,” South Dakota U.S. Sen. Mike Rounds said.
SIOUX FALLS — If the supposed June 1 date for the United State government to run out of borrowing authority — and the potential default on the national debt to follow — is to be believed, things are getting a bit too close for comfort for South Dakota U.S. Rep. Dusty Johnson.
“The White House has continued to show a lack of urgency, and I think it's a pretty substantial barrier to an agreement,” Johnson told Forum News Service on May 24. “We're moving ever so slightly in the right direction, but June 1 is supposedly the deadline, and their lack of urgency is beginning to undermine confidence in whether that’s even a real deadline.”
For U.S. Sen. Mike Rounds, whose time in the Senate has been marked by ever-recurring debt ceiling threats, the brinkmanship has almost become business as usual.
“I don’t believe there have been any surprises so far. Both sides think it’s to their advantage to delay as long as possible, hoping the other side begins to fold,” Rounds said during an interview on May 26. “You know, if it were a June 3 deadline, I think we would get a deal on June 2. It’s not the way I think we should do things, but it seems to be the way Washington continues to work.”
A spokesperson for U.S. Sen. John Thune indicated South Dakota’s senior senator would avoid “hypotheticals” until a deal is reached, though Thune used a recent floor speech to lend his support for a House Republican priority of reducing 2024 discretionary spending back to 2022 levels.
Several national news sources indicate the two sides are narrowing in on a deal, though sticking points, like exactly how much to restrain spending in the short and long-term, remain.
But precisely how the White House and House Republicans come to a compromise — and whether it includes capping the defense portion of the government’s discretionary spending — could have an impact on South Dakota and the Ellsworth Air Force Base, which is set to receive billions in federal dollars over the next decade to develop the next-generation B-21 bombers.
“I know defense is on the table, but we want to keep in mind that it’s almost mandatory in that it’s required by the Constitution,” Rounds said. “Maintaining the nation’s defense is a core responsibility of Congress.”
On the Republican side, as Johnson laid out in his weekly column on May 26, there are three main demands: capping the federal government’s discretionary spending growth; reclaiming unspent pandemic funds and certain renewable energy-adjacent tax credits; and “growing the economy” through actions that include a welfare work requirements measure backed by Johnson.
Federal discretionary spending represents about one-third of total federal spending; the rest, including Social Security, Medicare and the interest on the public debt, is mandatory spending that does not need to be individually appropriated by Congress each year.
Discretionary spending can be further split into defense and nondefense spending, which includes education and low-income housing programs, among myriad other items. The most recent discretionary budget is split approximately halfway between these two categories, with $858 billion going toward defense and $772 billion toward nondefense programs.
Though Democrats have accused Republicans of wanting the bulk of discretionary cuts to come from nondefense spending, Johnson said that’s not how he’s thinking about capping discretionary spending for the purposes of negotiating a debt ceiling raise.
“I think a cap should be set overall for discretionary spending. I think that gives us the best chance of success,” he said. “I don't think we need to set hard sub-limits on defense and nondefense. I actually think it complicates the ability of the deal to get done.”
Johnson’s column further enumerated some potential red lines for House Republicans in the negotiations, writing they’ve “vowed to not raise taxes, not cut funding for veterans’ programs, and protect Social Security and Medicare.”
“We don’t have a revenue problem, we have a spending problem,” he told Forum News Service, pointing out that federal tax receipts as a percentage of total economic output are near their highest-ever levels.
In 2011, the last time an increase to the debt ceiling was accompanied by meaningful negotiations, a cap on discretionary spending growth affected both defense and nondefense spending.
Rounds pointed to that compromise as partially responsible for shortages of ammunition, delays in infrastructure projects and various other issues in the Department of Defense.
For Rounds, a member of Senate committees dealing with intelligence, armed forces and veterans’ affairs, even minor top-line cuts to the nation’s defense spending might fail to meet the level of threats coming from abroad, especially considering the impact of inflation on year-over-year purchasing power.
“We have to think about what our priorities are, especially considering the threats we face around the world,” he said. “Our adversaries could look at [a reduction in defense spending] and see some weaknesses.”
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or email@example.com.