House Speaker Nancy Pelosi on Thursday said she wouldn’t let the U.S. default on its debt but continued to insist on boosting spending limits on domestic programs, as budget talks made little progress.
“We will never question the full faith and credit of the United States of America,” the California Democrat said at her weekly news briefing, referring to the federal debt ceiling. “What we have said, though, is that we will fight for meeting the needs of the American people.”
Pelosi spoke to reporters a day after White House officials and congressional leaders clashed in a meeting over budget talks to avoid a partial government shutdown later this year.
Treasury Secretary Steven Mnuchin said that without a deal, the Trump administration was ready to extend current government funding for a year and also to suspend the federal debt ceiling for a year. Federal agencies are funded through the end of the fiscal year on Sept. 30.
Talks between the administration and lawmakers are also aimed at averting automatic spending cuts in domestic and defense programs. Without an agreement, domestic spending for fiscal 2020 would be slashed by $55 billion, while defense spending would be cut by $71 billion compared to fiscal 2019 levels.
Pelosi said Thursday that her position hadn’t changed and that raising spending limits on domestic programs and addressing the debt ceiling must be done “sequentially.”
She disputed a characterization by acting White House chief of staff Mick Mulvaney that she’d changed her position on spending and the debt limit.
“He has no credibility on the subject whatsoever,” Pelosi said, referring incorrectly to him as “Mike” Mulvaney.
Tuesday’s meeting ended in finger-pointing, with Mulvaney charging that Democrats had boosted the amount of domestic spending they were seeking to $647 billion from $639 billion.
“Last time I checked that’s not how you compromise,” Mulvaney said. Meanwhile, Democratic aides disputed that the figure was an increase.
The bond market has basically ignored the dispute, as the yield on the benchmark 10-year
as dropped below 2% from over 3% as recently as November. That means it’s cheaper for the U.S. government to finance its borrowing.