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White house and congress reach agreement on expenses, debt ceiling



Congress negotiators and the White House reached an agreement to increase federal spending and raise government borrowing limits, ensuring a two-party compromise to avoid an overall financial crisis over the conservative pledges of the plenary and administration which had required deep cuts in spending.

Speaker Nancy Pelosi and Finance Ministry Steven Mnuchin negotiated the agreement for weeks in the hope of finalizing an agreement before the House leaves Washington at the end of the August recess. Mr Mnuchin had warned that the government could exceed its loan limit as soon as in early September, before legislators return from the recess. The conversation continued on Monday.

In a joint statement, Mrs Pelosi and Senate's democratic minority leader Chuck Schumer promised that the House would quickly come to the floor. They stressed that the agreement increases both defense and domestic spending and said they had agreed to spend the offset as "part of a previous two-party deal."

President Trump in a tweet late on Monday said an agreement had been reached with congressional leaders.

Earlier in the day, negotiators had discussed an agreement that would increase spending by about $ 320 billion over the limits set by a law in 2011, with domestic and military spending increasing by equal amounts, according to people known to the discussions. It would postpone the debt limit for two years, two of the people said. Almost $ 80 billion in the spending agreement will be offset by other savings, according to others familiar with the case. Conversation on Monday morning focused on technical language, said one of the people familiar with the compensations.

Possible savings that were discussed included extending automatic cuts to Medicare as well as increasing customs and border protection fees, another person familiar with offset says. Both options have been used in previous budget agreements. The Medicare cuts, which reduce payments to service providers for Medicare patients, are currently terminating at the end of the fiscal year 2027.

Some conservative Republicans called on President Trump to reject any agreement without significant cuts in spending, spreading further uncertainty in the negotiations against a agreement with only five days to go until the House leaves Washington for its August recess.

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Rep. Mike Johnson (R., La.), Chairman of the Conservative Republican Study Committee, a group of about 150 conservative Republicans, spoke to Trump on Saturday about his concerns about the budgetary developments that are still evolving.

Believe that the White House and Congress Leadership should be prepared to abandon this as needed, "Johnson said in an interview. "I am encouraged after talking to the president."

Treasury Secretary Steven Mnuchin, who led negotiations for the administration, said last week that both sides – Republicans are controlling the White House and the Senate while the Democrats are controlling the house – had agreed to raise the debt ceiling over two years and determine expenditure levels, but not for how to pay for the increases above the limits set in a law in 2011.

Mr. Johnson and other members of the Conservative Group want the cost of each contract to be fully offset by other cuts in spending and include an extension of the limits set by the 2011 law.

With Congress beginning to leave until August, July 26 and not back until September, the competition is to approve an expense agreement and raise the debt ceiling. WSJ's Kate Davidson looks at the remaining obstacles. Photo: Bloomberg

Administration officials have stated that they want to reach an agreement that will receive support from house republicans. The Trump administration had stated that it would not accept less than $ 150 billion in spending cuts, and provided a list of potential compensations that a democratic assistant near the call has called "nonstarters."

Behind the negotiations on spending levels is federal loan limit. Mr Mnuchin has said that the US may run out of cash in early September, before legislators return from a summer retrenchment and press negotiators to reach an agreement this week. If the government's ability to borrow becomes limited, it can start to miss payments on obligations such as social insurance and veterinary benefits or interest on the debt.

House conservatives want the president to follow the advice of the operating staff head of the White House Mick Mulvaney and Russell Vought, acting head of the office of management and budget, both of whom have requested cuts. The Senate Grant Committee Chairman Richard Shelby (R., Ala.) Said he is hopeful that Trump has entrusted negotiations to Mr. Mnuchin.

"I think the secretary has come and immediately and is trying to avoid a disaster on the debt threshold and even on grants," Shelby said. "I think he has been a rational voice."

Rep. Chip Roy (R. , Texas), who wrote a letter signed by more than 40 republicans earlier this year advocates keeping spending within the limits set in 2011 law, said he has spoken to gentlemen Mulvaney and Vought about the negotiations.

"The President should listen to Mick Mulvaney and Russ Vought, and he shouldn't listen to Steven Mnuchin, period, "Roy said. He added that his Republican colleagues in the Senate were not sufficiently involved in reducing spending." Senate Republicans will never find a corner where they can go and hiding, "he added.

This set of spending negotiations is not the first complicated of differences between Republicans. Last year, a recent action passed to keep the government open later but was rejected by Trump, who withdrew his support and urged the republicans to adopt legislation with more funding for a border. It led to the longest government stoppage in US history.

Later, Trump has shown a willingness to join Senate Republicans, who have to work with the House Democrats to get the spending through Congress. After months of hassle over disaster financing, Trump accepted a compromise to provide additional money to Puerto Rico and address a humanitarian aid border package for the southern border separately.

Treasury Secretary Steven Mnuchin left a meeting with top congress leaders about a potential deal to raise the budget capsules in May.


Photo:

J. Scott Applewhite / Associated Press

To get Trump to join the disaster relief agreement called Sens Shelby and David Perdue (R., Ga.) To encourage him to accept the deal. Two prominent conservatives, ropes. Jim Jordan (R., Ohio) and Mark Meadows (R., NC) were at the Oval Office during the call and urged him to oppose it, according to a person familiar with the conversation. [19659004] The first proposals from the administration to maintain the current levels of expenditure for another year lost rapidly the benefit of the Senate Republicans, who warned of the consequences for increased military spending if no budgetary agreement is reached.

"I think the outcome of all these different voices will mean that the outcome here remains uncertain until the law is adopted," said Shai Akabas, Bipartisan Policy Center's Chief Financial Officer, a thinker in Washington.

Write to Catherine Lucey at catherine.lucey@wsj.com, Andrew Duehren at andrew.duehren@wsj.com and Kate Davidson at kate.davidson@wsj.com

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