On a number of occasions this week, I've noted that defense spending was likely to be one of the major stumbling blocks to a final deal, with Senate Majority Leader Harry Reid, D-Nev., and House Speaker John Boehner, R-Ohio, hundreds of billions apart when it came to cuts. Here's how they ended up resolving the issue.
Both Reid and Boehner's bills were actually quite similar in terms of the overall cuts to discretionary spending over the next decade (around $900 billion). The big difference was that Reid established a so-called “firewall” seperating security and non-security spending, whereas Boehner's did not. Over time, this meant a lot more would be cut out of the defense budget.
In the compromise, they kept Reid's firewall, but they defined the idea of “security” spending more broadly so that it didn't hit the Pentagon budget quite as hard. Under the Reid plan, “security” only included the Department of Defense and Veterans' Affairs. Republicans assumed Democrats wouldn't actually cut veterans' benefits, so that effectively all of the cuts would come from defense. The new “security” category, however, also includes foreign aid, Homeland Security, and additional parts of the budget, meaning the cuts won't fall as heavily on defense. At this time, there are no estimates as to how this translates in dollar terms. A spokesman from the House Armed Services Committee says they are still “examining the details and exploring how they will impact defense.”
And just to be clear, this only applies to the first round of cuts, which will accompany the initial debt limit increase. This shouldn't be confused with the defense cuts that could be triggered if the joint Congressional committee to find another round of cuts cannot come to an agreement.