Despite much media doubt, it appears that President Trump and senior Democrats have reached a compromise on a two-year budget deal that suspends the debt ceiling through to July 2021. But will this bi-partisan move anger budget hawks in the Republican Party and potentially derail the spending plan?
Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi (D-CA) have been arguing back and forth over top-line numbers for defense and nondefense spending in the hopes of averting a potential shutdown at the end of the year. Neither side wants this hanging overhead like a fiscal Sword of Damocles in the election season, and while showing compromise may not bolster the party faithful, it’s a real boost with swing voters.
Both sides have been particularly wary of poison pills being slipped into the deal, especially as the media machine is likely to be looking for point scoring on behalf of their chosen teams. Trump was quick to allay fears, tweeting:
“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.”
He followed up by saying “This was a real compromise in order to give another big victory to our Great Military and Vets!”
The spending package includes elements that are likely to please both sides: defense spending for the GOP and domestic program allowances for the Democrats. According to The Hill, Democrat sources state that “the top-line for defense spending would be $738 billion and $740 billion for the 2020 and 2021 fiscal years, respectively. Nondefense spending would be $632 billion for fiscal 2020 and $634.5 billion for fiscal 2021.”
Fiscal Trouble Ahead
However, not all sides are thrilled with the agreement. The conservative advocacy group, The Committee for a Responsible Federal Budget (CRFB), denounced the deal, suggesting it could turn out to be “the worst budget agreement in our nation’s history.” The group estimates that it could add almost $2 trillion to deficits over the next decade.
Maya MacGuineas, CRFB President, said: “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.”
Yet some senior Republicans appear more confident. Senate Majority Leader Mitch McConnell (R-KY) tweeted, “I am glad the administration and Speaker Pelosi have reached a two-year funding agreement that secures the resources we need to continue rebuilding our armed forces. The next step is for the House and the Senate to pass this agreement so that President Trump can sign it into law.”
Nancy Pelosi and Chuck Schumer released a joint statement expressing modest hope that the legislation will move quickly and be put to bed before the election cycle really heats up. They said:
“A bipartisan agreement has been reached that will enhance our national security and invest in middle class priorities and well being of the American people … 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.”
Perhaps this is the start of a more accommodating relationship between Trump and the Democrats. But will budget hawks in the president’s own party be willing to accept the extra spending commitments? The bi-partisan battle may have been a victory for both sides; however, whether the administration can get the necessary support from Senate Republicans may prove to be either the escalation of a GOP civil war or the final push that Trump needs to secure a 2020 victory.