President Donald Trump and bipartisan congressional leaders avoided Monday the threat of a fiscal crisis, reaching, after days of strenuous negotiations, a two-year budget deal that would also suspend the debt ceiling through July 2021.
The deal, spearheaded by House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, will produce billions of new spending for defense and nondefense for fiscal 2020 and 2021 and get rid of the budget caps that have been in place since 2011, CNN reports.
“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,” President Trump tweeted not long after they signed the budget deal. “This was a real compromise in order to give another big victory to our Great Military and Vets!”
The agreement is yet to be passed in both the House and the Senate, but given the fact that all four congressional leaders signed off on it, the deal’s likelihood of passing is generally high.
Pelosi noted Monday that the threat of a stock market collapse and the fiscal fallout from failing to raise the debt ceiling were the two dominant motivators for the success of her negotiations with Mnuchin.
“The debt ceiling and the stock market were always two major motivators for him to try and clear the way,” she said in a brief interview with CNN. “We avoided sequestration and for the moment avoided a shutdown. For federal workers, that was very important.”
The House speaker further praised the increase in spending for Democratic priorities and stressed that the legislation will be put to the vote in the chamber before lawmakers depart on Friday for a six-week recess.
“The House will now move swiftly to bring the budget caps and debt ceiling agreement legislation to the Floor, so that it can be sent to the President’s desk as soon as possible,” Pelosi said in a joint statement with Schumer. “With this agreement, we can avoid the damage of sequestration and continue to advance progress for the people.”
The deal is nonetheless expected to face some pushback from conservatives, who oppose the elimination of the budget caps. The Committee for a Responsible Federal Budget said the deal could possible be “the worst budget agreement in our nation’s history.”
“If this deal passes, President Trump will have increased discretionary spending by as much as 22 percent over his first term and enshrine trillion-dollar deficits into law,” CRFB President Maya MacGuineas said, according to The Hill.
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