Senate Republicans and the Trump administration are struggling to agree on critical budget and spending issues, threatening not only a renewed government shutdown and sharp spending cuts, but also a federal default that could weigh heavily on the economy.
GOP leaders have spent months cajoling President Trump in favor of a two-party budget deal that would fund the government and increase the federal borrowing limit this fall, but their efforts have not yet been completed. And the dubious way forward was highlighted at Capitol Hill this week, at a budget meeting between key Senate Republicans, including Majority Leader Mitch McConnell (R-Ky.), And senior officials of the Senate. White House, excluded the Democrats, whose votes will be imperative to avoid a stop and a violation of the federal debt limit that upset the economy.
"We are negotiating with ourselves," said Richard C. Shelby (R-Ala.), Chair of the Senate Credits Committee. "The president, the administration, may have slightly different points of view than the Republican senators. So we try to see if we can be together as best we can. "
The dysfunction of the GOP – associated with a new democratic-parliamentary majority with its own priorities – separates the parties much more than they were at this stage of last year's budget process, which resulted in a funding gap record on the part of the government. At the time, Republicans controlled both houses of Congress, but negotiations over the funding of Trump's immigration priorities remained stalled.
Trump and Congress face a trio of tough budget problems. The Congress must adopt, and Trump must sign, a law on financing by 1 October to avoid a new judgment. According to the latest estimates, they must raise the federal debt ceiling at about the same time. Failure to do so would force the government to make tough decisions on payment obligations and could be seen as a default by investors, disrupting markets and an economy already showing signs of worry.
And by the end of the year, they must also agree on how to lift the austere budget ceilings that would otherwise be put in place and reduce national and military programs by $ 125 billion.
The Senate Republicans and the administration have not yet agreed on how to proceed on any of these issues, which makes it impossible for them to begin negotiating background with the Democrats. This left the Capitol in a state of suspension compared to what the coming months will reserve.
"True to their reality, they seem to want to wait until the very last minute to solve all the problems we know," said Maya MacGuineas, chair of the non-partisan non-profit committee for a responsible federal budget. "Basically, all they could do wrong, they hurt it."
Tensions between leading Senate Republicans and White House acting head of cabinet, Mick Mulvaney, have been apparent for months, and lawmakers and their GOP aides have partially blamed tense relations for sluggish talks. Mulvaney was a member of the conservative House Freedom Caucus group before joining the administration, first as budget director at the White House before becoming acting chief of staff, and he advocated spending cuts. opposition by the legislators of both parties.
Mulvaney has been slow to realize the need for a bipartisan budget deal that would raise national and military spending ceilings, even after McConnell privately met with Trump last month and obtained the blessing of his president, a spokesman said. senior official of the GOP Senate. help who spoke under the condition of anonymity to describe private conversations.
"The problem with Mulvaney is sometimes that he forgets that he is a staff member now, so he's trying to execute his own vision instead of the president's, and that's slowing down the process "said the assistant.
A spokesman for Mulvaney did not respond to a request for comment on his relations with Senate Republicans. An administration official, who requested anonymity to describe internal thinking, said Trump had encouraged McConnell to get a good deal, but had not offered a general agreement for a budget deal that would increase domestic expenditures without distinction.
What these spending levels should be remains a matter of contention between Senate Republicans and the administration, according to lawmakers and officials on both sides, and it is unclear when and how to reach a resolution. According to senior government officials and Senate Assistants, Mulvaney and the Administration are in favor of maintaining existing spending levels or entering into a one-year agreement, rather than reaching the type of two-year agreement previously agreed upon and legislated by both parties to favor. now.
The administration also insisted that the debt ceiling be raised as soon as possible, while House of Representatives Speaker Nancy Pelosi (D-Calif.), Clarified that a vote on the debt ceiling is spread until the conclusion of an expenditure agreement. Senate Republicans are also in favor of including the debt limit in a broader spending deal, but some complain that they do not know exactly what the White House will support with respect to the financial issues they face. are faced.
"I think that's what we're trying to find out," said Sen. John Thune (SD), Republican in Senate No. 2. "Our members are ready to move, but they do not want to move unless that the White House is not involved with all the above. "
Senate Republicans and key collaborators have expressed frustration over Mulvaney in recent weeks. Shelby was particularly bitter in discussing Mulvaney's involvement in talks on a massive disaster relief bill that was passed earlier this month after weeks of negotiations. At one point, Shelby was asked if Mulvaney played a "constructive role" in the discussions and said that Mulvaney was playing "a role".
Shelby also specifically asked for Mulvaney's presence at his own meeting with Trump last month, so Mulvaney could hear Shelby describe the disastrous consequences if a budget deal was not reached. After this week's meeting with Mulvaney, Treasury Secretary Steven Mnuchin and others, Shelby simply stated about Mulvaney's position in the negotiations: "He was here."
The frustration with Mulvaney is bipartisan. At a press conference last week, Ms. Pelosi said she was skeptical about reaching an agreement "when Mick Mulvaney takes the lead," citing his role in the House of Commons. causing a government shutdown in 2013. "Mick Mulvaney was one of the government leaders when he was here and voted to keep it closed," Pelosi said.
The GOP's internal turmoil has provoked repeated criticism from Democrats, who blame Republicans for failing at high-level bipartite talks last month, though Republicans blame Democrats for not wanting to lower oneself to expenses.
"Let's hope the Republicans can take charge," said Senate minority leader Charles E. Schumer (D-N.Y.), In a brief interview at Capitol Hill last week.
This accusation transformed the most fundamental mandate of Congress, which is to fund the government, into a game of blaming big issues with potentially devastating consequences. If new spending bills are not passed before Oct. 1, the government will close, as it did last winter, for a record 35 days, when Democrats refused Trump's demands. to pay for his wall along the US-Mexico border. To the extent of the number of contentious issues awaiting us, the funding of the wall, which will certainly be a hot issue again, has barely begun to be negotiated between the parties.
At the same time, if an agreement is not reached to lift the automatic spending limits, known as the "escrow", the resulting automatic cuts would indiscriminately reduce vital national programs and jeopardize preparedness. military, warned members of both sides. And the Treasury Department is already resorting to money-saving tactics, called "extraordinary measures", because Congress has not acted to increase the country's borrowing ceiling, often called the debt ceiling.
If Congress did not act and if the Treasury ran out, which should happen by the end of the fall, the Treasury would not be able to pay all its bills on time, this that could result in a breach of government obligations, a rise in interest. high unemployment rates and a stock market crash. Fitch Ratings warned earlier this year that a stop combined with a battle over the debt ceiling could hurt the country's Triple-A credit rating.
Lawmakers and government officials say that they are aware of the urgency to act. But the recent interactions between Congress and the White House have not inspired confidence. The massive $ 19-billion Bulk Aid Bill, which was recently passed, was only after months of partisan wrangling, and a request for emergency spending for the migration crisis at the southern border has also been blocked in partisan conflicts, despite urgent warnings from the administration running out of money to deal with the crisis. influx at the end of the month.
Democrats in the House managed to spend their bills without the consent of the Republicans, putting at the disposal of the Ministry of Health and Social Services, the Pentagon and other agencies, a considerable budget of $ 983 billion. . accept. A bipartisan agreement in the Senate that allowed the Congress to make unusual progress in passing the spending bills last year – until the wall protest – was not resurrected this year and the Senate Appropriations Committee has not yet passed a single spending bill.
And all of this is in the context of an extremely partisan debate about impeachment and an imminent presidential campaign, which Shelby called "collateral problems," which only heightens the difficulty of reaching an agreement. . The result is a mixture of problems that has led long-time legislators to wonder whether Congress and Trump White House were able to divert the country from financial disaster.
"This is one of the most basic requirements of the government," said Sen. John Cornyn (R-Tex.), "Is to determine what the government will spend."