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Thursday, 3 August 2017

Politics: Trump's budget director has caved on one of the biggest fights in Washington

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OMB director Mulvaney said on Thursday that he supported a clean increase for the debt ceiling, rather than a piece of legislation that included spending cuts.

The Trump administration is approaching cohesion on one of the biggest issues facing the US economy over the next two months.

Office of Management and Budget director Mick Mulvaney told reporters Thursday that he supports a clean increase for the debt ceiling, rather than including spending cuts or other riders in legislation to hike the debt limit.

Mulvaney had previously said that any legislation taken up to raise the ceiling should include cuts.

When asked about his position, Mulvaney said he was for "the simplest debt ceiling increase that we can get."

The debt limit, the level of outstanding debt the federal government is allowed to carry, was technically hit in March. Since then, the Treasury Department has been using "extraordinary measures" to prevent a breach of the limit. The department has said Congress must pass a bill to increase the limit by the end of September to avoid a breach.

If it were to be breached, it would likely lead to an economic crisis and possible US default on its obligations.

Mulvaney's former position stood in contrast to that of Treasury Secretary Steven Mnuchin, who has been pushing Congress to pass a clean hike as soon as possible. In the meeting with reporters, Mulvaney deferred to Mnuchin's position.

"Steve Mnuchin speaks for the administration when it comes to – on the debt ceiling," said the OMB director. "We’ve heard that out of the President’s mouth, and I respect that, in fact that’s the right way to do it."

Trump told Republican leaders in Congress that Mnuchin was in charge of the negotiations for the White House in June.

The call for spending cuts has been a constant on conservative Republican lawmakers' wish lists. The House Freedom Caucus, of which Mulvaney was once a member before he joined the administration, has already made it clear it would only support a debt ceiling increase if the legislation came with spending cuts.

The division within the Republican conference means that GOP congressional leaders will likely require support from Democrats to pass debt-ceiling legislation.

According to reports, negotiations between congressional leaders and Mnuchin have stalled over the spending-cut issue.

There are 12 working days in which both the House and Senate are in session before the Treasury's deadline.



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