More fiscal Stimulus coming if budget deal passes as Automatic spending cuts are eliminated.Take a look at the Highlighted and Underlined text,(my own) $320 B in new spending over next 2 years.When will treasuries start to care?
By Steven T. Dennis and Erik Wasson
(Bloomberg) — President Donald Trump has once again shoved
aside past Republican orthodoxy on debt and spending as he
announced a budget deal with House Speaker Nancy Pelosi that
likely ushers in a return to trillion-dollar deficits.
Trump once said he would eliminate the $22 trillion federal
debt, but the annual budget deficit is on track to top $1
trillion a year — swollen by bipartisan spending increases and
his tax cuts — with no real expectation of a change in
trajectory any time soon.
The deal, which still must clear Congress, ends the
automatic budget cuts enacted as a result of a showdown over the
debt limit in 2011, when the new Republican majority in the
House held federal borrowing authority hostage until President
Barack Obama agreed to a spending straitjacket.
The automatic spending cuts known as the sequester were
intended to provide an incentive to cut a bipartisan grand
bargain on reducing the national debt, but those efforts were
buried long ago.
Under the terms of the agreement, Republicans managed to
secure $738 billion in defense spending for 2020 and $741
billion for 2021, including funds for overseas operations that
aren’t subject to budget caps, while Democrats got $632 billion
in 2020 and $635 billion in 2021 for domestic spending. That
amounts to $320 billion boost in spending over two years
compared to lower budget caps that would have slashed spending
at the end of this year.
Trump has given a nod to budget cutting, but since taking
office he’s mostly cowed Republican deficit hawks into silence
by prioritizing funding the Defense Department and cutting
Pelosi, meanwhile, has maneuvered to increase spending on
domestic discretionary programs by more than $100 billion since
Trump took office.