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Tempers flare as leaders, White House fall short on spending deal

Failure to reach agreement after top-level meeting in Capitol

Senate appropriators, led by Chairman Richard Shelby, right, and Vice Chairman Patrick Leahy have held off on beginning their regular process of moving spending bills pending some agreement among the House, Senate and White House. (Tom Williams/CQ Roll Call)
Senate appropriators, led by Chairman Richard Shelby, right, and Vice Chairman Patrick Leahy have held off on beginning their regular process of moving spending bills pending some agreement among the House, Senate and White House. (Tom Williams/CQ Roll Call)

A meeting of top White House officials and congressional leaders broke up Wednesday without agreement on topline funding allocations for appropriators, raising fresh doubts over their ability to avert another fiscal crisis later this year.

House Minority Leader Kevin McCarthy accused Democrats of upping the ante on nondefense spending from what they’d put on the table previously.

“The problem is the Democrats keep raising their number higher,” the California Republican said. “There’s no negotiation.”

It wasn’t immediately clear whether there was movement on raising the statutory debt ceiling, which needs to be lifted by late September or the government’s borrowing authority will grind to a halt. Trump administration officials said Speaker Nancy Pelosi agreed the debt limit should be dealt with irrespective of the budget caps negotiations.

“The good news is everybody in the room agreed that we will not hold the debt ceiling subject, or hostage, to spending,” Treasury Secretary Steven Mnuchin said. Pelosi has “changed her position,” added Mick Mulvaney, the White House’s acting chief of staff.

Previously, Pelosi has said raising the spending caps had to come before, or at the same time as, legislation to suspend or raise the debt ceiling. A Democratic aide, speaking on condition of anonymity, denied that the California Democrat changed her mind and said she still thinks a deal on spending caps is necessary before taking action on the debt limit.

Mnuchin said one possible deal would include a one-year stopgap measure extending current funding levels, accompanied by a one-year debt limit suspension.

“In an effort of compromise, we’ve made it very clear … that if we can’t reach a spending agreement, we are prepared to do a one-year [continuing resolution] and a one-year debt ceiling,” he said. “The president has every intention of keeping the government open and keeping the soundness and full faith and credit of government.”

Eric Ueland, the new White House legislative affairs chief, said the administration prefers to deal with the debt limit quickly, and separately, from the spending fight if possible.

“We continue to be very emphatic that we would like to see a clean extension of the debt limit as quick as possible,” Ueland said. The length of the extension should be “as long as we can get, as early as we can get,” he added.

Senate Minority Leader Charles E. Schumer said the chamber’s appropriators previously reached a tentative agreement to start moving fiscal 2020 spending bills under “regular order.” However, Schumer said Senate Majority Leader Mitch McConnell put a stop to that in deference to the White House.

“So that’s where we’re stuck right now,” Schumer said. The New York Democrat made clear the White House push for a one-year stopgap wasn’t winning any converts on his side of the aisle, however.

“A one-year CR is bad policy. It’s bad politics, and it’s a fallback. We should be negotiating a bill,” Schumer said.

What’s $8 billion among friends?

Echoing McCarthy, Mulvaney said Democrats came into the meeting asking for more nondefense spending — $647 billion — than the $639 billion they previously asked for.

“So you tell me if things are moving in the right direction. Last time I checked, that’s not how you compromise,” Mulvaney said.

The Democratic aide disputed that assertion, noting the difference was simply “cap adjustments” that have been part of their fiscal 2020 bills all along.

The $639 billion nondefense figure matches funds allocated by House Democrats in the bills they’ve been voting on, including $8 billion in cap-exempt Overseas Contingency Operations dollars for the State Department. Adding another $7.5 billion for one-time 2020 census funds, and $400 million for IRS tax enforcement — the latter is part of the White House’s budget request — brings the total to roughly $647 billion.

While he wasn’t in the meeting, House Majority Leader Steny H. Hoyer has been involved in caps talks previously and has often criticized Mulvaney — a former House GOP lawmaker from South Carolina — as being particularly obstinate.

The Maryland Democrat reiterated those concerns Wednesday.

“Mulvaney does not want a deal, and I think that’s the biggest point,” Hoyer told reporters.

McCarthy also said Republicans are pushing for offsets for spending caps increases, telling reporters there “always” have been pay-fors in such agreements.

That’s true for budget accords reached in 2013 and 2015, but the two-year spending caps deal enacted in 2018 increased deficits by $258 billion, according to the Congressional Budget Office. McCarthy said the talks hadn’t gotten to the point of discussing offsets, however.

In a joint statement after the meeting, Schumer and Pelosi placed the blame squarely on the White House for lack of a budget deal. But they suggested progress was made at the meeting and the parties could ultimately reach a deal if they are given room to negotiate by President Donald Trump.

“When left to their own devices, House and Senate appropriators, Democrats and Republicans working together, can get the job done,” the top Democratic leaders said. “While we did not reach an agreement, today’s conversation advanced our bipartisan discussions. If the House and Senate could work their will without interference from the president, we could come to a good agreement much more quickly.”

While the high-level meeting occurred behind closed doors, the House passed a $985 billion fiscal 2020 spending package, wrapping together four of the dozen individual appropriations bills. The measure included the two largest, Defense and Labor-HHS-Education, as well as Energy-Water and State-Foreign Operations.

The vote was 226-203, with no Republicans supporting it; they argued it was too pricey and contains numerous controversial policy provisions. That display of GOP party unity could translate into a harder White House line in the ongoing talks.

Niels Lesniewski contributed to this report.

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