Trump agrees to budget deal, ensures 2 more years of massive spending
Despite the campaign promises and political rhetoric, President Trump continued the Obama era “new normal” of $1 trillion in annual deficits with another debt ceiling compromise that will maintain the excessive federal spending depleting the record tax revenues as fast as they arrive in Washington. The agreement actually include a small increase in spending.
photo/ TaxRebate.org.uk
The deal for more than $2.7 trillion in spending over two years, which must still pass both chambers of Congress and needs President Trump’s signature, would suspend the debt ceiling until the end of July 2021.
It also raises spending by nearly $50 billion next fiscal year above current levels.
The agreement sidesteps the steep spending cuts initially sought by the Trump administration, providing for about $320 billion in spending over two years above limits set in a 2011 budget law that established automatic spending cuts, known as the sequester.
Trump announced the deal on Twitter late Monday, citing all four congressional leaders. He added: “This was a real compromise in order to give another big victory to our Great Military and Vets!”
House Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven Mnuchin negotiated the agreement for weeks, hoping to complete a deal before the House leaves Washington at the end of the week for August recess.
Mnuchin had warned that the government could exceed its borrowing limit as soon as early September, before lawmakers return from recess.
Pelosi and Sen. Chuck Schumer of New York, the chamber’s Democratic leader, pledged that the House would bring the deal quickly to the floor. They stressed that the agreement increases both defense and domestic spending and said they had agreed to spending offsets that were part of an earlier bipartisan agreement.
Senate Majority Leader Mitch McConnell (R., Ky.) said he was encouraged by the deal, adding that it “secures the resources we need to keep rebuilding our armed forces.” He said he intended to have the Senate vote on it before the chamber departs for recess.
A key sticking point in the negotiations was how to pay for the cost of the spending increases. The deal extends small cuts to Medicare beyond fiscal year 2027 and extends fees collected by Customs and Border Protection, amounting to $77 billion worth of savings to offset the cost. Those routine budget accounting moves fall short of the $150 billion in spending cuts originally sought by the administration.
“There was a time when Republicans insisted on a dollar of spending cuts for every dollar increase in the debt limit,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “It’s hard to believe they are now considering the opposite —attaching $2 trillion of spending increases to a similar-sized debt limit hike.”
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