Trump, U.S. Congress leaders reach deal on debt limit, spending caps

[webfact]

Trump, U.S. Congress leaders reach deal on debt limit, spending caps

By Richard Cowan

 

FILE PHOTO: A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

 

WASHINGTON (Reuters) - President Donald Trump and U.S. congressional leaders reached a deal on Monday on a two-year extension of the debt limit and federal spending caps that would avert a feared government default later this year but add to rising budget deficits.

 

"I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy," Trump said on Twitter.

 

Schumer and Pelosi promptly issued a statement confirming the agreement, saying the measure would be voted on "swiftly" in the Democratic-led House of Representatives. The Republican-led Senate must also pass the measure before it can be signed into law by Trump.

 

Pelosi has been pushing to win passage by this week, before the start of a long summer recess that extends to Sept. 9.

 

Final details between the Trump administration and congressional leaders were worked out as Pelosi talked by telephone from a delayed commercial flight to Washington following a speech she delivered earlier in the day in Detroit, a Pelosi aide said.

 

Under the agreement, which was the result of weeks of closed-door negotiations, the Treasury Department's borrowing authority would be extended through July 31, 2021. Without legislation, Treasury could bump up against its borrowing limit before Sept. 9, according to some recent estimates, potentially triggering a default on some debt.

 

The pact would also set overall spending levels for the next two years on both defence and non-defence programs operated by the federal government.

 

Under the deal, spending on those "discretionary" programs would rise to $1.37 trillion in the fiscal year starting Oct. 1, up from $1.32 trillion this year, according to a congressional source.

 

In fiscal 2021, spending would rise at a slower pace, to $1.375 trillion.

 

Of the $1.37 trillion next year, military spending would reach a maximum of $738 billion, up from $716 billion this year. Non-defence appropriations would be capped at $632 billion in fiscal 2020, up from $605 billion this year.

 

McConnell, a Republican, praised the pact, saying it "secures the resources we need to keep rebuilding our armed forces," while not specifically mentioning rising non-defence outlays.

 

A senior Democratic aide in Congress noted that if enacted into law, non-defence domestic funding would be $100 billion higher than when Trump took office in January 2017 - a figure likely to bring criticism from conservatives.

 

Earlier on Monday, a source close to the talks said the deal would include about $75 billion in what are being described as partial "offsets" to higher spending over the next two years.

 

'WORST' BUDGET DEAL EVER?

Even before the agreement was announced, some outside experts were criticizing it.

 

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said it "may end up being the worst budget agreement in our nation's history."

 

If enacted into law, she said in a statement, Trump would have increased discretionary spending by as much as 22 percent over the course of his four-year term "and enshrined trillion-dollar deficits into law."

 

Those deficits would accelerate a $22.4 trillion U.S. debt that was already growing in part as a result of tax cuts Trump and his fellow Republicans in Congress approved in 2017.

 

Even with an agreement enacted into law, Congress must pass spending bills to implement it. Lawmakers face a Sept. 30 deadline - the end of the current fiscal year - to pass those bills or temporarily extend current spending while new legislation is brokered.

 

Last December, Republican leaders thought they had a deal with Trump on legislation funding government activities for the current fiscal year. At the last minute, he demanded more money so he could build a wall along the U.S.-Mexico border to keep immigrants from entering the country illegally.

 

Democrats objected to border wall funding and the breakdown led to record-long, partial government shutdowns until Trump relented.

 

If the latest budget deal negotiated by the Trump administration and congressional leaders becomes law, it would mark the final chapter of a 10-year budget law enacted in 2011 that was designed to bring down federal spending through potentially steep across-the-board cuts.

 

But the reductions under the Budget Control Act of 2011 were regularly waived and U.S. deficits are now approaching $1 trillion a year.

(Reporting by Richard Cowan; Editing by Steve Orlofsky and Peter Cooney)

 

-- © Copyright Reuters 2019-07-23

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[Tug]

Always thought the deficit was paid down during strong economic times guess not under trump 

[Thainesss]

8 minutes ago, Tug said:

Always thought the deficit was paid down during strong economic times guess not under trump 

 

Looks like a bipartisan agreement to me, so you can thank your Democratic representatives. 

 

47 minutes ago, webfact said:

Schumer and Pelosi promptly issued a statement confirming the agreement, saying the measure would be voted on "swiftly" in the Democratic-led House of Representatives.

 

[EVENKEEL]

11 minutes ago, Tug said:

Always thought the deficit was paid down during strong economic times guess not under trump 

Sadly it's become the way we operate. Seems no one has a clue on how to live within their means.

[roquefort]

6 hours ago, EVENKEEL said:

Sadly it's become the way we operate. Seems no one has a clue on how to live within their means.

The new economics - debt doesn't matter.

[wwest5829]

6 hours ago, EVENKEEL said:

Sadly it's become the way we operate. Seems no one has a clue on how to live within their means.

Especially when those, "means" have shrunk. I know it would be hard for me to continue to live within my means if my income was cut. That is exactly the case as a result of the Republican tax cuts for the wealthy and corporations.

[candide]

7 hours ago, Tug said:

Always thought the deficit was paid down during strong economic times guess not under trump 

That's how Trump 'buys' extra growth and finances the tax cuts. Before this deal, the debt increase forecast during his term (by his own administration) was around 5 trillion, compared to 3.5 trillion during Obama's last term. After that deal, it will be obviously more than 5 trillion.

 

Cut taxes and increase spending during a period of worldwide growth, I wonder what will still be possibly applied when the next crisis strikes.

[OneMoreFarang]

Imagine the USA would have to pay all that money back and spend a lot less than now.

No US military all over the world anymore - what a wonderful idea.

[metisdead]

An off topic post and a reply has been removed. 

[IAMHERE]

Americans, buy gold and silver.

[Tug]

Guess all those rich people and company’s need a handout at the working mans expense or is it the trump business model of suck it dry then discard?

[lannarebirth]

 

 

Quote

 

Why the GOP keeps losing the fight in budget deals

 

https://www.cnbc.com/2019/07/23/why-gop-keeps-losing-budget-deal-fights.html

 

 

[pegman]

So like, what happened to all those tea-baggers? Their cause sure didn't go away. It's more enormous than ever. Did they just die off? Should a search party be sent out?

[Scott]

Off-topic post removed.  

 

[Paul Henry]

What! Donald must be slipping, he needs to apply his standard business principle to the USA debt. DON'T pay it and tell the Countries they owe the money to we will see you in court and you may get 10c in the $ if I don't declare bankruptcy first. Maybe Dementia has taken hold and he has forgotten how he operates.

[lannarebirth]

7 hours ago, pegman said:

So like, what happened to all those tea-baggers? Their cause sure didn't go away. It's more enormous than ever. Did they just die off? Should a search party be sent out?

 

Here's the thing I never understood about the so called "Tea Party". They're not against spending, they're only against paying for what they have spent. They're deadbeats. That's not to say a lot of people who are in favor of spending a lot have ever paid a dime for the money they wish other people would spend, on them particularly.

 

Me, I paid 22% of my income in FIT and State IT last year (after a ton of write offs). I'm a member of the 10%. I get absolutely no return on the taxes I pay. No health care, which we're afraid to actually use (that's an additional $22,000 -$35,000 dollars p/a), no anything.

 

I would be a moderate Democrat if there were such a thing anymore. Most candidates posturing as moderate Democrats are merely moderate Republicans (anyone remember those) by another name . Instead I support the Progressive wing of the Democrat party. I figure they'll accomplish about 10% of what they may set out to do, hopefully for the benefit of all Americans and not just the particular identity niches they've carved out.

 

 

 

 

[pegman]

28 minutes ago, Paul Henry said:

What! Donald must be slipping, he needs to apply his standard business principle to the USA debt. DON'T pay it and tell the Countries they owe the money to we will see you in court and you may get 10c in the $ if I don't declare bankruptcy first. Maybe Dementia has taken hold and he has forgotten how he operates.

That sounds great until you see this chart. Seems Trump's bankster buddies are the biggest holders of federal USA debt.

 

 

[Srikcir]

7 hours ago, pegman said:

So like, what happened to all those tea-baggers?

The day the tea party died

http://lite.cnn.io/en/article/h_8a66691d78c982eb67ddc4f0be40eb9b

Trumpism, has clearly sped up the death of the movement. He doesn't care about debt and deficit and so now neither do they. The tea party has been left dead by the side of the road, one of the many casualties of the presidency of Donald Trump.

[Srikcir]

16 minutes ago, Paul Henry said:

What! Donald must be slipping, he needs to apply his standard business principle to the USA debt. DON'T pay it and tell the Countries they owe the money to we will see you in court and you may get 10c in the $ if I don't declare bankruptcy first. Maybe Dementia has taken hold and he has forgotten how he operates.

it's not that Trump has forgotten but that he again has no regard for the U.S. Constitution:

• Section Four of the 14th Amendment to the Constitution of the United States says that “[t]he validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

In short U.S. Cannot Constitutionally Default on Its Debt

https://www.cnsnews.com/news/article/us-cannot-constitutionally-default-its-debt-says-constitutional-scholar

Neither Presidential Orders nor any legislation can violate the Constitution.

[pegman]

24 minutes ago, lannarebirth said:

 

Here's the thing I never understood about the so called "Tea Party". They're not against spending, they're only against paying for what they have spent. They're deadbeats. That's not to say a lot of people who are in favor of spending a lot have ever paid a dime for the money they wish other people would spend, on them particularly.

 

Me, I paid 22% of my income in FIT and State IT last year (after a ton of write offs). I'm a member of the 10%. I get absolutely no return on the taxes I pay. No health care, which we're afraid to actually use (that's an additional $22,000 -$35,000 dollars p/a), no anything.

 

I would be a moderate Democrat if there were such a thing anymore. Most candidates posturing as moderate Democrats are merely moderate Republicans (anyone remember those) by another name . Instead I support the Progressive wing of the Democrat party. I figure they'll accomplish about 10% of what they may set out to do, hopefully for the benefit of all Americans and not just the particular identity niches they've carved out.

 

 

 

 

It just might be helpful to look at the lifespan of the Tea Party. It started in 2009 and petered out with the election of Trump. Only coincidence, I'm sure, but wasn't that when the black guy held the White House? Could one of the former tea bagger debt Hawks, present free spenders, enlighten us please?

[Thainesss]

21 minutes ago, lannarebirth said:

Here's the thing I never understood about the so called "Tea Party". They're not against spending, they're only against paying for what they have spent. They're deadbeats. That's not to say a lot of people who are in favor of spending a lot have ever paid a dime for the money they wish other people would spend, on them particularly.

 

Me, I paid 22% of my income in FIT and State IT last year (after a ton of write offs). I'm a member of the 10%. I get absolutely no return on the taxes I pay. No health care, which we're afraid to actually use (that's an additional $22,000 -$35,000 dollars p/a), no anything.

 

I would be a moderate Democrat if there were such a thing anymore. Most candidates posturing as moderate Democrats are merely moderate Republicans (anyone remember those) by another name . Instead I support the Progressive wing of the Democrat party. I figure they'll accomplish about 10% of what they may set out to do, hopefully for the benefit of all Americans and not the particular identity niches they've carved out.

 

Probably the most objective post you'll ever see on this forum right here ^

 

And it will be shocking to know I am also what used to be referred to as a "Moderate Democrat" but where you took todays politics and went far left, I went to the right, which isn't really even to the right at all, its just inline with what the Democrats USED to be, reaching back to Roosevelt. 

 

I dont agree with this spending deal, but the previous admin put, what, 8.5 trillion on the debt clock. Bush added a ton too but it was because of war which an OVERWHELMING majority supported, almost 80% of the population. 

 

We are both in the 10%, and what infuriates me is that if the far left gets what they want, even 10%, my income is going to drop, big time. And the returns on that drop are not defined at all. So the end of the day I believe its better to keep my money rather than give it away to a politician promising free everything. History has proven time and time again that giving away what you earned for the 'promise' of 'free!' never ends well. 

[Tug]

20 minutes ago, Srikcir said:

it's not that Trump has forgotten but that he again has no regard for the U.S. Constitution:

• Section Four of the 14th Amendment to the Constitution of the United States says that “[t]he validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

In short U.S. Cannot Constitutionally Default on Its Debt

https://www.cnsnews.com/news/article/us-cannot-constitutionally-default-its-debt-says-constitutional-scholar

Neither Presidential Orders nor any legislation can violate the Constitution.

But you have to get Donald to read the constitution lol and we know how well he does that lol

[zydeco]

On 7/23/2019 at 6:49 AM, webfact said:

Trump would have increased discretionary spending by as much as 22 percent over the course of his four-year term "and enshrined trillion-dollar deficits into law."

But the "King of Debt" will exit the White House and leave everyone else holding the bag. That is how he works. He walks away with the profits and anybody who is stupid enough to work with him or trust him is left financially ruined. It's the Trump way.

[RocketDog]

18 hours ago, roquefort said:

The new economics - debt doesn't matter.

Correct. Until one day it does matter. But that's not today, so carry on.

 

The final verdict will be global repudiation of all sovereign debt, sending countless trillions to money heaven.

There is no other solution when fiat currency is finally reduced to being worth less than it costs to print it.

[bristolboy]

29 minutes ago, RocketDog said:

Correct. Until one day it does matter. But that's not today, so carry on.

 

The final verdict will be global repudiation of all sovereign debt, sending countless trillions to money heaven.

There is no other solution when fiat currency is finally reduced to being worth less than it costs to print it.

I well remember the predictions during the Great Recession the QE and deficit spending was going to bring on hyperinflation. Instead inflation remained at record lows.

[bendejo]

1 hour ago, lannarebirth said:

Here's the thing I never understood about the so called "Tea Party". They're not against spending, they're only against paying for what they have spent. They're deadbeats. That's not to say a lot of people who are in favor of spending a lot have ever paid a dime for the money they wish other people would spend, on them particularly.

 

The Tea Party was a farce, a big-money political movement disguised as a grass-roots uprising.  Koch Brothers pulled the strings, the dummy puppet was named Dick Armey.  You flatter them to imply the members actually had a cohesive agenda.  It was the "mad as hell and we're not going to take it anymore" movement, the members of which became DT's followers.  Now they are the MAGA hat party.

 

 

[bristolboy]

1 hour ago, Thainesss said:

 

Probably the most objective post you'll ever see on this forum right here ^

 

And it will be shocking to know I am also what used to be referred to as a "Moderate Democrat" but where you took todays politics and went far left, I went to the right, which isn't really even to the right at all, its just inline with what the Democrats USED to be, reaching back to Roosevelt. 

 

I dont agree with this spending deal, but the previous admin put, what, 8.5 trillion on the debt clock. Bush added a ton too but it was because of war which an OVERWHELMING majority supported, almost 80% of the population. 

 

We are both in the 10%, and what infuriates me is that if the far left gets what they want, even 10%, my income is going to drop, big time. And the returns on that drop are not defined at all. So the end of the day I believe its better to keep my money rather than give it away to a politician promising free everything. History has proven time and time again that giving away what you earned for the 'promise' of 'free!' never ends well. 

Well if you believe what Democrats believed going all the way back to Roosevelt, then you would be supporting much higher higher taxes on the wealthy, not complaining about it. Those Democrats believed in a strongly progressive income tax.

 

And your complaints about Obama adding 8.5 trillion to the national debt are also ludicrous. It was Roosevelt who first applied Keynesian principles and ran up a big debt. Like Obama he was faced with an economic catastrophe.

 

Yours is just more concern trolling You pretend to have once been a Democrat, to make your comments more believable. But given your stance on these issues, your claim is clearly false. 

[lannarebirth]

2 minutes ago, bristolboy said:

Well if you believe what Democrats believed going all the way back to Roosevelt, then you would be supporting much higher higher taxes on the wealthy, not complaining about it. Those Democrats believed in a strongly progressive income tax.

 

And your complaints about Obama adding 8.5 trillion to the national debt are also ludicrous. It was Roosevelt who first applied Keynesian principles and ran up a big debt. Like Obama he was faced with an economic catastrophe.

 

Yours is just more concern trolling You pretend to have once been a Democrat, to make your comments more believable. But given your stance on these issues, your claim is clearly false. 

 

The so called "Great Recession" was merely a marketing term. While it's true that some people suffered through this period; most especially those who overpaid for homes or acceded to predatory lending life was m/l normal for the great majority of people. Not so during the Depression which changed peoples lives over generations, both for good and for ill.

[zydeco]

51 minutes ago, bristolboy said:

I well remember the predictions during the Great Recession the QE and deficit spending was going to bring on hyperinflation. Instead inflation remained at record lows.

Except for the asset inflation in the stock markets. And except for the way "inflation" is determined.  "Hedonic adjustment."  heh, heh, heh. Where the government explains that the TV you paid $1500 for actually costs less than the one you paid $300 for a few years earlier.

[Srikcir]

2 hours ago, Thainesss said:

the previous admin put, what, 8.5 trillion on the debt clock.

By 2014 Barack Obama had gotten our deficits to half of what they are today under Donald Trump, despite the Great Recession. Because of the sequestration deal that was just taken off the books in this latest budget deal, Obama presided over a reduction in discretionary government spending of nearly 2% per year in his second term.

The epic hypocrisy of the GOP on deficits and debt

http://lite.cnn.io/en/article/h_8b3a9b508422496b7c29042fcd3eddaa