Following a series of phone calls and in-person negotiations, an agreement was reached last evening that would, if signed into law, raise both the debt limit and the spending levels for next year and FY2021. Shortly after President Trump announced that a deal was agreed to, Speaker Nancy Pelosi (D-NY) and Senate Minority Leader Chuck Schumer (D-NY) confirmed the announcement.
The deal addresses two different issues. First, it would increase debt limit for two years and, in theory, push the issue into 2021, after the next election cycle.
Second, the deal would also increase the spending limits for FY2020 and FY2021. Without such a deal, budget caps below the current level of spending would need to be imposed for the next two years.
As a result of the new deal, spending levels next year and the year after would increase by a total of $321 billion and $77 billion of that would partially be offset by extension of certain fees and accounting changes.
For FY2020, spending on defense programs would be increased to $738 billion, a 3.1-percent increase above the current level. Non-defense discretionary programs are slated to receive a total of $632 billion, 4.5 percent above the current level. In FY2021, defense spending would increase to $740.5 billion and spending on non-defense would go up to $634.5 billion.
While the deal has been publicly endorsed by the Trump White House and the Congressional Democrats, it must still be signed into law. With the House scheduled to go into a six-week recess starting this weekend and the Senate expected to follow suit next Friday, Congressional leadership is trying to get the measure enacted by the House Thursday, which would allow the Senate to act before its August recess.
Read more about the negotiations and the deal here, here, and here.