Republican high hopes for balanced budget face Senate battle

[March 12, 2015]  By David Lawder
 
 WASHINGTON (Reuters) - A major goal of the new Republican-led U.S. Congress, passing a balanced budget, could be in jeopardy amid disagreements within the party over easing constraints on defense spending.

The latest Republican feud comes less than a month after an embarrassing spat over homeland security funding and immigration. The fight pits conservatives who want to keep the "sequestration" budget caps in place against pro-military senators who say the constraints are degrading the Pentagon's technological edge and ability to fight wars.

With control of the Senate and the largest House of Representatives majority since World War II, Republicans hope to pass a full budget for the first time since 2009. It would aim to eliminate deficits within 10 years, cut federal benefits programs and lower tax rates.

But without a defense spending increase, it will lose key Republican votes in the Senate and could spark another bitter fight like last month's failed effort to use Department of Homeland Security funding to block President Barack Obama's immigration initiatives.

"I will not agree to any budget that does not stop sequestration," said Senator John McCain, a defense hawk who chairs the Senate Armed Services Committee, referring to the across-the-board discretionary spending caps put in place by a 2011 budget deal.

His sentiments have been echoed by Senator Lindsey Graham and other Republicans who want to lift the caps.

But conservatives say those caps are the only real savings achieved in years of budget fights and are needed to reach their goal of a balanced budget in 10 years.

"There's no way you can produce a responsible budget that doesn't put every program under review," said Senator Jeff Sessions, a senior Republican on the budget committee. "We just don't have the money."

Republican Senator Kelly Ayotte said a solution for defense funding may be include a "deficit-neutral reserve fund" that would allow spending caps to stay in place.

House Budget Committee Chairman Tom Price and Senate counterpart, Mike Enzi, plan to unveil their fiscal blueprints next week, with floor votes later this month.

They have released few details, except to say there would be similarities to past Republican budgets authored by Paul Ryan, who now chairs the tax-writing House Ways and Means Committee.

The budget resolutions do not carry the force of law, but are statements of policy priorities that help lawmakers shape future spending bills and the Republican Party's election platform for 2016.

(Additional reporting by Richard Cowan and Patricia Zengerle; Editing by John Whitesides and Lisa Shumaker)

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