House, Senate, and Trump Take Positions on Debt Ceiling, Federal Spending

Written by SK Ashby

We will approach the federal debt ceiling near the end of the current fiscal year on September 30th so it makes the most sense to kill two birds with one stone, but I'm sure it won't surprise you that to learn the Congress and the Trump regime are not necessarily on the same page.

At the moment, there appears to be more distance between Senate Republicans and the White House than there is between Senate Republicans and House Democrats.

Speaker of the House Nancy Pelosi says the House will only raise the debt ceiling if its coupled with legislation to increase federal spending on defense and domestic programs during the next fiscal year beginning on October 1st.

The California Democrat said she’ll agree to increase the so-called debt ceiling, which is needed to avoid a market-cratering default on U.S. government obligations this fall. But she says she’ll do so only after President Donald Trump agrees to lift tight “caps” that threaten both the Pentagon and domestic agencies with sweeping budget cuts.

Pelosi told reporters Thursday that “when we lift the caps then we can talk about lifting the debt ceiling.”

Meanwhile, Politico reports that Senate Majority Leader Mitch McConnell recently scoffed at the acting White House budget director for suggesting that they raise the debt ceiling without a spending deal.

With Trump and acting White House chief of staff Mick Mulvaney at his side, acting budget chief Russ Vought repeatedly urged Mitch McConnell and Kevin McCarthy to raise the debt ceiling without a broader agreement to lift stiff spending caps.

McConnell, the Senate majority leader, was open to different ways to raise the debt ceiling and eager to avoid default. But he eventually grew tired of hearing from Vought.

“Listen buddy, we’re not doing a clean debt ceiling. Get a budget caps deal,” McConnell said, according to people familiar with the conversation in April.

Bloomberg reports that McConnell has more or less taken control of negotiations and wants to present a unified plan that the Senate and the White House both support, but that may not necessarily be easy.

While House Democrats want to increase spending on domestic programs when they lift the debt ceiling, the White House is calling for cutting spending on domestic programs.

The current budget cap is $716 billion for defense funds and $597 billion for non-defense domestic spending. Democrats have proposed a $17 billion in crease for defense to $733 billion and a $34 billion increase for non-defense to $631 billion.

Trump’s budget proposed increasing defense spending by $34 billion to $750 billion, using a budget gimmick, while allowing non-defense outlays to be cut by $30 billion to $567 billion.

Needless to say, there's no chance in hell that House Democrats would agree to increase defense spending while cutting spending on domestic programs as Trump envisions.

I believe McConnell insisted that the debt ceiling be attached to a spending deal because passing a clean debt ceiling bill by itself would make it too easy for Trump to shut down the government again. McConnell is still interested in maintaining a Republican majority in the Senate and another Trump shutdown would make that more difficult.