U.S. House approves 2-year budget, debt ceiling deal

U.S. House passed a budget deal Thursday that will boost overall spending levels and suspend the federal debt ceiling for the next two years.

The agreement, struck between the White House and Congress in a bipartisan fashion Monday, covers fiscal years 2020 and 2021, and would raise overall spending levels by 320 billion U.S. dollars above the strict limits set in 2011.

It would also suspend the federal debt ceiling until July 31, 2021, preventing the United States from defaulting on its payment obligations. The Treasury Department has estimated that a potential default could have happened as soon as early September.

The passage of the Bipartisan Budget Act of 2019 in the House by a vote of 284-149 came one day before lawmakers in the chamber leave town for the summer recess.

"This agreement was reached and it will meet the needs of the people whom we are honored to represent," House Speaker Nancy Pelosi as she advocated the passage of the bill during a debate before lawmakers cast their votes. The Democratic congresswoman led the Congress in negotiating the deal with Treasury Secretary Steven Mnuchin, who represents the administration in the talks.

The Senate's recess starts on Aug. 2, giving the upper chamber additional time to vote on the measure. If passed by the Senate, the proposed bill will be sent to President Donald Trump's desk for signature.

U.S. President Donald Trump [File photo: VCG]

Trump tweeted earlier in the day urging House Republicans to support the deal, which is not yet a law until the president signs on it. Trump applauded the agreement, saying it "greatly helps our Military and our Vets."

Representing a significant bipartisan compromise, the bill will see the budget cap for discretionary spending rise to 1.37 trillion dollars in 2020 and 1.375 trillion dollars in 2021. It includes parity between increases in defense spending and domestic, non-defense outlays, a priority for House Speaker Nancy Pelosi, a California Democrat.

While Democrats managed to clinch 77.4 billion dollars in "offsets" for spending increases -- down from the original White House proposal asking for 150 billion dollars -- Republicans can boast the victory of securing more defense spending in the agreement -- 738 billion dollars in 2020 and 741 billion dollars in 2021.

Meanwhile, the 320-billion-dollar rise in overall spending levels for the next two years is 30 billion dollars less than what the Democrats have sought.

Non-defense spending for fiscal 2020 would total 632 billion dollars, up nearly 4.5 percent above the comparable fiscal 2019 numbers. For 2021, spending in domestic programs would be further boosted to 635 billion dollars.

"We are securing robust funding for crucial domestic priorities," Pelosi said. "We have always insisted on parity in increases between defence and non-defense."

In addition, the legislation would avoid the automatic cuts looming in January that would have reduced 55 billion dollars in domestic spending and shrank military spending by 71 billion dollars compared with 2019 levels.

The automatic across-the-board cuts, known as "sequester," were established in the Budget Control Act of 2011. It intends to cut spending for federal agencies totaling 1.2 trillion dollars during the decade ending 2021, when the law is set to expire.

With the spending levels being raised, the agreement would permanently end the sequester, a move hailed by Pelosi and Senate Minority Leader Chuck Schumer in a joint statement Monday as an important win for Democrats.

"Importantly, Democrats have achieved an agreement that permanently ends the threat of the sequester," they said. "We are pleased that the Administration has finally agreed to join Democrats in ending these devastating cuts."

The deal, however, has met with opposition from fractions on Capitol Hill. The conservative House Freedom Caucus in an op-ed published Thursday in USA Today criticized the bill, saying it is "deeply flawed."

"With the national debt rapidly approaching an astonishing $23 trillion, it's obvious what Congress should be focused on," wrote Republican Representatives Mark Meadows, Jody Hice and Warren Davidson, who are all members of the conservative group. "We should be working around the clock, canceling Congressional recess if necessary, to hammer out a budget agreement that responsibly cuts spending and sets the country on a track to fiscal solvency."

Yet, House Republican leaders and House Democrats by and large are supportive of the deal. While calling the agreement "not a perfect deal by any means," Congressional Progressive Caucus, a progressive group in the House, said in a statement Wednesday that "with this agreement, we can finally begin to end this harmful chapter of self-inflicted austerity."

The group added that the deal "will allow for major, long-overdue investments in domestic priorities -- including housing assistance, food aid, education and job training."