One of the final sticking points in the debt-reduction plan was the issue of how to ensure domestic discretionary spending cuts in the next two years would be spread out across both defense and non-defense programs.
According to a Senate Democratic leadership aide, here's how it played out:
House Republicans started out insisting on a “freeze” of defense spending so that the entirety of the reductions would fall on the non-defense side.
This would have imposed a disproportionate share of the burden on important domestic programs such as education and medical research.
Democrats insisted on imposing a “firewall” that would ensure that any attempts to increase defense spending could not be done at the expense of domestic discretionary programs.
House Republicans balked at the firewall idea when it was first proposed by Senate Democratic leadership staff and the majority staff of the Senate Appropriations Committee almost two weeks ago.
In response, Senate Democrats offered a compromise: if House Republicans would accept the firewall concept, Senate Democrats would allow for other forms of security-related spending (State Department/Foreign Operations, Homeland Security, Military Construction/Veterans Affairs) to be grouped together on one side of the firewall along with Pentagon funding.
As part of this condition, the total annual reduction in spending would be split evenly between the security side of the firewall and the non-security side of the firewall. This proposal was at first accepted by Majority Leader Eric Cantor’s office, but then later rejected. The speaker then came back to it in the final compromise.
As a result, out of the $7 billion in domestic discretionary cuts taking effect in fiscal year 2012, at least half will come from security-side funding. For fiscal year 2013, roughly half of the $3 trillion in cuts will come from security-side funding.