Trump signs deal to increase govt spending by $US300b
US president Donald Trump has signed a budget deal that will see close to $US300 billion in new government spending over the next two years, facilitated by the temporary suspension of federal debt limits.
The spending bill, which ended a brief government shutdown, is a messy compromise, necessitated by the fact various Repubublicans in the Senate and House opposed the legislation as fiscally irresponsible — meaning despite the party's majority in both houses, Republican leadership had to buy the support of Democrats to get it through.
The $US300 billion consists of a hike in military spending requested by the Trump administration, around $US90 billion for disaster relief for states hit by last year's destructive hurricanes, plus top-ups to various domestic programmes required to get Democrats onboard.
There was talk that Mr Trump favoured an extended shutdown to force Democrats into concessions on immigration issues, but in the end, the president stayed largely on the sidelines.
Broadly, there was relief that the two-year deal would break the monthly cycle of stand-off negotiations as the government brushed up against its debt limits.
Just signed Bill. Our Military will now be stronger than ever before. We love and need our Military and gave them everything — and more. First time this has happened in a long time. Also means JOBS, JOBS, JOBS!— Donald J. Trump (@realDonaldTrump) February 9, 2018
However, some Republicans continued to voice their opposition.
"I believe it is a monumental mistake and a sad day," said House of Representatives chairman Jeb Hensarling in a statement.
“By eviscerating the 2011 budget caps and agreeing to a debt ceiling increase with zero spending reforms, I feel Republicans are allowing the removal of what little spending discipline remains in Washington. With rising interest rates and baby boomers continuing to pressure our entitlement programs, there are now trillion dollar deficits as far as the eye can see," the Texas Republican said.
“There is a true spending-driven debt crisis in America. It is the greatest existential threat to our country that receives little to no attention in Washington."
Make no mistake, I will always stand up for fiscal responsibility, regardless of which party is in power, and I will continue to call the Republican Party home to the ideas that led to Americans trusting us with government in the first place.— Senator Rand Paul (@RandPaul) February 9, 2018
And Republican Senator Rand Paul — who forced a brief government shutdown — by stalling the Senate vote with a multi-hour speech said it was hypocrisy for Republicans to champion debt limits when President Barak Obama was in power, then vote for their suspension under the Trump administration.
And while Mr Trump hailed the deal for boosting military spending, Senator Paul maintained a larger deficit would make America weaker.
Congress has already passed permanent tax cuts for business and temporary tax cuts (until 2025) for some individuals, a move that the independent Office of Budget Management says will add $US1.5 billion to the US's $US20 trillion deficit. Boosters say the stimulus of tax cuts will mean they pay for themselves (though some have also fretted that about the potential inflationary effect, which in turn has contributed to this week's turbulence on Wall Street).
On Tuesday, Mr Trump is expected to reveal details of his $1.5 trillion infrastructure plan, originally due to be detailed around the time of its State of the Union address two weeks ago
The president has previously indicated the infrastructure spending plan will include incentives for private sector participation.
Source: Dow Jones
Wall Street finishes in positive territory
Wall Street had another volatile session today, but all the major indexes closed in the green.
The Dow Jones Industrial Average was up 1.38%, the S&P 500 up 1.49% and the Nasdaq up 1.44%.