Debt deal moving forward with key GOP, Democratic support

Fiscal hawks blast agreement: ‘Washington has all but abandoned economic sanity’

Treasury Secretary Steven Mnuchin arrives to attend the Senate Republican policy lunches in the Capitol on Tuesday. (Tom Williams/CQ Roll Call)
Treasury Secretary Steven Mnuchin arrives to attend the Senate Republican policy lunches in the Capitol on Tuesday. (Tom Williams/CQ Roll Call)
Posted July 23, 2019 at 3:01pm

Updated 7:10 p.m. | Treasury Secretary Steven Mnuchin visited Senate Republicans Tuesday to try to shore up support for a two-year spending caps and debt limit accord, amid bipartisan concern over tacking another $324 billion onto deficits — a figure that could more than quintuple when spread out over a decade.

Mnuchin sought to reassure Republicans at their weekly policy lunch that President Donald Trump in fact supports the deal he reached Monday with Speaker Nancy Pelosi, according to Senate Appropriations Chairman Richard C. Shelby and others.

[Podcast: What we know so far about the budget, debt limit deal]

“[Mnuchin] said the president was behind it, that he had signed on to it and that we could move forward,” the Alabama Republican said. “The president said he was on board. Let’s take him at his word.”

Trump on Monday tweeted that he was “pleased to announce” the agreement, and endorsed increased funding for the military and veterans programs. He followed up with another tweet Tuesday indicating he favors the package: “Republicans and Democrats in Congress need to act ASAP and support this deal.”

But he didn’t say the words “I will sign the bill,” which has spawned some nervousness, particularly given the reaction of conservatives on and off Capitol Hill. Texas Republican Sen. Ted Cruz came out against the deal on Tuesday morning, and Sen. John Kennedy suggested he might vote against it as well.

“I’ve got a lot of questions about this bill,” the Louisiana Republican said. “Now, some of my colleagues are sold. And it may taste like pumpkin pie. But I’m not near ready to vote for it.”

Kennedy also voted against the 2018 budget deal, which also covered two years and tacked $296 billion onto discretionary spending caps. But importantly, he voted for cloture on the measure to enable it to advance to a final vote.

The 2018 measure included $38 billion of deficit savings in the 10-year budget window, or 13 percent of the total. Lawmakers have been touting about $77 billion in offsets in the latest bill, but the Congressional Budget Office estimated Tuesday that only $54.5 billion — 17 percent of the total spending increase — will show up within the first decade.

By contrast, White House officials had been seeking $150 billion in cost savings. It’s not yet clear whether the CBO estimate will further erode support for the package.

“I make no apologies for this two-year caps deal. I think it’s the best we could have done in this time of divided government,” Senate Majority Leader Mitch McConnell told reporters. “I’m confident we will” pass the bill in the Senate, he added.

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Acting White House budget chief Russell Vought appeared on the Fox News Channel on Tuesday morning to defend the deal.

“I love the concern of the conservatives who are bringing attention to the problems that we have with fiscal responsibility in this town. This president put forward more spending cuts than any president in history, and we have been negotiating for five months,” Vought said. “We’re now up against a deadline, heading into the August recess, where we need the debt limit extended, we need to continue to rebuild the military.”

Vought’s imprimatur is important because he’s viewed as closely aligned with spending hawks in the GOP. The former Heritage Action official and House Republican Study Committee aide, along with acting White House Chief of Staff Mick Mulvaney, were seen as attempting to hold back the spending binge being negotiated by Mnuchin and Pelosi.

Vought focused on policy riders he said Democrats won’t be able to advance as a result of the pact, though final decisions won’t be made on fiscal 2020 appropriations bills until later in the year.

“There will be no new legislative riders to stop this president’s agenda on deregulatory initiatives or building the wall,” Vought told Fox. “The Hyde amendment, all of the pro-life protections that have been in years past are protected. No new legislative riders that the Democrats were seeking to roll back those protections would be something that would be considered.”

The Hyde amendment is a four-decades-old provision of appropriations law that prevents federal health care funds from being used to finance abortions. Democrats have grown increasingly strident in their opposition to Hyde, arguing that it hurts low-income women who rely on Medicaid more than others, but House leaders earlier this year kept the situation from erupting into a revolt on the fiscal 2020 Labor-HHS-Education spending bill on the floor.

In urging House Republicans to support the measure, House Minority Whip Steve Scalise on Tuesday sent around to members’ offices a press release from the Susan B. Anthony List, an anti-abortion group, backing the bill. Scalise also noted in his memo that the GOP whip team would be discussing the bill with Republican lawmakers during the House vote series Tuesday evening.

‘Economic sanity’

Conservative outside groups have nonetheless blasted the agreement.

“Washington has all but abandoned economic sanity,” FreedomWorks president Adam Brandon said in a statement Tuesday. “With this ‘deal,’ GOP ‘leadership’ has ceded its ground on fiscal responsibility, which for years was supposed to be a core tenet of the party.”

Conservatives were also aghast that the Trump administration is moving forward with a debt limit suspension into 2021 without spending cuts. Although the deal only sets spending levels for two years — adding about $324 billion on top of the current limits, including an extra $2.5 billion cap adjustment for the 2020 census — the higher numbers would then inflate projected costs in future years above the lower caps assumed under the current-law budget baseline.

“On top of the new spending, the deal suspends the debt limit for the next two years, piling on as much as $2 trillion more in debt. Hitting the debt limit ought to be a wake-up call for lawmakers to confront our nation’s unsustainable spending,” said the Heritage Foundation’s Paul Winfree.

Winfree’s criticism is all the more striking because it comes from a former colleague of Vought and Mulvaney in the Trump administration, where he served as a deputy director of domestic policy.

“If President Trump takes this deal — the worst in a decade — his fiscal legacy will be no different than the Obama and Bush administrations that he has criticized,” Winfree added.

Not all of the votes are locked down on the Democratic side, either. Montana Sen. Jon Tester, who voted for the 2018 package, suggested Tuesday he might not back this year’s iteration. “We’re adding crazy amounts of debt. It’s not good,” Tester said. “I’m very concerned about it.”

And that’s just the Senate. The measure still has to get through the House, where progressive members who refused to back the proposed funding levels introduced by Democratic leaders earlier this year have thus far kept their powder dry. The deal reached by Pelosi and Mnuchin contains higher defense spending and lower levels for domestic and foreign aid programs than the earlier House budget caps bill.

“I would expect they would, yeah,” Rep. Ann McLane Kuster of New Hampshire said when asked if she thinks New Democrats will vote for the deal, though she cautioned she hadn’t spoken to all members. “I’m going to support it … I think people, you know, feel good about raising the caps, and I know that the Democratic position was to go even higher on the nondefense, but my impression is that this was a negotiation that was very favorable to the Democrats overall.”

Kuster is vice chair for communications for the New Democrat Coalition, a key voting bloc.

“I know a lot of the New Dems care a lot about the issue of the debt ceiling, and we are opposed to any more government shutdowns. And so to get this resolved now in a timely way is really important,” she said. 

Conservative members of the House Republican Study Committee and Freedom Caucus have already made their displeasure known. 

Kellie Mejdrich, Daniel Peake, Jennifer Shutt and Katherine Tully-McManus contributed to this report.