Trump, Democrats split differences in two-year budget deal

Negotiators are still working on some ‘technical language’ issues

Treasury Secretary Steven Mnuchin has been updating President Donald Trump on talks between him and Speaker Nancy Pelosi on a potential deal on spending caps and the debt limit. (Tom Williams/CQ Roll Call file photo)

Updated 4:15 p.m. | The White House and congressional leaders are close to unveiling a spending and debt limit deal that would boost funding levels by nearly 4 percent across federal agencies, wiping out the 10 percent cuts that were scheduled to take effect under current law.

According to sources familiar with the proposal, the deal calls for a topline defense figure of $738 billion in fiscal 2020, or slightly higher than the House Democrats’ initial request for $733 billion, but short of the Trump administration’s $750 billion request, which includes cap-exempt accounts for troops serving in conflict zones overseas.

That figure compares with $716 billion appropriated in fiscal 2019, a $22 billion or 3.1 percent boost above the current year.

Nondefense funding, including an extra $2.5 billion for one-time costs associated with the 2020 census, would total $632 billion in fiscal 2020. While that is $15 billion less than House Democrats initially sought, it still represents a substantial boost of nearly 4.5 percent above the comparable fiscal 2019 numbers.

Funding levels for fiscal 2021, the final year of tight budget limits under the 2011 deficit reduction law, would be $740.5 billion for defense accounts and $634.5 billion for nondefense, according to sources.

The agreement wasn’t yet finalized as negotiators were still working on some “technical language” issues, according to a source familiar with the talks. The source added the “near-final” agreement is truly bipartisan because “both sides will be unhappy with some” of its elements.

The pact would include about $77 billion in offsets, very similar to those included in the 2018 two-year spending agreement that both parties agreed to. Those provisions included extending automatic cuts to mandatory programs currently set to expire in 2027, as well as an extension of expiring Customs fees assessed on cargo and passengers arriving in the U.S. Both provisions would be extended for two years.

Speaking to reporters in the Oval Office on Monday, President Donald Trump said his negotiators were still “talking about it” but that “we’re having very good talks with” Speaker Nancy Pelosi, D-Calif.

“We are, I think, doing very well on debt [limit],” Trump said. “And I think we’re doing pretty well on a budget.”

Added Trump: “Very important that we take care of our military. Our military was depleted.”

The emerging deal would suspend the debt ceiling until July 31, 2021.

If Trump signs off on the agreement, it would put an end to the discretionary spending cuts imposed under the 2011 deficit reduction law that members of both parties have agreed to raise for the past six fiscal years.

Negotiations during the past few weeks have predominately been between Pelosi and Treasury Secretary Steven Mnuchin, who has been regularly briefing Trump as well as congressional Republicans.

Kellie Mejdrich contributed to this report.

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