Pelosi, Mnuchin Near Agreement to Raise Debt Ceiling for 2 Years, Increase Defense, Domestic Spending in Budget Deal

  • According to sources familiar with the matter, House Speaker Nancy Pelosi and Treasury Secretary Seven Mnuchin are close to reaching a two-year deal to raise the debt ceiling.
  • The deal will include $1.3 trillion for both defense and domestic spending for the next two years, including increased top-line defense spending and “would include about $75 billion in offsets for those spending increases.”
  • The debt limit would be suspended until July 31, 2021.
  • In an email, a source wrote: “The near-final agreement is a traditional bipartisan budget agreement where both sides will be unhappy with some aspects — a true compromise.”
  • In an attempt by the Trump administration to be more conciliatory, “the near-final agreement would include roughly $75 billion in offsets, or spending cuts and revenue raisers, to help pay for the deal. That’s half of the $150 billion the administration had pushed to include in the agreement.”
  • There are reports that last week the administration sent a list of $574 billion in proposed cuts to congressional leaders, but the cuts were turned down by Democrats.
  • A major point of contention was how to pay for deal and “how much of it to pay for,” which saw Pelosi and Mnuchin discussing details for about a week.
  • Democratic Senate Minority Leader Charles Schumer said last week: “That’s what we’re discussing. We’re close. And I think there’s a desire to come to an agreement from all of us. My worry here [is] … if Mulvaney tries to be too hard on the offset side that we wouldn’t come to an agreement,” referring to acting White House chief of staff Mick Mulvaney.
  • Negotiators are reportedly “down to some technical language issues” and Mnuchin is said to be updating President Trump and congressional Republicans on the negotiations.
  • There is likely to be dissatisfaction on both sides since “Republicans have generally resisted debt limit hikes and higher domestic spending without cuts, and Democrats will have to vote for raising defense spending to historic highs, a priority for this administration.”
  • However, President Trump is likely to sign the deal.

Reference Links

  • The Hill: Pelosi, Mnuchin reach ‘near-final agreement’ on budget, debt ceiling READ
  • Politico: White House and congressional leaders close in on budget deal READ
  • NPR: Hill And Trump Administration Close In On 2-Year Budget Deal READ
  • CNBC: US debt ceiling and budget deal is ‘near final,’ source says READ

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