- The Washington Times
Thursday, July 18, 2019

The Trump administration and Democratic negotiators said Thursday they’re closer to a two-year budget deal that also raises the debt ceiling but added that sticking points remain, notably how to offset spending.

Treasury Secretary Steven Mnuchin said the parties agreed to top-line spending numbers for both years.

“We’re now discussing offsets, as well as certain structural issues,” he told CNBC’s “Squawk Box.”

Negotiators are trying to settle the nation’s finances before Congress departs for its August recess later this month. They want to avoid default on interest payments on the federal debt by increasing the debt limit, and they need to set top-line spending levels to avoid automatic cuts in January.

Sealing a budget deal would also stave off another government shutdown at the end of the fiscal year on Sept. 30, after a 35-day impasse earlier this year upended Washington and embarrassed Mr. Trump.

“I think that nobody wants a shutdown in any scenario,” Mr. Mnuchin said.

House Speaker Nancy Pelosi says she wants to get a deal by late Friday, so she can put the package on the House floor next week — before members leave town. She also wants the Senate to have enough breathing room to get through its arcane procedures and pass the package.

Mrs. Pelosi told reporters Thursday the deal is “alive” and that she believes Mr. Mnuchin speaks for the administration.

Yet Mr. Trump will be the wild card in the debate, especially if House conservatives urge him to hold back support for the emerging deal.

His chief of staff, Mick Mulvaney, built his career as part of a group of House Republicans that crusaded against increased spending.

Also Thursday, a crop of Senate Republicans urged the president to stand by his pledge to veto any budget deal that uses add-ons, or “riders,” to erode federal pro-life policies, such as the longstanding Hyde Amendment barring the use of taxpayers funds for abortion, and a ban on D.C.’s use of local funds for elective abortions. They also don’t want to see money earmarked for Planned Parenthood or measures that encourage the use of fetal tissue in research.

“As members of the pro-life majority in the United States Senate, we will strongly oppose each of these anti-life poison pill riders and will work to ensure they are not inserted into any appropriations bill before the Senate, either in committee or on the floor,” said the letter led by Sen. Steve Daines, Montana Republican.

Mr. Mnuchin said budget deal or not, he will make sure the U.S. does not default on its debt-service payments this fall.

Under the “most conservative scenario,” he said, the U.S. would run out of borrowing authority by the start of September. Default could be catastrophic, sending ripples through global markets.

“I don’t think the market should be concerned,” Mr. Mnuchin told CNBC. “I think everybody is in agreement that we won’t do anything that puts the U.S. government at risk in terms of our issue of defaulting.”

“We’re working hard,” he said. “We’ll get there one way or another.”

The White House said the Treasury secretary has been regularly briefing the president on the negotiations.

Mr. Trump had little to say about negotiations during a White House event Thursday, except that his predecessor had added tremendously to the debt, making his life harder.

“That’s what we got stuck with,” Mr. Trump said.

The Committee for a Responsible Federal Budget, a watchdog group, offered a demand as the parties work it out: Any a lift in the debt ceiling, it said, shouldn’t be an excuse to borrow more.

“A debt ceiling increase should most certainly not include increasing the budget caps in a manner that would increase the debt,” said CRFB President Maya MacGuineas. “A plan to support increasing the debt ceiling while simultaneously increasing the debt makes a mockery out of budgeting and the fiduciary responsibility our leaders are supposed to demonstrate.”

⦁ Gabriella Muñoz contributed to this report.

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