House Speaker Nancy Pelosi holds a news conference Wednesday.

House Speaker Nancy Pelosi holds a news conference Wednesday. J. Scott Applewhite/AP

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Democrats Set New Deadline for Spending Agreement, Debt Deal

"It's all about money," House speaker said of the holdup in negotiations.

Congressional Democrats are looking to speed up negotiations with the White House over a deal to raise spending levels and avert a debt default, saying the two sides need to reach an agreement by the end of the week. 

Lawmakers and Trump administration officials need to find common ground by this Friday, House Speaker Nancy Pelosi, D-Calif., said on Wednesday, to enable the House to vote on the bill next week and leave time for the Senate to act before the annual August recess. Pelosi, Senate Minority Leader Chuck Schumer, D-N.Y., Treasury Secretary Steve Mcuchin and others are ironing out a two-year budget deal to avoid automatic spending cuts that are set to take place in fiscal 2020 under the 2011 Budget Control Act. 

Pelosi has insisted the deal also include a provision to raise or suspend the debt ceiling. Mnuchin told Pelosi last week that due to a revision in when the Treasury will hit its borrowing limit, Congress should act before the summer recess to avoid risking a default. 

The House speaker said if the deal is reached by Friday, lawmakers can get the bill written and vote on it by Thursday of next week. That would give the Senate sufficient time to act.

Congress has agreed to three separate two-year budget deals since the spending caps went into effect in 2013. Pelosi, Schumer and Mnuchin spoke by phone on Wednesday, after which the negotiators said they were hopeful the talks had spurred progress. 

“It’s all about money,” Pelosi said when asked what was holding up negotiations. 

The speaker recently sent a letter to Mnuchin reiterating Democrats’ demand that any deal raise spending levels for non-defense agencies at least as much as the increase for the Defense Department. Absent a deal, defense and non-defense spending would face total cuts of $125 billion next year. Pelosi also demanded that spending for the Veterans Affairs Department’s expansion of government-funded private care under the Mission Act be considered outside of VA’s normal spending allocation. 

“We don’t want vets resources to be competing with each other or competing with very valuable domestic priorities,” Pelosi said on Wednesday. 

Current funding for federal agencies is set to expire Sept. 30, while Mnuchin has said Treasury could hit its borrowing limit in early September.