House Speaker Nancy Pelosi and other congressional leaders have arranged to meet with Treasury Secretary Steven Mnuchin and acting White House chief of staff Mick Mulvaney next week to explore an agreement to increase the government's borrowing cap as well as legislation to stave off a severe round of cuts to agency budgets and the Pentagon.
A spokesman for Pelosi on Friday confirmed the meeting and said the two politically nettlesome items wouldn't necessarily be paired together. Both are among the few must-do items for Pelosi, D-Calif., and her powerful Senate GOP counterpart, Mitch McConnell of Kentucky.
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Failure to increase the government's debt limit could cause a catastrophic first-ever default on U.S. obligations, while lifting so-called spending "caps" is needed for a successful bipartisan round of spending bills. Failure to agree on the spending side of the ledger could ultimately spark a round of automatic budget cuts called sequestration of well more than $100 billion that all sides are eager to avoid.
The government has never defaulted on its debt or other obligations like Social Security, but increasing the debt limit can be a complicated, heavy lift. And many GOP conservatives dislike spending agreements that allow both sides to get around tight limits on spending for agency operations.
Conservative forces inside the White House have resisted the idea of an agreement on spending caps, but it's commonly assumed that it would advance along with the debt limit legislation.