President Trump said he thinks negotiations to lift US borrowing authority are in “good shape,” despite House Speaker Nancy Pelosi rejecting a White House demand for $150 billion in spending cuts earlier on Friday.
Trump called the debt ceiling a “sacred element” and told reporters at the White House: “I can’t imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge. I would have to assume we’re in great shape.”
Pelosi has sought to pair a deal on government spending levels with an agreement to raise the debt ceiling.
The extended talks mean Congress and the White House will push up against Pelosi’s deadline for a deal before the House leaves town for its August recess. The Trump administration late Thursday gave Democrats a list of $574 billion in savings options from which to find $150 billion to offset Pelosi’s proposed spending increases over the next two years.
A Democratic official who asked not to be identified discussing the closed-door talks described the White House demand as a starting point and said Pelosi wil continue negotiating.
An administration official said Friday morning that the White House remains optimistic about reaching a deal but that talks will likely continue at the staff level over the weekend and into next week.
Roughly half of the administration proposals are straight spending cuts while the rest would result from overhauling various government programs, two people familiar with the proposal said. One proposal is a drug pricing plan from Trump’s fiscal 2020 budget, which the White House says would save $115 billion, one of the people said. Much of the plan is opposed by the pharmaceutical industry.
There are no revenue or tax increases on the White House list.
The suggestions also include a proposal to extend budget caps for two extra years after they expire in 2021 in order to save another $516 billion. Under current law, $126 billion in automatic cuts would take effect by the end of the calendar year if the caps aren’t raised.
Pelosi and Treasury Secretary Steven Mnuchin said Thursday they were close to an agreement, continuing their conversations even as Mnuchin was in France for a meeting of the Group of Seven. Congressional leaders have been pushing the White House to agree to spending levels for next year, which would allow a budget caps bill to move with the debt limit fix.
Pelosi on Thursday said she wanted to file a bill this week to set up House votes next week on the package.
“Nothing is agreed to until everything is agreed to, but we are on our way,” the California Democrat told reporters at the US Capitol. “We have a path.”
The Treasury Department has been using so-called extraordinary measures to meet debt obligations since March 2, when the US reached its $22 trillion limit on borrowing.
Mnuchin has said that under one of the Treasury Department’s most conservative estimates, the US will be at risk of defaulting on payment obligations in early September -- before lawmakers are scheduled to return from their summer recess on Sept. 9.