A key budget meeting between bipartisan congressional leaders and the White House on Wednesday produced no progress even as critical deadlines loom for keeping the government open and avoiding a potentially disastrous default.
White House acting chief of staff Mick Mulvaney exited the meeting in House Speaker Nancy Pelosi’s office saying the two sides were even further apart than before, contending Democrats were pushing for higher levels of spending than at their last meeting, in May.
“Last time I checked, that’s not how you compromise,” Mulvaney said.
Democrats disputed Mulvaney’s argument while offering sniping of their own about President Trump’s involvement in talks.
“While we did not reach an agreement, today’s conversation advanced our bipartisan discussions,” Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) said in a joint statement. “If the House and Senate could work their will without interference from the president, we could come to a good agreement much more quickly.”
The failed effort at renewed bipartisan budget talks comes as congressional leaders and the administration are eyeing an alarming fiscal collision in September. On Sept. 30, government agencies will run out of money and begin to shut down if Congress and Trump don’t agree on new spending bills. And around the same time, Congress and Trump will need to raise the debt ceiling, which is the limit on how much the federal government can borrow to pay its bills.
If the debt ceiling is not raised, the Treasury Department won’t have enough money to cover all its payments and could fall behind on bills. This could lead interest rates to spike and could spur another financial crisis.
Additionally, austere budget caps known as the sequester will snap into place early next year and slash domestic and military spending unless a deal is reached to raise them.
Treasury Secretary Steven Mnuchin said that if no deal is reached to raise budget caps, the administration would support a one-year “continuing resolution” that would continue government spending at existing levels, coupled with a one-year increase in the debt ceiling. He characterized that as a compromise because the administration in the past supported allowing the sequester budget caps to take effect, whereas a “continuing resolution,” or CR, would require lifting them.
“I think as you know we’ve talked about sequester in the past,” Mnuchin told reporters as he left the meeting. “Again, in an effort of compromise, we made it very clear that we are taking that off the table, that if we can’t reach a spending agreement we are prepared to do a one-year CR and a one-year debt ceiling. The president has every intention of keeping the government open and keeping the soundness of the full faith and credit of the government.”
But Democrats said they opposed the administration’s suggestion.
“A one-year CR is bad policy, it’s bad politics, and it’s a fallback. We should be negotiating a bill,” Schumer told reporters. “We want to do better.”
Heading into the meeting, Senate Republicans and the White House hadn’t even been able to bridge divisions of their own over spending levels. But Democrats said that on Wednesday, Senate Majority Leader Mitch McConnell (R-Ky.) was deferential to administration officials and their preferred approach.
“He’s just in obeisance to the White House,” Schumer said of McConnell.
McConnell’s spokesman Doug Andres responded, saying: “The Leader has made clear that any deal has to be bipartisan, and that includes the president’s signature.”
Illustrating the divide between the two parties, even as the meeting was underway the House passed a massive $983 billion spending bill for four agencies, including the Pentagon and the Health and Human Services Department, at domestic spending levels much higher than Republicans and the White House would support.
The spending bills, which passed on a near-party-line vote, also contained a number of policy provisions that are non-starters for Republicans and Trump. Among these are provisions blocking the administration from diverting funds to build Trump’s southern border wall, keeping the United States in the Paris climate agreement and repealing the so-called “global gag rule,” which blocks U.S. support for foreign nongovernmental organizations that engage in abortion-related services or advocacy.
In one matter related to abortion, however, Democrats chose not to try to pick a fight with the GOP, and that caused some controversy on the presidential campaign trail and with House liberals, a handful of whom opposed the bill on final passage. The Health and Human Services spending bill retains the Hyde Amendment, a long-standing ban on taxpayer funding for abortions.
House Democratic leaders said that despite their opposition to the Hyde language, the reality was that the White House would reject its repeal and that their energy was better spent fending off new GOP attacks on abortion. But earlier this month, former vice president Joe Biden reversed himself while under attack from other Democratic presidential candidates and announced he no longer supports preserving the Hyde Amendment.
Emily Davies and Damian Paletta contributed to this report.