WASHINGTON — The Senate threw the future of the defense budget into question Thursday by passing an annual policy bill but then blocking any spending to fund it.
The massive National Defense Authorization Act that was passed calls for converting 20-year military pensions into a hybrid 401(k)-style system, which mirrors the House version passed last month. It also provides a small increase in troop pay raises from last year and protections against commissary cuts.
But the annual appropriations bill that funds those initiatives was blocked Thursday from reaching the Senate floor by Democrats, who want more money for federal programs outside of the Defense Department.
Congress was braced for a political fight over federal spending caps that threatens to scuttle the defense budget. The Democrats oppose the GOP-crafted plan because it sidesteps mandatory federal spending caps by funneling nearly $39 billion for daily military expenses into an emergency overseas war fund, which is immune from the spending limits.
Meanwhile, other federal programs still face the caps, which are often called sequestration and were designed by Congress to force reductions in the federal debt.
“We cannot and should not fix part of our government and not the other part,” said Sen. Harry Reid, D-Nev., the Senate minority leader.
The Pentagon has also warned against tapping the emergency war fund, called Overseas Contingency Operations, to cover shortfalls in annual funding. Defense Secretary Ash Carter recently testified to Congress that the maneuver is a “road to nowhere” and would cause unwanted uncertainty beyond the coming fiscal year.
“Instead of helping the Pentagon operate more effectively, this misuse of short-term OCO funds for non-war-related activities would hinder our military’s ability to plan for the future,” said Sen. Jack Reed, D-R.I., ranking member on the Armed Services Committee.
Senate Majority Leader Mitch McConnell, R-Ky., blasted Democrats for reneging on military commitments by blocking the spending bill only moments after voting in favor of the NDAA bill.
“It would be very cruel indeed for any senator that just made that pledge to go and turn around and block the rest of us from fulfilling that pledge to troops,” he said.
Now, the Senate must find a way forward or the military could be left without a budget when the current fiscal year ends Sept. 30. A permanent political solution to the federal budget caps has been elusive for years and is unlikely to materialize by the fall.
But the NDAA bill will likely continue forward this summer even as the Senate wrestles with spending.
It includes a retirement overhaul that proponents say would increase the number of troops who leave service with retirement benefits from 17 percent to 75 percent.
New recruits would have up to 5 percent of their pay automatically diverted into a Thrift Savings Plan and the military services would pay a matching amount. The current 20-year pension would remain but be reduced by 20 percent of its current value.
The Senate backed a modest increase from 1 to 1.3 percent in troop pay raises from last year, the same increase proposed by the White House. The House has back a higher 2.3 percent raise.
Now, the military oversight committees in the two chambers of Congress must meet in conference to reconcile the differences and hammer out a single defense authorization bill.
“I am totally convinced we can get the bill back out of conference in July,” Sen. John McCain, R-Ariz., said. “I have a very close working relationship with the chairman of the House Armed Services Committee (Mac Thornberry, R-Texas) and I am confident that we can resolve those differences and resolve them quickly.”