White House Predicts Congress Will Approve Government Financing Deal
The White House predicted Tuesday that Congress would approve a critical new agreement restoring the government’s ability to pay its bills for the next two years by suspending the country’s debt ceiling and at the same time setting annual spending limits through 2021.
“I think it’s a deal that will get through,” said White House economic adviser Larry Kudlow. “I think people are signing on. Democrats and Republicans. It isn’t everything we hoped for, but it got through the debt ceiling. That’s so important, we’re not going to default on American securities.”
The agreement reached Monday between President Donald Trump and top Republican and Democratic congressional leaders is likely to avert another partial government shutdown like the 35-day standoff that shuttered many operations late last year and into January. But contentious spending issues on specific items could still emerge in the days before 2019 budgets for government agencies expire at the end of September.
The pact calls for $1.37 trillion in agency spending in the fiscal year starting Oct. 1 and slightly more in 2021, with more funding for the military and domestic social programs.
Both Republican and Democrat lawmakers in Washington have railed against the country’s chronic overspending. The government has not had a balanced, no-deficit budget — when tax receipts equal spending — since 2001, and there have only been five such years since the 1960s.
With the country’s current $22 trillion debt ceiling lifted for two years, the long-term debt total will continue to increase as government spending in Washington surpasses the tax revenues it collects from individuals and businesses, perhaps adding another $2 trillion over the next two years.
‘Abdication of fiscal responsibility’
Maya MacGuineas, president of the Committee for a Responsible Federal Budget in Washington, called the new agreement “a total abdication of fiscal responsibility by Congress and the president.”
“It may end up being the worst budget agreement in our nation’s history, proposed at a time when our fiscal conditions are already precarious,” she added.
According to MacGuineas, “Trump will have increased discretionary spending by as much as 22 percent over his first term, and enshrine trillion-dollar deficits into law.” She added that Congress should cancel its annual August recess and “return to the negotiating table for a better deal. If they don’t, those who support this deal should hang their heads in total shame as they bolt town. This deal would amount to nothing short of fiscal sabotage.”
Senator Ted Cruz, a conservative Texas lawmaker, also assailed the White House accord with congressional leaders, calling it “yet another missed opportunity to rein in excessive government spending.”
“This deal irresponsibly jacks up spending by $320 billion without real offsets [in spending cuts], and suspends the debt limit into 2021,” Cruz said. “Instead of finally dealing with our nearly $1 trillion deficit and $22 trillion debt, this deal just kicks the can down the road again.”
Praise for deal
Trump in the past sharply criticized big spending packages, but said on Twitter that he was pleased with the new deal.
“This was a real compromise in order to give another big victory to our Great Military and Vets!” Trump said on Twitter.
The two top congressional Democrats, House Speaker Nancy Pelosi and Senate minority leader Chuck Schumer, said the deal “will enhance our national security and invest in middle-class priorities that advance the health, financial security and well-being of the American people.”
Kudlow said, “We were able to keep out any restrictions on our deregulation efforts, which is very important to us. Defense strength was maintained. No restrictions on border activity. So, it’s a pretty good deal under the circumstances, that’s the way I would put it.”
He described the spending increases, both for defense programs favored by Trump and Republicans, and domestic social welfare programs advanced by Democrats, as “very modest.”
“Right now jobs are booming and consumer spending is really booming,” Kudlow said, “so that bodes very well for the economy, for the prosperity cycle, and also to in the longer term get those deficits down.”