Pelosi: No debt increase until spending limits are raised

[Swordsmyth]

Speaker Nancy Pelosi said Thursday that the Democratic-controlled House won't pass must-do legislation to increase the government's borrowing cap until the Trump administration agrees to boost spending limits on domestic programs.The California Democrat said she'll agree to increase the so-called debt ceiling, which is needed to avoid a market-cratering default on U.S. government obligations this fall. But she says she'll do so only after President Donald Trump agrees to lift tight "caps" that threaten both the Pentagon and domestic agencies with sweeping budget cuts.
"When we lift the caps then we can talk about lifting the debt ceiling — that would have to come second or simultaneous, but not before lifting the caps," Pelosi told reporters.
Treasury Secretary Steven Mnuchin, who is leading negotiations for the administration instead of hard-liners like acting White House budget chief Russell Vought, shares Pelosi's sentiments, though his top priority is to increase the borrowing cap.
"If we reach a caps deal, the debt ceiling has to be included," Mnuchin said Wednesday.
Vought, for years an activist with the conservative Heritage Foundation's policy advocacy arm, took a more aggressive tack after Pelosi's announcement.
"Democrats' threat to hold the debt limit hostage to trillions in new spending is reckless and irresponsible, risking America's full faith and credit," Vought wrote on Twitter.
Her remarks came as bipartisan negotiations to increase the spending limits have sputtered, though Senate Majority Leader Mitch McConnell, R-Ky., is eager for an agreement. A pair of negotiating sessions last month generated some initial optimism but there hasn't been any visible progress since.
"We were making some progress but then they kind of backed away from it," Pelosi said.
At issue are two separate needs that are often linked together.
Probably most important is to increase the government's almost $22 trillion debt so that it can borrow money from investors and foreign countries such as China to redeem government bonds, pay benefits such as Social Security, and issue paychecks to federal workers. Treasury is using a familiar set of bookkeeping tricks to stay within the existing debt limit but Congress has to act by mid-fall to avoid a first-ever default.
Increasing the spending caps is required to set an overall limit for agency budgets appropriated by lawmakers every year to permit the annual round of appropriations bills, expected to total more than $1.3 trillion, to advance with bipartisan support in both the House and Senate.
Any budget deal would represent the fifth two-year budget agreement since a 2011 budget and debt bill set the stage for much-reviled automatic cuts known as sequestration. Without an agreement, government-wide automatic cuts of $125 billion would slap both the military and domestic agencies.
In his March budget submission, Trump employed bookkeeping gimmicks to protect the defense budget and called for sweeping cuts to domestic programs.

More at: https://news.yahoo.com/pelosi-no-deb...155704167.html

[Zippyjuan]

https://www.vox.com/2019/5/22/186355...bt-limit-trump

Congress’s high-stakes budget fight to avert an economic crisis, explained


The deadlines are building; unless Congress acts, the United States is on a path to economic crisis. But Democrats still don’t see a willing negotiator in President Donald Trump.

Come October 1, the government will not only run out of funding and shut down, but the current government budget caps will expire, automatically triggering roughly $120 billion in across-the-board cuts to domestic and military programs. Meanwhile, after breaching the debt limit in March, the Treasury Department is already taking extraordinary measures to ensure the United States doesn’t default on its loans.

There’s some good news: Both the White House and leaders in Congress appear interested in averting such a crisis. Republican leaders met with Treasury Secretary Steve Mnuchin this week to discuss an opening offer for Democrats, and Senate Leader Mitch McConnell has reportedly been advocating for a middle ground deal on budget caps and debt ceiling. Pelosi said she hadn’t seen what Republicans agreed to.

“When we have been engaged in conversation ... we were making some progress,” House Speaker Nancy Pelosi said Thursday. “But then they kind of backed away from it.”

In May, top congressional leaders met with White House officials and agreed to raise the budget caps and the debt ceiling to avoid a sequester. But Trump and fiscal hawks in his administration like White House chief of staff and Office of Management and Budget Director Mick Mulvaney, who has advocated for draconian budget cuts in the past, remain wild cards in negotiations. Trump tweeted a bipartisan budget deal was “not happening!” in April. He said in May he wouldn’t negotiate on big-ticket items like infrastructure until Democrats stopped investigating him.

Pelosi said she’s skeptical a deal can be made if “Mick Mulvaney takes the lead,” citing his record of voting in favor of shutting down the government. “Left to our own devices, we can get it done,” Pelosi said. “It’s when they come in with deal breakers ... because they don’t believe in governance.”

The need for budget caps goes back to 2011, when an Obama-era impasse over the debt ceiling brought the American economy to near calamity. Republicans in the House, led by Speaker Boehner, refused to increase the debt limit without Congress addressing the national debt. It’s something Mulvaney played a role in back when he was one of the House’s archconservatives.

The face-off, which put the United States at risk of defaulting on its debt, pushed President Obama to sign the Budget Control Act. The law instructed Congress to find more than $1 trillion in government spending cuts by the end of the year or risk a sequester, which cuts all discretionary programs — defense and non-defense — across the board (except for entitlement programs like Medicaid and Social Security). Mulvaney was one of the Tea Party agitators who worked to block any increase to the debt limit, eventually forcing Obama’s hand to sign the BCA.

Congress failed to thoughtfully cut spending, which triggered automatic budget cuts in 2013 and imposed annual, more restrictive budget caps until 2021 — the sequester. The across-the-board budget cuts and established caps would amount to $1.2 trillion in cuts over the next 10 years. According to a 2015 report from the Center on Budget and Policy Priorities, funding for domestic programs was essentially flat between 2012 and 2015, meaning there were substantial cuts when adjusted for inflation.

Democrats and Republicans have repeatedly voted to raise the budget caps and give sequester relief, but those adjustments are set to expire this October.

Put simply, either Congress has to vote to raise the budget caps for defense and domestic spending or the country will go to sequester-level spending — which would mean roughly $71 billion in budget cuts to defense spending and $55 billion in cuts to domestic programs.

[oyarde]

So she is demanding increases in the welfare nation programs .

[oyarde]

I say let Mick kick her in the nuts and shut it down .

[r3volution 3.0]

So she is demanding increases in the welfare nation programs .

And the administration is going to give it to her on a silver platter (after the requisite play-acting in front of the cameras).

Treasury Secretary Steven Mnuchin, who is leading negotiations for the administration...shares Pelosi's sentiments

[oyarde]

And the administration is going to give it to her on a silver platter (after the requisite play-acting in front of the cameras).

I think they will . I bet they feel like they have to . Personally I think the answer is shut it down .

[Zippyjuan]

And the administration is going to give it to her on a silver platter (after the requisite play-acting in front of the cameras).

Trump wants to avoid the automatic $70 billion cuts to the Department of Defense.

[Working Poor]

Why don't we just cut congress pay in half?

[nobody's_hero]

Sounds like the right stance for the wrong reasons.

[buck000]

Individual crisis: too much debt
Federal gubmint crisis: not enough debt

[timosman]

Individual crisis: too much debt
Federal gubmint crisis: not enough debt

Unlike the government, an individual has a choice. They could just spend less. The government doesn't have this option.

[Swordsmyth]

Trump administration bargainers offered a one-year budget freeze and said Democratic spending demands remained too high as talks with congressional leaders aimed at averting deep cuts in defense and domestic programs seemed no closer to resolution Wednesday.After White House Chief of Staff Mick Mulvaney took shots at House Speaker Nancy Pelosi, Democrats said White House involvement in the negotiations was hindering progress and rejected the proposed freeze.
The exchange suggested the two sides were not near a handshake to avert automatic cuts and instead boost both defense and domestic programs, perhaps for two years. Without some agreement, overall spending would be slashed by $125 billion starting next year, a roughly 10% reduction in agency budgets that both parties consider too draconian.
Emerging from a bargaining session in Pelosi's office that lasted over an hour, Treasury Secretary Steven Mnuchin said that without an accord, the White House was prepared to prevent the automatic cut but would force agencies to live with a far less severe, one-year extension of this year's budget.
Mnuchin said the administration would also agree to extend the federal debt limit for a year. The government is projected to deplete its legal ability to borrow money after summer, which would prompt an unprecedented failure by the government to repay its debt that could rattle the world's economy.
"The president has every intention of keeping the government open and keeping the soundness of the full faith and credit of the government," Mnuchin told reporters. He said both sides agreed not to hold the debt limit "hostage to spending."
In a joint statement after the meeting, Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., bristled at White House involvement in the negotiations. They said Democrats "are committed" to working with congressional Republicans to avert automatic spending cuts, a budget freeze and a federal default.
"If the House and Senate could work their will without interference from the President, we could come to a good agreement much more quickly," the two Democrats said.
Schumer later told reporters that "unfortunately" the White House has joined the talks. He said Senate Majority Leader Mitch McConnell "is just in obeisance to the White House, and so that's where we're stuck right now."
McConnell spokesman Doug Andres said, "The leader has made clear that any deal has to be bipartisan and that includes the president's signature."
Schumer also said a one-year freeze "is bad policy, it's bad politics and it's a fall back. We should be negotiating a bill."
Schumer and McConnell are also monitoring sidebar Senate talks between the chairman and top Democrat of the powerful Appropriations Committee, who have one of the few fully functional bipartisan working relationships in Washington. Those talks are more promising, congressional aides said.
Those senators, Richard Shelby, R-Ala., and Patrick Leahy, D-Vt., have a dim view of the negotiating skills of Mulvaney, a former tea party lawmaker from South Carolina who doesn't disguise his disdain for the go along, get along style of the committee.
Democrats have been pushing for increased spending for domestic programs, not a freeze, as a tradeoff for the big Pentagon increases Trump and congressional Republicans are demanding.
Mulvaney, exiting the negotiating session, said Democrats had actually increased their demand for domestic spending since the last bargaining session in May to $647 billion, which he said is $8 billion above their previous offer.
"So you tell me if things are moving in the right direction. Last time I checked, that's not how you compromise," Mulvaney said.

More at: https://news.yahoo.com/house-passes-...193333267.html