Trump Reaches Budget Deal With Democrats

Budget deal: Trump tweets deal has been struck on budget and debt ceiling

Shortly before the deal was announced, David McIntosh, president of the conservative, pro-free-enterprise group Club for Growth, said Mnuchin "would best serve @realDonaldTrump if he insists on a better #spendingdeal that doesn't bankrupt our country".

That's important to understand when you hear members of Congress and opinion-leaders from both sides wail and gnash their teeth over the deal and threaten to drag Washington down to the bottom of hell rather than submit to it. The last thing he wants is another government shutdown or a debt limit debacle, and the agreement avoids that risk.

The near-final two-year agreement would suspend the debt limit until July 31, 2021, and put an end to an automatic spending cuts that would have kicked in without a deal.

If passed, the agreement would avoid steep automatic cuts set to take effect for fiscal year 2020 and defuse the threat of a possible debt default.

The Trump administration has been running up increasingly huge deficits, which happens when the government spends more money during a fiscal year than it takes in.

Trump once said he would eliminate the $22 trillion federal debt, but the annual budget deficit is on track to top $1 trillion a year - swollen by bipartisan spending increases and his tax cuts - with no real expectation of a change in trajectory any time soon. This is the fourth deal since 2013 to reverse those cuts.

While a push by the White House and House GOP forces for new offsetting spending cuts was largely jettisoned, Pelosi has given assurances about not seeking to use the follow-up spending bills as vehicles for aggressively liberal policy initiatives.

Yes, more than two months before the end of the fiscal year, and weeks before the Treasury was due to begin sending up serious flares about running out of cash, and even a few days before the beginning of the August congressional recess, it appears the administration, with Stephen Mnuchin acting as chief negotiator, and Nancy Pelosi, representing the congressional chamber controlled by Democrats, signed off on a budget deal that had been reported as near completion. The spending levels in this deal would only accelerate that climb, adding about $2 trillion to projected debt levels over the next decade.

Mnuchin was eager to avert a crisis over the government's debt limit.

Details on spending levels were kept under wraps so far, but the complicated accounting under Washington's arcane budget rules gives each side a way to paint the numbers favorably.

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 - on a two-year Budget and Debt Ceiling, with no poison pills....

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. Democrats have grown increasingly strident in their opposition to Hyde, arguing that it hurts low-income women who rely on Medicaid more than others, but House leaders earlier this year kept the situation from erupting into a revolt on the fiscal 2020 Labor-HHS-Education spending bill on the floor.

Lift spending levels over the next two years by about $320 billion. Deficit hawks expressed dismay at more of the same.

But with the two-year agreement to raise spending limits, the Senate can move forward with its bills, which will help House and Senate appropriators write the final spending legislation needed to avert a government shutdown when current funding runs out on October 1. Legislation to prevent a government shutdown will follow in September.

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