Senate leaders unveiled a massive two-year budget deal Wednesday, a major victory for both parties that could prevent a government shutdown at the end of this week and increase the federal government's spending. But the plan still needs to pass the House, where it's already facing strong headwinds.
Majority Leader Mitch McConnell unveiled the deal with Minority Leader Chuck Schumer on the Senate floor, which would boost military and non-defense spending by $300 billion over the next two years as well as add more than $80 billion in disaster relief. About $160 billion would go to the Pentagon and about $128 billion would to non-defense programs. The agreement also includes aid to respond to recent natural disasters.
The key outlying issue appears to be for how long to hike the debt ceiling, which the US is expected to hit next month, though the exact parameters were still being negotiated when the deal was announced.
"I am pleased to announce that our bipartisan, bicameral negotiations on defense spending and other priorities have yielded a significant agreement," McConnell said in his announcement.
Later Wednesday, the Senate still plans to vote on the House-passed standalone defense funding bill, which is expected to fail at a procedural vote. Then senators take up the House-passed budget continuing resolution. The cloture vote on that is expected to be Thursday, at which point they'll strip the House language, and replace it with the Senate language.
While that bill is expected to pass easily in the Senate, the House will be a tougher sell. The caps deal will likely need Democratic support and some Democrats have been emphatic that they don't want to agree to raise budget caps until they have assurances that recipients of Deferred Action for Childhood Arrivals immigration program will be protected. There's no sign indication from congressional negotiators that that will be the case.
The effort got a boost from President Donald Trump on Wednesday evening.
"The Budget Agreement today is so important for our great Military," Trump tweeted. "It ends the dangerous sequester and gives Secretary Mattis what he needs to keep America Great. Republicans and Democrats must support our troops and support this Bill!"
Debt limit timing is a sticking point
Some form of a debt ceiling increase will be in the final deal, two sources with direct knowledge tell CNN. What's being worked out is the timing. The White House has been pushing for an increase that would last two years. Congressional negotiators have been pushing for a less aggressive version.
Asked about the debt ceiling parameters, the Senate's No. 2 Republican, Sen. John Cornyn of Texas, replied, "Apparently that has not been closed out. Some discussion of that remains."
Sen. Roy Blunt of Missouri, who is also a member of GOP Senate leadership, said he expected the plan to include a debt increase of one year, or until March 2019. He said he expects it to pass the House because of the amount of defense spending included.
The House holds the next fight
Conservatives in the House are expected to balk at a deal that raises spending by $300 billion over the next two years, meaning Democrats are expected to be needed to pass this plan.
Just before the deal was formally made public, House Democratic Leader Nancy Pelosi of California announced she was opposed to it, and while she didn't encourage her caucus to vote "no," her statement raises questions about whether there will ultimately be enough Democratic support in the House to pass the bill.
"This morning, we took a measure of our Caucus because the package does nothing to advance bipartisan legislation to protect Dreamers in the House," Pelosi said in a statement. "Without a commitment from Speaker Ryan comparable to the commitment from Leader McConnell, this package does not have my support."
She went on to publicly read letters from DACA recipients on the House floor, and in the process broke the record for longest House floor speech, starting just after 10 a.m. ET. She was wrapped up at of 6:10 p.m. ET, 8 hours later.
At the same time McConnell was announcing the plan, House Speaker Paul Ryan was telling his members behind closed doors that the agreement has been reached, according to a member in the room. Before it was announced, Republican members of the conservative House Freedom Caucus loudly panned the increased spending as fiscally irresponsible and warned it would add to burgeoning deficits.
The House passed a short-term spending bill Tuesday night aimed at keeping the government open. That bill also included a full year of funding for defense spending. Now that a caps deal has been made, Senate leaders are expected to strip out the full year of funding for defense, attach the caps deal and hope the House can pass their breakthrough bill.
Deal clears the deck for Capitol Hill
The deal would clear the deck for Congress. If the spending numbers are agreed to, lawmakers could concentrate on tackling other issues like immigration and infrastructure rather than careening from one budget crisis to the next. The bill would also provide long overdue disaster funding for Texas, Florida and Puerto Rico months after hurricanes devastated homes, infrastructure and coastlines there.
Raising the budget caps has been on the table for months but has always been entangled with the contentious immigration debate. Pelosi's statement reveals the deep schisms within the Democratic Party between those willing to show some flexibility now after a three-day shutdown and those who are dug in on immigration.
This story has been updated and will continue to update with new developments.