Trump an­nounces bud­get deal with Pelosi

Lodi News-Sentinel - - NATION / WORLD - By Steven T. Den­nis and Erik Was­son

WASH­ING­TON — Pres­i­dent Don­ald Trump has once again shoved aside past Repub­li­can or­tho­doxy on debt and spend­ing as he an­nounced a bud­get deal with House Speaker Nancy Pelosi that likely ush­ers in a re­turn to tril­lion-dol­lar deficits.

Trump once said he would elim­i­nate the $22 tril­lion fed­eral debt, but the an­nual bud­get deficit is on track to top $1 tril­lion a year — swollen by bi­par­ti­san spend­ing in­creases and his tax cuts — with no real ex­pec­ta­tion of a change in tra­jec­tory any time soon.

The deal, which still must clear Congress, ends the au­to­matic bud­get cuts en­acted as a re­sult of a showdown over the debt limit in 2011, when the new Repub­li­can ma­jor­ity in the House held fed­eral bor­row­ing author­ity hostage un­til Pres­i­dent Barack Obama agreed to a spend­ing strait­jacket.

The au­to­matic spend­ing cuts known as the se­quester were in­tended to pro­vide an in­cen­tive to cut a bi­par­ti­san grand bar­gain on re­duc­ing the na­tional debt, but those ef­forts were buried long ago.

Un­der the terms of the agree­ment, Repub­li­cans man­aged to se­cure $738 bil­lion in de­fense spend­ing for 2020 and $741 bil­lion for 2021, in­clud­ing funds for over­seas op­er­a­tions that aren't sub­ject to bud­get caps, while Democrats got $632 bil­lion in 2020 and $635 bil­lion in 2021 for do­mes­tic spend­ing. That amounts to $320 bil­lion boost in spend­ing over two years com­pared to lower bud­get caps that would have slashed spend­ing at the end of this year.

Trump has given a nod to bud­get cut­ting, but since tak­ing of­fice he's mostly cowed Repub­li­can deficit hawks into si­lence by pri­or­i­tiz­ing fund­ing the De­fense Depart­ment and cut­ting taxes.

Pelosi, mean­while, has ma­neu­vered to in­crease spend­ing on do­mes­tic dis­cre­tionary pro­grams by more than $100 bil­lion since Trump took of­fice. IN­CEN­TIVES

Both sides have po­lit­i­cal in­cen­tives to let the fed­eral dol­lars flow.

For a Repub­li­can pres­i­dent whose fo­cus has shifted to his re­elec­tion bid, the deal helps safe­guard his strongest as­set: the roar­ing U.S. econ­omy. With this deal, mar­ket con­cerns about the gov­ern­ment hit­ting the debt ceil­ing will be de­layed un­til well past the 2020 elec­tion, as would any threat of au­to­matic spend­ing cuts at the end of this year that might crimp growth.

Trump has pro­posed huge spend­ing cuts in each of his bud­gets — which were largely ig­nored by law­mak­ers of both par­ties — and this deal shelves any ef­fort at belt-tight­en­ing un­til Trump's sec­ond term or a Demo­cratic pres­i­dent takes of­fice.

The pres­i­dent is al­ready tout­ing the fact that the deal would bring record de­fense spend­ing, some­thing that ap­peals to de­fense hawks in his party.

"I think the pres­i­dent re­al­izes that he's not go­ing to sac­ri­fice the se­cu­rity of this na­tion to please a few people," said Se­nate Ap­pro­pri­a­tions Chair­man Richard Shelby, an Alabama Repub­li­can. Shelby noted the GOP needs Demo­cratic votes to pass the bud­get deal and they won't sup­port cut­ting so­cial pro­grams.

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