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Trump signs budget deal and suspends debt ceiling until 2021

Budget deal raises national debt concerns
New budget deal raises concerns about national debt 09:29

President Trump signed budget legislation which suspends the debt ceiling for two years Friday afternoon. The Senate passed the deal, cut between the White House and Democratic congressional leaders, on Thursday. The budget will raise spending by $324 billion and would also suspend the debt ceiling until July 2021, eliminating the prospect of an ugly battle before the 2020 election.

The bill passed the Senate on a bipartisan basis with 67 yeas to 28 nays.

Last week, the House passed the two-year spending and debt limit deal 284 to 149, with 219 Democrats voting in favor and 16 voting against. Sixty-five Republicans supported the measure. However, some fiscal hawks in the Republican Party opposed the bill.

Here is what you need to know about the budget deal:

The deal significantly increases spending

The two-year budget will increase spending by $320 billion and allows the government to keep borrowing, even as the federal deficit approaches $1 trillion. The widening deficit, which was $587 billion in 2016, is due in part to increased government spending and the $1.5 trillion tax cut package signed by Mr. Trump in 2017.

Debt goes up

The government's debt has increased significantly since Mr. Trump took office in 2017. When he became president, the national debt was $19 trillion, and it's now reached a high of $22 trillion. In 2016, the president promised he'd eliminate the national debt over an eight-year period.

Military programs will get a boost

Spending on military programs will increase under the budget deal. Since he took office, Mr. Trump has repeatedly said he'd increase military spending. 

It will also include increases in spending on domestic programs, a concession for congressional Democrats. According to the New York Times, this increase in domestic spending includes $2.5 billion for the 2020 census.

In a letter to House Democrats urging them to vote for the bill, Pelosi noted that "non-defense budget authority exceeds the defense number by $10 billion over the next two years," and that "Democrats have secured an increase of more than $100 billion in funding for domestic priorities since President Trump took office." Essentially, Democrats are happy because they get greater domestic spending, while Mr. Trump keeps his promise to increase military spending.

The increase in spending will be partially offset by $77 billion in cuts.

Democrats also agreed not to include any "poison pills" in the final bill — such as prohibiting Mr. Trump from using Pentagon money to fund the building of a border wall. Some progressives are upset that Mr. Trump will still have the ability to use this to fund the wall under his declared national emergency.

"The way it is right now, I will not vote for it," Sen. Patrick Leahy told Politico earlier this month. "The other 99 can vote for it."

Republicans are mixed

Ahead of the vote, some Republicans said they weren't entirely happy with the bill.

"I have some concerns," Sen. Tim Scott of South Carolina said on Wednesday, pointing to the huge spending increase. "Caps are essentially gone forever," and he wondered, "what is the long-term impact on the average person in our country?" The budget caps, put in place in 2011 to control government spending will expire in 2021, and this deal exceeds the caps.

Sen. John Kennedy, of Louisiana, said he would vote "no" because he's not comfortable with the spending increases. He supports raising defense spending and said in the short term, he welcomes the idea that it might bring "a little peace to this place," though he added, "I'm not much of a believer in peace at any cost."

"Everybody says they want to reduce spending, he noted, "but it's like going to heaven. Everybody wants to go to heaven. Nobody's quite ready to make the trip. And that's where it is with reducing spending," he noted. "And put me down as a 'no' dog." 

Sen. Rand Paul attempted to add an amendment that would cap annual spending at lower levels, although it reached the requisite 60 votes to be added to the bill.

"Today is the final nail in the coffin. The tea party is no more," Paul told Roll Call. "The budget deal today allows unlimited borrowing for nearly two years ... Fiscal conservatives, those who remain, should be in mourning."

Trump ally Sen. Lindsey Graham declared he's a yes vote for what amounts to a "big win for the military." He scoffed at senators who'd hold the line on military spending without approving similar increases that Democrats want in non-defense sectors. 

"What are your options? If you vote against it, then you should be in charge of negotiating the New Deal," he told reporters. "The House Democratic caucus wants more spending for non-defense. If we increase defense spending, that dynamic is not going to change." 

The demise of the Budget Control Act

In 2011, House Republicans refused to raise the debt ceiling without Congress addressing national debt, forcing President Obama to sign the Budget Control Act or risk a sequester. The act called for Congress to find $1 trillion in government spending cuts by the end of the year. Mick Mulvaney, now the chief of staff for Mr. Trump, was one of the Republican congressmen who blocked raising the debt limit, pushing Obama to sign the act into law.

As Congress failed to adequately cut spending, sequestration was automatically triggered in 2013, with annual budget caps through 2021. However, Congress has repeatedly waived the caps since 2014. The new budget deal also waives the caps, and sets the budget through 2021 -- allowing the Budget Control Act to expire.

Kathryn Watson contributed to this report

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