House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin reached fiscal deal to lift the nation’s debt limit and dramatically raise federal spending levels.
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President Donald Trump said a budget deal has been reached with House and Senate leaders to raise spending levels by almost $320 billion over two years and suspend the debt ceiling until July 2021, after the presidential election.
The deal, which still must pass both chambers of Congress and needs Trump’s signature, would raise spending by nearly $50 billion next fiscal year above current levels.
Suspending the debt ceiling for two years is like asking your bank to raise your credit limit for whatever you need to spend after you’ve maxed out your credit card, said Boyd Matheson on KSL’s radio program “Inside Sources” on Tuesday.
“There is no bank on this Earth or any galaxy in the universe” that would agree to that, Matheson said.
The July 2021 expiration date gives the next president a six-month window to spend without limit.
This is all happening as Congress leaves Washington at the end of the week its August recess.
“I always said when I was chief of staff [for Sen. Mike Lee] that the ultimate way to get something passed is the smell of jet fumes,” said Matheson. “When members of Congress can smell jet fumes from their planes that will take them away from Washinton for a few weeks, it’s amazing what can get done.”
Back in 2010, Adm. Mike Mullen, former chairman of the Joint Chiefs of Staff, warned that the national debt was the greatest threat to the United States.
Since that time, members of both parties have ignored the debt, adding trillions of dollars to it — which is currently at about $22 trillion.
“That’s the real collusion,” said Matheson. “You can’t get that much debt without collusion. If you have conflict in a relationship, you’re not spending.”
If we just reduce our spending, that’s not enough, either, said Matheson, because you still have to pay back what you’ve already spent. And that’s the U.S. debt — what has already been spent.
The Congressional Budget Office (CBO) projects that interest payments will rise from $389 billion in fiscal year 2019 to $914 billion in 2028.
“With this agreement, we strive to avoid another government shutdown, which is so harmful to meeting the needs of the American people and honoring the work of our public employees,” House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement.
They are hailing no government shutdowns because this deal suspends the debt ceiling for two years, said Matheson.
“It will allow both parties to not have to worry about defending spending during the 2020 election campaign,” he said, “and allow whoever wins the White House to go very aggressive in their first six months in office starting in January of 2021 and spend away.”
And, of course, Trump gets to hail the deal as well.