WASHINGTON (Reuters) – U.S. Senate Majority Leader Mitch McConnell said on Tuesday he hoped Congress could reach by the end of the day a two-year agreement on federal spending limits that would also increase the nation’s debt ceiling.
FILE PHOTO – Senate Majority Leader Mitch McConnell speaks with reporters following the weekly policy luncheons on Capitol Hill in Washington, U.S., May 7, 2019. REUTERS/Aaron P. Bernstein
“Our hope is to make a deal before the day is over,” McConnell, a Republican, told reporters. “The agreement would be a two-year caps deal, which would allow us to go forward with some semblance at least of a regular appropriations process. It would also in all likelihood include the debt ceiling.”
The U.S. Treasury later this year is expected to exhaust its statutory borrowing authority amid heavy deficit spending by the federal government. Democrats have been pushing for an increase in the debt ceiling as part of the negotiations on overall spending caps.
The four top Democrats and Republicans in the House of Representatives and Senate, along with Treasury Secretary Steven Mnuchin and Acting White House Chief of Staff Mick Mulvaney, met for nearly two hours earlier on Tuesday in House Speaker Nancy Pelosi’s office – a far longer meeting than had been anticipated.
Immediately after that meeting, Senate Democratic Leader Chuck Schumer told reporters that progress was made but that there were differences to be resolved.
“We have certain domestic needs that are very important to us,” Schumer said.
At a press conference later on Tuesday, Schumer said it remains to be seen whether President Donald Trump would back a pact if one emerges from the negotiations.
In the past, Trump at the last minute has criticized some arrangements that congressional negotiators thought had his support.
Without a bipartisan deal on new budget caps, military spending would drop to around $576 billion in the fiscal year starting Oct. 1, a $70.8 billion reduction from this year.
Non-defense spending would fall to $543.2 billion, a nearly $53.8 billion cut from this year.
Failure to reach a bipartisan deal on spending could set up another showdown between Congress and the White House in September like the ones late last year and early this year that resulted in partial government shutdowns.
And without legislation to extend Treasury’s borrowing authority, Washington would be flirting with a U.S. default on its debt, which would shake global financial markets.
Even with an agreement for the next two years on overall spending levels, the House and Senate still have to pass a series of appropriations bills to carry out the accord.
Reporting Richard Cowan, Amanda Becker and Doina Chiacu; editing by Mohammad Zargham and Jonathan Oatis