Congress, White House Near Two-Year Debt Limit, Spending Deal
(Bloomberg) -- Congress and the White House are finalizing an agreement that would raise the debt limit until July 2021 and increase government spending for two years, according to a person briefed on the discussions.
Time is running short for the House to vote on the deal before they leave for a six-week recess on July 26. While House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued talks over the weekend by telephone, the question remains whether President Donald Trump will sign the deal.
A key point under negotiation is the Trump administration’s initial demand for as much as $150 billion in long-term spending cuts to attach to the deal. The deal that is in the final stages of negotiation would offset about $75 billion of the spending increase, the person said.
Mnuchin warned that the U.S. risks missing debt payments in early September -- before lawmakers are scheduled to return to Washington after their summer recess. Both sides have sought to reassure markets that Congress won’t let the U.S. run up against the debt limit and trigger a default, but lawmakers are still trying to include a budget agreement in the negotiation.
If the budget negotiations can’t be concluded in time, lawmakers may decide to pass a debt ceiling extension into October. That would avoid the risk of a default in the short-term but would extend uncertainty for markets.
--With assistance from Riley Ray Griffin.
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