×

Deal sealed on federal budget, ensuring no shutdown, default

President Donald Trump speaks during a meeting with Pakistani Prime Minister Imran Khan in the Oval Office of the White House, Monday, July 22, 2019, in Washington. (AP Photo/Alex Brandon)

WASHINGTON (AP) — President Donald Trump and congressional leaders announced Monday a critical debt and budget agreement that’s an against-the-odds victory for Washington pragmatists seeking to avoid political and economic tumult over the possibility of a government shutdown or first-ever federal default.

The deal, announced by Trump on Twitter and in a statement by Democratic House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer, will restore the government’s ability to borrow to pay its bills past next year’s elections and build upon recent large budget gains for both the Pentagon and domestic agencies.

“I am pleased to announce that a deal has been struck,” Trump tweeted, saying there will be no “poison pills” added to follow-up legislation.

“This was a real compromise in order to give another big victory to our Great Military and Vets!”

The agreement is on a broad outline for $1.37 trillion in agency spending next year and slightly more in fiscal 2021. It would mean a win for lawmakers eager to return Washington to a more predictable path amid political turmoil and polarization, defense hawks determined to cement big military increases and Democrats seeking to protect domestic programs.

Nobody notched a big win, but both sides view it as better than a protracted battle this fall.

Pelosi and Schumer said the deal “will enhance our national security and invest in middle class priorities that advance the health, financial security and well-being of the American people.” Top congressional GOP leaders issued more restrained statements stressing that the deal is a flawed but achievable outcome of a government in which Pelosi wields considerable power.

“While this deal is not perfect, compromise is necessary in divided government,” said House Minority Leader Kevin McCarthy, R-Calif.

However, it also comes as budget deficits are rising to $1 trillion levels — requiring the government to borrow a quarter for every dollar the government spends — despite the thriving economy and three rounds of annual Trump budget proposals promising to crack down on the domestic programs that Pelosi is successfully defending now.

It ignores warnings from deficit and debt scolds who say the nation’s fiscal future is unsustainable and will eventually drag down the economy.

“This agreement is a total abdication of fiscal responsibility by Congress and the president,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington advocacy group. “It may end up being the worst budget agreement in our nation’s history, proposed at a time when our fiscal conditions are already precarious.”

A push by the White House and House GOP forces for new offsetting spending cuts was largely jettisoned, though Pelosi, D-Calif., gave assurances about not seeking to use the follow-up spending bills as vehicles for aggressively liberal policy initiatives.

The head of a large group of House GOP conservatives swung against the deal.

“No new controls are put in place to constrain runaway spending, and a two-year suspension on the debt limit simply adds fuel to the fire,” said Republican Study Committee Chairman Mike Johnson, R-La. “With more than $22 trillion in debt, we simply cannot afford deals like this one.”

Fights over Trump’s U.S.-Mexico border wall, other immigration-related issues and spending priorities will be rejoined on spending bills this fall that are likely to produce much the same result as current law. The House has passed most of its bills, using far higher levels for domestic spending. Senate measures will follow this fall, with levels reflecting the accord.

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper *
   

Starting at $4.62/week.

Subscribe Today