Monday, President Trump and US Congressional leaders reached a deal for a 2-year extension of the debt limit and federal spending caps that would avert a feared government default later this year but add to rising budget deficits.
“I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy,” President Trump Tweeted.
Mr. Schumer and Mrs. Pelosi issued a statement confirming the agreement, saying the measure would be voted on “swiftly” in the Democratic-led House of Representatives. The Republican-led Senate must also pass the measure before it can be signed into law by President Trump.
House Speaker Pelosi (D-CA) has been pushing to win passage by this week, before the start of a long Summer recess that extends to 9 September.
Final details between The Trump Administration and Congressional leaders were worked out as Speaker Pelosi talked by telephone from a delayed commercial flight to Washington following a speech she delivered earlier in the day in Detroit.
Under the agreement, the result of weeks of closed-door negotiations, the Treasury Department’s borrowing authority would be extended through 31 July 2021.
The agreement would also set overall spending levels for the next 2 years on both defense and non-defense programs operated by the federal government.
Under the deal, spending on those “discretionary” programs would rise to $1.37-T in FY starting on 1 October up from $1.32-T this year.
In FY 2021, spending would rise at a slower pace, to $1.375-T.
Senator McConnell (R-KY) praised the pact, saying it “secures the resources we need to keep rebuilding our armed forces,” while not specifically mentioning rising non-defense outlays.
If enacted into law, non-defense domestic funding would be $100-B higher than when President Trump took office in January 2017.
Earlier Monday, a source close to the talks said the deal would include about $75-B in what are being described as partial “offsets” to higher spending over the next 2 years.
If this budget deal negotiated by The Trump Administration and Congressional leaders becomes law, it would mark the final chapter of a 10-year budget law enacted in Y 2011 that was designed to bring down federal spending through potentially steep across-the-board cuts.