Trump administration bargainers offered a one-year budget freeze and said Democratic spending demands remained too high as talks with congressional leaders aimed at averting deep cuts in defense and domestic programs this autumn seemed no closer to resolution.
Emerging from a session in House Speaker Nancy Pelosi’s office that lasted over an hour, Treasury Secretary Steven Mnuchin said that without an agreement, the White House was prepared to live with a one-year extension of this year’s budget. That would prevent an enormous $125 billion in automatic cuts to defense and domestic programs that would otherwise be triggered by law, which both parties want to avoid.
Mnuchin said the administration would also agree to extend the federal debt limit for a year. The government is projected to deplete its legal ability to borrow money after the summer, which would prompt an unprecedented failure by the government to repay its debt that could rattle the world’s economy.
“The president has every intention of keeping the government open and keeping the soundness of the full faith and credit of the government,” Mnuchin told reporters. He said both sides agreed not to hold the debt limit “hostage to spending.”
In a joint statement issued after the meeting, Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) seemed to bristle at White House involvement in the negotiations. They said Democrats “are committed” to working with congressional Republicans to avert automatic spending cuts, the constraints of a budget freeze and the threat of a federal default.