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Congress, White House indicate debt limit increase will be part of spending deal

by Alexander Bolton and Niv Elis - 05/21/19 1:33 PM ET

Congressional leaders and White House officials on Tuesday indicated that raising the debt ceiling will be part of a broader deal on spending caps.

“We all agree debt ceiling is going to be part of an overall deal, but we’re not discussing that right now,” Senate Democratic Leader Charles Schumer (N.Y.) told reporters after meeting with Congress’s three other party leaders and President Trump’s senior advisers.

{mosads}A White House official said the administration would be open to combining a debt limit increase and new defense and nondefense budgetary caps.

Senate Republican Whip John Thune (S.D.), who did not participate in Tuesday’s meeting in Speaker Nancy Pelosi’s (D-Calif.) office, said it makes sense to attach debt limit legislation to a spending caps agreement.

“It has to be done somewhere. That would be a natural vehicle to put it on,” he said.

Congressional leaders met with senior White House officials for more than two hours in Pelosi’s office on Tuesday morning and reported “progress.”

Pelosi and Schumer were joined in the meeting by Senate Majority Leader Mitch McConnell (R-Ky.), House Minority Leader Kevin McCarthy (R-Calif.), Treasury Secretary Steven Mnuchin, acting White House chief of staff Mick Mulvaney and acting White House budget director Russ Vought.

Acting Homeland Security Secretary Kevin McAleenan joined for a portion of the meeting.

“We have some differences but there’s some good progress being made,” Schumer told reporters afterward.

Mulvaney declined to say whether he could agree to a two-year spending deal, which Democratic and GOP leaders favor as a strategy to avoid another government shutdown.

“We are coming back later this afternoon,” said Mulvaney, who declined to discuss any details.

They plan to resume negotiations at 4:15 p.m.

House Budget Committee Chairman John Yarmuth (D-Ky.), who was briefed on Tuesday morning’s meeting, said that as far as he knew, nobody in the negotiations was opposed to raising the debt ceiling.

“I know Mnuchin wants it, and we certainly want it,” he said, referring to inclusion of the debt increase in a spending deal.

The Treasury Department did not immediately respond to a request for comment.

The negotiators are likely to settle on a numerical increase, as opposed to the more common practice in recent years of suspending the ceiling for a certain period, Yarmuth said.

The White House has called for the fiscal 2020 spending caps set by the 2011 Budget Control Act to take effect and to increase defense spending with the Overseas Contingency Operations fund, which does not count against the budget caps.

Democrats say nondefense domestic programs need to be increased alongside defense programs.

“We have certain domestic needs that are very important to us,” Schumer said.

A senior Democratic aide said before the meeting that “Democrats want parity in increases between defense and nondefense, and want to avoid sequestration at all costs.”

Yarmuth said that there seemed to be some consensus at Tuesday’s meeting about putting overall defense spending at $733 billion, $17 billion below the administration’s request.

House appropriators on Tuesday marked up their defense spending bill based on the $733 billion, which includes both a cap increase and off-book spending.

Updated at 4:15 p.m.