No agreement on budget caps in sight ahead of Memorial Day recess

No agreement on budget caps in sight ahead of Memorial Day recess
© Greg Nash

The odds of congressional negotiators reaching a deal to lift budget caps and raise the debt ceiling ahead of their Memorial Day recess appear to be growing increasingly grim despite top lawmakers's earlier optimism. 

"The first meeting went pretty well the second meeting not as well,” House Minority Leader Kevin McCarthyKevin Owen McCarthyHarris introduces bill to prevent California wildfires McCarthy says views on impeachment won't change even if Taylor's testimony is confirmed House Republicans call impeachment hearing 'boring,' dismiss Taylor testimony as hearsay MORE (R-Calif.) said Wednesday. “I think it will take a little more time."

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Disagreements over nondefense discretionary spending remain a key sticking point between parties, with Republicans arguing Democrats are requesting “obscene” levels of spending. And while offers continue to be exchanged, no additional meetings between the “big four” — Speaker Nancy PelosiNancy PelosiPelosi: Trump tweets on Yovanovitch show his 'insecurity as an imposter' On The Money: Trump asks Supreme Court to block Dem subpoena for financial records | Kudlow 'very optimistic' for new NAFTA deal | House passes Ex-Im Bank bill opposed by Trump, McConnell Overnight Defense: Ex-Ukraine ambassador offers dramatic day of testimony | Talks of 'crisis' at State Department | Trump tweets criticism of envoy during hearing | Dems warn against 'witness intimidation' | Trump defends his 'freedom of speech' MORE (D-Calif.) House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOn The Money: Trump asks Supreme Court to block Dem subpoena for financial records | Kudlow 'very optimistic' for new NAFTA deal | House passes Ex-Im Bank bill opposed by Trump, McConnell Top House Democrats ask for review of DHS appointments Warren promises gradual move toward 'Medicare for All' in first 100 days MORE (R-Ky.) and Senate Minority Leader Chuck SchumerCharles (Chuck) Ellis SchumerOvernight Health Care: Trump officials making changes to drug pricing proposal | House panel advances flavored e-cig ban | Senators press FDA tobacco chief on vaping ban Chad Wolf becomes acting DHS secretary Schumer blocks drug pricing measure during Senate fight, seeking larger action MORE (D-N.Y.) — and administration officials have been scheduled, a source with knowledge of the discussions said.

The House is scheduled to fly out Thursday afternoon.

Negotiators seemed poised to strike a deal after a scheduled meeting ran long and resulted in a second meeting Tuesday. Senate Majority Leader Mitch McConnell (R-Ky.) said he expected an agreement by the end of the day.

Instead, the second meeting let out quickly with no deal.

"There are still some significant issues outstanding, particularly the domestic-side spending issues -- things like health care, infrastructure and things that average middle-class folks need,”  Sen. Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerOvernight Health Care: Trump officials making changes to drug pricing proposal | House panel advances flavored e-cig ban | Senators press FDA tobacco chief on vaping ban Chad Wolf becomes acting DHS secretary Schumer blocks drug pricing measure during Senate fight, seeking larger action MORE (D-N.Y.) said. 

Despite the impasse over nondefense spending, the group has been able to reach a general consensus around setting defense spending levels at $733 billion (including off-book spending) and a debt ceiling lift. 

Pressure for Congress to take action on raising the debt ceiling was amplified Wednesday after Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report — Public impeachment drama resumes today On The Money: Trump appeals to Supreme Court to keep tax returns from NY prosecutors | Pelosi says deal on new NAFTA 'imminent' | Mnuchin downplays shutdown threat | Trump hits Fed after Walmart boasts strong earnings Lawmakers aim for agreement on top-line spending by next week MORE warned the U.S. government could face a default by late-summer, sooner than most analysts projected.

Democrats want spending for two programs – the 2020 census and the VA mission act – to be moved to off-budget accounts, leaving more room for other domestic priorities.

House Democrats on Wednesday approved a bill that included some $8.5 billion in spending for the 2020 census. The VA Mission Act, which had previously been funded through automatic mandatory spending, is due to move nearly $9 billion onto the discretionary side of the ledger this year.

A House aide said it was "more likely that we’ll discover the moon is made of green cheese” than strike a deal this week.