Pelosi: No debt ceiling increase until deal on spending caps

Pelosi: No debt ceiling increase until deal on spending caps
© Aaron Schwartz

Speaker Nancy PelosiNancy PelosiPressure builds for coronavirus relief with no clear path to deal Top GOP senator warns government funding deal unlikely this week Houston will send residents checks of up to ,200 for pandemic relief MORE (D-Calif.) on Thursday said she would not agree to raise the debt ceiling until Congress strikes a deal with the White House to raise spending caps for government funding.

“When we lift the caps then we can talk about lifting the debt ceiling — that would have to come second or simultaneous, but not before lifting the caps,” Pelosi told reporters at a press conference in the Capitol.


Congress will need to suspend or increase the federal debt limit by the fall in order to avoid defaulting on its debt. A debt default would roil global financial markets and significantly damage the Treasury Department's ability to raise money by selling government bonds.

Negotiations over the debt limit have been tied to discussions over raising the spending caps debate, a move that is needed to prevent a significant decline in government spending. Inaction would see both defense and domestic spending drop by about 10 percent in fiscal 2020, which begins Oct. 1.

The White House has demanded that the statutory caps remain in place while raising defense spending through a budget maneuver. House Democrats, meanwhile, have been passing spending bills that would increase funding levels by $17 billion for defense and $34 billion for nondefense.

Negotiations between the Democratic-controlled House, the GOP-led Senate and the White House have made little headway in recent months.
An eventual deal is expected to address both the debt ceiling and spending caps in an effort to avoid a government shutdown in the fall. Even if the caps are increased, Congress will still need to pass spending bills that Trump is willing to sign into law.
Updated at 3:15 p.m.