Senate leaders in a rare display of bipartisanship, reach $300 billion federal spending deal

U.S. Sen. Lindsay Graham speaks to reporters outside the Senate chamber on Capitol Hill in Washington, U.S. February 7, 2018.

By Richard Cowan and Amanda Becker

WASHINGTON (Reuters) – U.S. congressional leaders, in a rare display of bipartisanship, on Wednesday reached a two-year budget deal to raise government spending by almost $300 billion, attempting to curb Washington’s fiscal policy squabbling but also widening the federal deficit.

The agreement, announced by the Republican and Democratic leaders of the Senate and House of Representatives, would lift caps on defense funding and some domestic spending. It also would postpone a reckoning with the federal debt limit.

Along with President Donald Trump’s tax cuts that were approved by Congress in December, the new round of spending would further add to the bulging deficit and may face resistance in the House from Democrats as well as Republican fiscal hawks.

“This bill is the product of extensive negotiations among congressional leaders and the White House,” Senate Majority Leader Mitch McConnell, a Republican, said on the Senate floor.

The plan will need to be passed in the House and the Senate, both controlled by Trump’s fellow Republicans, before it can be sent to the White House for the president to sign into law.

House Democrats have warned they will not back the deal unless Republican House Speaker Paul Ryan promises to advance separate legislation on immigration policy.

Chuck Schumer, leader of the Senate Democrats, touted the deal, saying, “It should break the long cycle of spending crises that have snarled this Congress and hampered our middle class.”

The defense spending increase in it should allow Trump to make good on his campaign promise for a military build-up.

The White House said the deal includes an extension, until March 2019, of the government’s debt ceiling. The Treasury Department has been warning that without an extension in borrowing authority from Congress, the government would run out of borrowing options in the first half of next month, risking an unprecedented debt default.

The agreement also funds disaster relief, infrastructure and programs addressing opioid abuse, the Senate leaders said.


White House legislative affairs director Marc Short said the deal would increase spending by “just shy” of $300 billion.

A senior congressional aide said this amount of additional spending would not be offset by any spending cuts or new tax revenue, meaning an increase in the federal deficit.

“This really is the moment where it has become clear that despite record levels of debt and approaching trillion dollar deficits, Congress has stopped caring about what they’re doing to the fiscal health of the country,” said Maya MacGuineas, head of the Committee for a Responsible Federal Budget, a group that advocates for long-term fixes to Washington’s debt problems.

Aside from the budget deal, lawmakers were also trying to reach agreement by Thursday to avoid a government shutdown and fund the government until March 23. If that fails, the U.S. government would suffer its second shutdown this year, after a partisan standoff over immigration policy led to a three-day partial shutdown last month.

In financial markets, yields on benchmark 10-year notes rose on news of the budget deal, on expectations of higher growth and potentially greater Treasury supply.

A large uptick in issuance is expected after Congress raises the debt ceiling, which along with higher inflation expectations has weighed on bonds in the past week.

A congressional source familiar with the agreement said it would increase non-defense spending by $131 billion and include $20 billion for infrastructure spending. It also would extend funding for the Children’s Health Insurance Program (CHIP) for 10 years instead of the current six, the source added.

Passage of the plan would ease the brinkmanship over spending that roils Washington so regularly that financial markets barely flinch at the threat of a government shutdown.

Immigration again emerged as a possible point of contention. House Democratic leader Nancy Pelosi, who helped negotiate the accord, nevertheless said she would oppose it unless Ryan promises to advance legislation to protect hundreds of thousands of young adult immigrants, known as “Dreamers,” brought to the United States illegally as children.

January’s shutdown came after Democrats sought to have a spending bill include protections for the Dreamers that Trump has rescinded effective in March.

Republicans are eager to keep spending and immigration separate. Trump threatened on Tuesday to upend budget talks by saying he would welcome a government shutdown if Congress were not able to agree to changes in immigration law that he said would prevent criminals from entering the country.

(Additional reporting by David Morgan, Susan Heavey and Doina Chiacu in Washington and April Joyner in New York; Writing by Alistair Bell; Editing by Will Dunham)

With no deal on children’s health plan, U.S. states scramble for Plan B

With no deal on children's health plan, U.S. states scramble for Plan B

By Jilian Mincer and Yasmeen Abutaleb

NEW YORK/WASHINGTON (Reuters) – For Nancy Minoui of Portland, Oregon, and Crystal Lett of Dublin, Ohio, Congress’ failure to fund the Children’s Health Insurance Program is not some distant tale of political wrangling.

For Minoui, it’s about how to provide care for her daughter, Marion Burgess, born last Valentine’s Day with a hole in her heart. For Lett it’s about providing care for her 6-year-old son, Noble, who was born with a complex genetic disorder.

They are among thousands of parents across the country scrambling to look after low-income children whose medical care is funded by a traditionally bipartisan program, known as CHIP, that is now facing a shutdown after Congressional Republicans tied its fate to other legislative battles.

U.S. states, which administer the program but rely on federal funds, and healthcare providers are now preparing for the shutdown they had desperately hoped to avoid.

Virginia began on Tuesday sending notices to tens of thousands of families that the 20-year-old program would close by Jan. 31 without new federal funding. Connecticut is due to mail similar notices this week.

More than a dozen states, including New York and Utah, are poised to send warning notices to families by the end of this month.

Some hospitals and medical providers are encouraging patients to schedule additional doctor appointments and refill prescriptions before the deadline. Others, like the Texas Children’s Hospital, are identifying families with the most seriously ill children, including cancer patients and transplant recipients, to help obtain alternate coverage.

CHIP provides health benefits to almost 9 million children whose families earn too much to be eligible for Medicaid but cannot afford private insurance, and has enjoyed bipartisan support since it was enacted in 1997.

But this year, funding for the program expired on Sept. 30. Congressional Republicans have tied its fate to other legislative battles, including attempts to repeal Obamacare and a newer effort to overhaul the U.S. tax system.

Lawmakers had hoped to pass a five-year CHIP funding extension before they adjourned for the year. But aides in the House of Representatives and the Senate say they may not get to it until early 2018.

In the meantime, states have been spending down whatever was left of their CHIP funds, and some have received temporary relief from a $3 billion reserve.

Minnesota became the first state to run out of money altogether in November, and is keeping the program afloat from its own budget, projecting a $178 million deficit if Congress does not act next year.

Oregon expects to run out of federal money before the end of 2017, while Colorado was the first to begin notifying families of a Jan. 31 cutoff in late November.

A third of states expect to exhaust funds by the end of January, and an additional 21 expect to run out by the end of March, according to the Kaiser Family Foundation. More than 1.2 million children are expected to lose health benefits if funding is not restored in 2018.

“We are spending a ridiculous amount of time and energy trying to kick Congress in the seat of their pants to get this done,” Oregon Governor Kate Brown, a Democrat, said in an interview.


Hospitals have convened emergency meetings to see how they can salvage care for seriously ill patients, and determine their own financial hit from covering more uninsured children, according to interviews with nearly a dozen hospital officials.

“No child should be the pawn of politics,” said Dr. Judy Aschner, physician-in-chief of Children’s Hospital at Montefiore in New York City. “We provide all levels of care to children and their families, regardless of ability to pay, and will continue to do so whatever the outcome for CHIP.”

Denver Health Medical Center sent letters last week to 9,500 patients, encouraging them to schedule exams and refill prescriptions before the deadline. Dr. Meg Tomcho, a pediatrician affiliated with the hospital, plans to work additional shifts and write prescriptions for three months rather than one to accommodate families.

Jill Pidcock of Glenwood Springs, Colorado, scheduled early appointments for her two sons. She and her husband dropped their health insurance a few years ago, and CHIP has made a huge difference, particularly for her 14-year-old, who has autism.

Minoui, of Portland, Oregon, said her 10-month-old daughter may need heart surgery in the coming months.

“It’s hard enough when your child is sick and you’re waiting to see if they can get well, let alone waiting to see if you’re going to be covered,” Minoui said.

State officials have debated when to notify families, hoping that Congress would come through and spare them anxiety. Some must meet state laws requiring 30-day or 60-day advance notice of the program’s shutdown.

Lett, of Dublin, Ohio doesn’t know how she will afford care for her son, Noble, who, because of his complex genetic disorder Prader-Willi Syndrome, requires daily growth hormone injections, numerous doctor visits and multiple therapy sessions each week.

Lett works two part-time jobs in order to have flexibility for his many appointments.

“We’re holding onto the hope that they will do the right thing by our family and everybody else’s family,” she said.

(Reporting by Jilian Mincer in New York and Yasmeen Abutaleb in Washington; Editing by Michele Gershberg and Leslie Adler)