Tag Archives: Federal Spending

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.

DEFICIT INCREASE

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)

White House sees good chance of long-term budget deal

Senate Minority Leader Chuck Schumer (D-NY) speaks during a news conference on Capitol Hill in Washington, U.S., February 6, 2018.

By Richard Cowan

WASHINGTON (Reuters) – U.S. lawmakers are expected to unveil “a good, bipartisan deal” on Wednesday that would raise current limits on federal spending for two years, the White House said, as Congress seeks to end fights over spending that have plagued Washington for months.

Higher defense spending expected in the agreement would allow President Donald Trump to make good on his campaign promise for a U.S. military build-up, although the White House is still concerned about non-defense spending levels, White House legislative affairs director Marc Short told MSNBC.

But Nancy Pelosi, the House of Representatives’ Democratic leader, said she would not support such a deal, aimed at lifting some limits on government spending for two years, unless Republican Speaker Paul Ryan promised to advance legislation on immigration. Trump’s fellow Republicans control both chambers of Congress.

Over the past several months, congressional leaders have been negotiating a deal that would raise spending caps for the current fiscal year, which ends on Sept. 30, and the next one for both defense and non-defense programs.

A broad budget deal could ease the brinkmanship over spending that roils Washington so regularly that financial markets barely flinch anymore at the threat of a government shutdown.

“There’s some things that you give and take in a negotiation like this, and so I think this will be a good, bipartisan deal but we’re more excited about the defense spending,” Short said.

Aside from the planned longer-term deal, lawmakers were also trying to reach agreement by Thursday to avoid a shutdown and fund the government until March 23.

“We expect the government is not going to shut down this week,” Short said.

In a further sign of Congress’ inability to get basic work done, the House on Tuesday had to approve another stopgap bill to keep the federal government from shutting down.

Stopgap measures are needed when Congress fails to approve spending on time for a full fiscal year, something it has done only four of the past 40 years, according to congressional researchers.

The Senate was expected to take up the House stopgap legislation as Congress raced to get a finished bill for Trump to sign into law before government funding runs out on Thursday.

If that fails, the U.S. government would experience its second shutdown this year, after a partisan standoff over U.S. immigration policy led to a three-day partial shutdown last month.

Immigration again emerged as a possible point of contention in budget talks when Democrat Pelosi said she would oppose a two-year deal unless the Republican Ryan promised to advance legislation to protect hundreds of thousands of young adult immigrants, known as “Dreamers,” brought to the United States illegally as children.

Republicans are eager to keep spending and immigration separate. But 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.

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

On Tuesday, top Senate Democrat Chuck Schumer said the emerging Senate two-year deal would increase funding for domestic programs like drug treatment and broadband infrastructure that Democrats want, as well as a military spending increase sought by Republicans.

“We’re making progress,” Senator Dick Durbin, the Democratic minority whip, told MSNBC on Wednesday.

Congress must also raise the federal debt ceiling or face defaulting on the government’s bills, and several Republican lawmakers said the matter would be part of Senate budget talks. The U.S. Treasury is expected to run out of borrowing options by late March.

(Additional reporting by Susan Heavey; Editing by Will Dunham)

Trump vows military build-up, hammers nationalist themes

U.S. President Donald Trump addresses the American Conservative Union's annual Conservative Political Action Conference (CPAC) in National Harbor, Maryland. U.S., February 24, 2017. REUTERS/Kevin Lamarque

By Emily Stephenson and Steve Holland

NATIONAL HARBOR, Md./WASHINGTON (Reuters) – President Donald Trump said he would make a massive budget request for one of the “greatest military buildups in American history” on Friday in a feisty, campaign-style speech extolling robust nationalism to eager conservative activists.

Trump used remarks to the Conservative Political Action Conference (CPAC), an organization that gave him one of his first platforms in his improbable journey to the U.S. presidency, to defend his unabashed “America first” policies.

Ahead of a nationally televised speech to Congress on Tuesday, Trump outlined plans for strengthening the U.S. military, already the world’s most powerful fighting force, and other initiatives such as tax reform and regulatory rollback.

He offered few specifics on any initiatives, including the budget request that is likely to face a harsh reality on Capitol Hill: At a time when he wants to slash taxes for Americans, funding a major military buildup without spending cuts elsewhere would add substantially to the U.S. budget deficit.

Trump said he would aim to upgrade the military in both offensive and defensive capabilities, with a massive spending request to Congress that would make the country’s defense “bigger and better and stronger than ever before.”

“And, hopefully, we’ll never have to use it, but nobody is going to mess with us. Nobody. It will be one of the greatest military buildups in American history,” Trump said.

Appealing to people on welfare to go to work and pledging to follow through on his vow to build a wall on the U.S.-Mexican border, Trump drew rounds of applause from the large gathering of conservatives, many of them wearing hats emblazoned with the president’s campaign slogan, “Make America Great Again.”

His speech was heavy on the nationalist overtones from his campaign last year, focusing on promises to boost U.S. economic growth by retooling international trade deals, cracking down on immigration and boosting energy production.

ROCKY FIRST MONTH

Trump is looking to put behind him a rocky first month in office. An executive order he signed aimed at banning U.S. entry by people from seven Muslim-majority countries became embroiled in the courts and he had to fire his national security adviser, Michael Flynn, for Russian contacts before Trump took office.

With the federal budget still running a large deficit, Trump will have to fight to get higher military spending through Congress. In his speech, he complained about spending caps put in place on the defense budget dating back to 2011.

He also heaped criticism on what he called purveyors of “fake news,” seeking to clarify a recent tweet in which he said some in the U.S. news media should be considered an “enemy of the people.”

He said his main beef was the media’s use of anonymous sources. “They shouldn’t be allowed to use sources unless they use somebody’s name. Let their name be out there,” Trump said.

His comments came on the same day CNN reported that White House Chief of Staff Reince Priebus asked FBI Deputy Director Andrew McCabe to deny a Feb. 14 report in the New York Times that said Trump’s presidential campaign advisers had been in frequent contact with Russian intelligence officers. The request came after McCabe told him privately the report was wrong.

A senior administration official said on Friday that FBI Director James Comey told Priebus later that the story was not accurate. Priebus asked if the Federal Bureau of Investigation could set the record straight, but Comey said the bureau could not comment, the official said.

Trump has repeatedly chosen to make news media criticism a focus of his public remarks since taking office on Jan. 20.

The speech allowed Trump to put his stamp firmly on the conservative political movement, even as some activists fretted that his immigration and trade policies go too far.

With Trump in the White House and Republicans holding majorities in both houses of Congress, CPAC and the thousands of conservative activists who flock to the event each year from across the country are seeing their political influence rising.

(Additional reporting by Richard Cowan; Editing by Kevin Drawbaugh and Jonathan Oatis)