A debt ceiling deal has been reached. The leaders have signed off. The President has tweeted.
Now, it’s time to count the votes.
Bottom line
The four bipartisan congressional leaders and President Donald Trump jointly signed off on the $1.37 trillion budget agreement. That in and of itself represents all the dynamics for smooth sailing in the looming House and Senate votes. But nothing has been whipped yet — and there will clearly be objections. Now leaders will keep an eye on this — and work to ensure they don’t spread into a problem.
What to watch today
- Senate leadership press conferences at 2 p.m. ET
- Closed-door Senate policy lunches, where details of the agreement will be presented and leaders will get their first real temperature check at 12:45 p.m.
- House votes, the first opportunity to gauge House rank-and-file reaction, at 6:30 p.m.
What the deal means
There will be opposition to this deal coming from both parties, with the reasons laid out in more detail down below. But here’s the biggest takeaway from the agreement: it removes two significant crises from the plate of lawmakers and the White House — the looming $126 billion in automatic spending cuts and, far more importantly, the potential for a US default in early September.
It does not eliminate the possibility of a government shutdown. Lawmakers still have to pass, reconcile and get signed into law spending bills by the end of September to avoid that calamity. But it does set the numbers that allow that process to kick into gear.
There are plenty of reasons for both sides to attack the agreement, but those above pieces are, more than anything, what prevailed in the urgent sprint of talks that transpired over the past two weeks.
What it also means
The sequester is dead. It’s not postponed. It’s not delayed. It is dead. It was an ode to fiscal restraint — something conservatives still point to as a key fiscal victory from the Obama years — but one that has been reversed or delayed four times since 2013. Now it’s gone for good, amid deficits approaching $1 trillion and a debt level that has surpassed $22 trillion.
The key quote
Speaker Nancy Pelosi, to CNN, laying out the truth of any budget agreement: “You will never get all on something like this.”
But Pelosi was clear, Zeleny reports, that they would get enough. That’s how these agreements always work.
What happens next
The key outstanding piece, beyond what the vote counts will be, is when the House will vote on the agreement. Pelosi, in her joint statement with Democratic Leader Chuck Schumer, said the chamber would move “swiftly to bring the budget caps and debt ceiling agreement legislation to the floor, so that it can be sent to the President’s desk as soon as possible.”
A final date hasn’t been locked in yet, but aides say the target right now is to vote on Thursday.
The Senate will move it next week before it departs for its recess, Senate Majority Leader Mitch McConnell said in his statement.
How it all happened, and what’s inside
Read it all here, including CNN’s exclusive with Pelosi, courtesy of Detroit Metro Airport Tarmac Special Correspondent Jeff Zeleny.
What’s in the deal
The elements of the deal have been clear since talks started: a significant boost in defense spending in exchange for a significant boost in domestic spending, with a long-term debt ceiling suspension thrown in to ease market concerns. It’s a recipe for plenty of votes for passage, yet plenty of gripes in opposition. But in the end, it’s an agreement that lawmakers and aides on both sides say will pass.
Here are the topline details
- Debt limit suspended until July 31, 2021
- $1.37 trillion budget agreement in first year, $1.375 trillion in year two
- Raise the limits on spending $321 billion over two years
- Defense spending: $738 billion in fiscal 2020 (increase of $22 billion for the year and a total of $46.5 billion over the duration of the deal)
- Non-defense spending: $632 billion in fiscal 2020 (increase of $27 billion for the year and in total $56.5 billion over the duration of the deal)
- $77 billion in offsets — just half of what the White House requested — comprised extending customs fees that are set to expire and extending the Medicare sequester
- Agreement on not to introduce new policy riders to forthcoming spending bills (or as Trump refers to it: “poison pills”)
- No limits on administration’s transfer authority or ability to reprogram funds for border wall
Who is touting what
Democratic leaders, in their joint statement, pointed to more than $100 billion in spending increases on the domestic side since Trump took office. Republicans touted the defense spending increases, plus the stability the agreement provides to the Pentagon’s budget, along with the agreement on riders, which should smooth out the spending bill process.
Both sides had to back off some initial positions — the White House fell far below their Pentagon budget request and got less than half of the offsets they requested (and those came through a far different mechanism than the spending cuts they proposed).
Democrats had to commit on the policy riders and didn’t find a path outside of domestic increases to finance the new money required for new program that clears the way for more veterans access to private health care facilities.
In short: nobody gets everything they want and each side has reasons to be upset or thrilled. It’s the nature of these things.
One note on “poison pills”
The “no poison pills” piece of the agreement has been touted by the President and Republicans, and it will have the effect of streamlining the appropriations process and eliminating some of the most contentious spending battles. But to be completely clear: in divided government, the no-poison-pills agreement is practically standard practice in order to pass the spending bills. So it’s not exactly a massive win — it’s pretty much the only way to get spending bills done generally.
About Trump’s tweet
Several people have noted that Trump’s tweet announcing the deal didn’t explicitly say he endorsed it. Obviously, given past budget and spending agreements, there’s a little bit of trepidation about that.
Here’s what should be noted: the tweet was choreographed, and congressional leaders knew it was coming and understood it to be an endorsement. The White House followed it a few hours later with a statement that said the “House and Senate should quickly move this deal to the President’s desk for signature.”
In short: Trump supports the agreement.
The conservative blowback to the agreement, which was already building before it was locked in, will be intense. That, in the past, has had a heavy influence on both the President and rank-and-file Republicans. As stated above, the President signed off on the agreement. But that doesn’t mean there won’t be a push-and-pull for his ear in the days ahead, and more importantly, a push-and-pull on actual votes. With that in mind, keep an eye on these folks:
GOP Leader Kevin McCarthy
McCarthy was involved in the talks, worked behind the scenes to bring Trump along on the need for a deal for defense purposes, was on the leader conference call and put out a statement supporting the deal. His conference, however, could move heavily against the proposal. How he manages those dynamics — even if they likely will have very little effect on whether the bill passes — will be an interesting test in the days ahead.
Reps. Mark Meadows and Jim Jordan
Veterans of past budget and spending fights are keenly aware of the power the words Meadows and Jordan respectively, can have on the President. They represent his base — and Trump is always cognizant of where it — and they — stand on things like this. They won’t support the agreement, but how much effort they put into opposing it — and who they bring along with them — will be notable.
Rep. Mike Johnson
The chairman of the sizable Republican Study Committee, Johnson was out front criticizing the elements of the emerging deal last week, and he reiterated that opposition in a statement after the deal was announced. It’s a caucus that boasts a large House conservative membership, much of which could turn against the deal.
Sen. David Perdue
Perdue is a close ally of the President and was crucial to bringing him along on the disaster relief package passed earlier this year. He has also been a sharp and vocal advocate for the defense piece of this deal — and avoiding any funding freeze at current levels. That’s an important voice for supporters of the deal to have on their side.
Rep. Mac Thornberry
Thornberry is the top Republican on the House Armed Services Committee and has long been a sharp critic of the sequester. He and his committee will be relied upon to produce some GOP votes in the House.
And on the Democratic side
Keep an eye on these folks for their perspective. They won’t sink the agreement if they oppose it, but it will be illuminating as to where everyone stands with the spending bills still to come.
Reps. Pramila Jayapal and Mark Pocan
The co-chairs of the Congressional Progressive Caucus have already raised concerns about the significant increase in defense spending. And an agreement not to include any policy riders in future spending bills — which would cut back a key lever of power, even if fruitless in any final agreement — along with restrictions on the Trump administration’s ability to reprogram funds for a border wall, could create issues.
How progressives land on this, especially given the spending bill negotiations to come, will be interesting to see.
Swing district freshmen
Spending can be an issue in a tight congressional race, and voting for an agreement that bumps spending to this level becomes an immediate attack ad, whether Trump supports it or not. Don’t be surprised to see a few “no” votes come out of this group
Final thing to keep an eye on going forward
As noted above, this agreement doesn’t keep the government from shutting down at the end of September — Congress still needs to pass 12 appropriations measures to fund the government. It’ll be a heavy lift when they return from August recess, but several additional elements of this deal are designed to streamline that process, including a pledge to minimize procedural delays to the bills and a commitment to “orderly and timely consideration” measures in order to avoid a shutdown or large omnibus spending measure.
After months where only the Democratic-led House was passing spending bills — and without an agreed-upon top line — the appropriations process will now kick heavily into gear as lawmakers seek to avoid a shutdown.
