The White House and congressional Democrat leaders have reportedly moved close to a budget deal that would raise the debt ceiling for two years, according to multiple reports.
A CNBC News report suggested that a deal is “near final” on raising the debt ceiling and that remaining talks have moved to “technical language issues.”
The reported deal said that the agreement would lift the debt ceiling for two years, through July 31, 2021. The budget deal would also eliminate the sequester spending cuts enacted during the Barack Obama administration.
The agreement would also increase spending for the Department of Defense (DOD) and domestic spending, one of House Speaker Nancy Pelosi’s (D-CA) priorities. The deal also includes $75 billion in spending offsets, which some conservatives have advocated for.
House Speaker Pelosi hopes to bring a budget deal to the House floor by Thursday, which serves as the last day the chamber remains in session before they leave for the August recess. Pelosi believes that passing the budget this week would give the Senate ample time before it parts for the August recess at the end of next week.
Treasury Secretary Steven Mnuchin has warned that the federal government could run out of money by September, setting up a potential default on the federal debt.
Sources close to both Mnuchin and Pelosi describe the deal as a “real compromise” that gives parties priority wins while eliminating the $125 billion in automatic spending cuts if no new deal is reached.
The deal will also bar Democrats trying to scrap the Hyde amendment, which prohibits federal spending on abortion, or restricting Trump’s national emergency authority to build the wall.
While the White House and congressional Democrats can avoid a potentially contentious fight by raising both domestic and defense spending, some conservative groups have raised concerns over D.C.’s lack of interest in cutting the national deficit.
“Democratic and Republican ‘leaders’ in Congress appear more than content to bankrupt America. This rumored discretionary spending caps deal shows how out of touch the political class is with the rest of the country,” FreedomWorks President Adam Brandon said in a statement Saturday. “Congress is drowning the country in a river of red ink.
FreedomWorks, along with the Coalition to Reduce Spending, the Club for Growth, Americans for Tax Reform, and several other conservative groups, signed a letter in April to Senate Majority Leader Mitch McConnell (R-KY) and House Republican Leader Kevin McCarthy (R-CA), urging them not to busy the discretionary spending caps.
“The recent long-term projections released by the CBO were a dark reminder of the future that we face if we don’t get our fiscal affairs in order,” Brandon added.