As New Leadership Takes Over in Washington, a Major Fiscal Clash Takes Shape

Gen. Mark A. Welsh III, the Air Force chief of staff, testified against defense budget cuts on Wednesday. CreditKevin Wolf/Associated Press
WASHINGTON — President Obama will propose breaching statutory spending caps in the fiscal year that begins in October, putting out a budget Monday that raises spending at Congress’s discretion by $74 billion — or 7 percent, the White House announced Thursday.

With the era of falling budget deficits coming to an end, Mr. Obama and Congress are hurtling toward a major fiscal clash over spending as the White House and Democrats press for an easing of fiscal spending austerity just as Republicans redouble efforts to balance the budget.

The president’s budget would raise military spending next year by $37 billion over caps set in the 2011 Budget Control Act, a measure reached after hard-fought negotiations with the new Republican-led House. Domestic spending would rise $38 billion over the cap for fiscal 2016.

Continue reading the main storyRELATED COVERAGE

• 
  Budget Calculus: Why Spending Is Back in Season in WashingtonJAN. 28, 2015
• 
  Budget Forecast Sees End to Sharp Deficit Declines JAN. 26, 2015

While both sides say they are trying to aim their policies at the squeezed middle class, the divide between the two parties on actual fiscal policy may be as stark as any time since Bill Clinton’s first term and government shutdowns of 1995 and 1996. Since then, Washington policy makers have been focused either on issues like national defense, financial crises and recession or at least on professing a common goal of balanced budgets and fiscal rectitude.

But solid economic numbers and new leadership on important congressional committees have driven the parties apart. As one senior Democratic budget aide said, “We’re on different planets.”

“Congress is under new management, and so is this committee,” Senator Michael B. Enzi, Republican of Wyoming and the new chairman of the Senate Budget Committee, said Wednesday at the panel’s first hearing of the new Congress. “I intend to run a budget committee dedicated to the proposition that we must confront spending, bring the deficit to an end and, ultimately, balance the budget.”

Senator Bernard Sanders, a liberal independent from Vermont and the panel’s new ranking member, retorted: “There are other deficits in our society that have been causing horrendous pain for the vast majority of the American people. These are deficits in decent-paying jobs, deficits in infrastructure, deficits in income, deficits in equality.”

It is not just Mr. Sanders. Mr. Obama and Representative Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee, are pushing measures to raise taxes on the rich to bolster the incomes of middle-class families. Democrats on the budget committee were once led by moderate fiscal hawks; now, the ranking members are far more liberal.

And while Republicans are also speaking more about wage stagnation and income inequality, the party remains united around a traditional platform of spending constraint and deficit reduction, which leaders still say is the answer to sluggish growth and bridging the divide in incomes.

A series of fiscal showdowns is coming, starting with an end to Department of Homeland Security funding on Feb. 28, a sharp cut in physician payments under Medicare on March 31, the depletion of the highway trust fund on May 31, a debt-ceiling showdown this summer or fall and the return of across-the-board mandatory cuts known as sequestration on Oct. 1.

If those cuts happen, “we will not be able to defeat an adversary, deny another adversary and defend the homeland,” Gen. Mark A. Welsh III, the Air Force chief of staff, told the Senate Armed Services Committee on Wednesday. “I do not believe that is good for America.”

Helene Cooper contributed reporting.

A version of this article appears in print on January 29, 2015, on page A19 of the New York edition with the headline: As New Leadership Takes Over in Washington, Old Fiscal Battles Are Resurfacing. 
http://www.nytimes.com/2015/01/30/us/politics/as-new-leadership-takes-over-in-washington-a-major-fiscal-clash-takes-shape.html?action=click&contentCollection=Middle%20East&region=Footer&module=TopNews&pg