White House Advocating One-Year Fallback Plan After Fiscal 2020 Budget Talks Fail

White House Advocating One-Year Fallback Plan After Fiscal 2020 Budget Talks Fail

The White House is focusing on a fallback proposal if no comprehensive spending deal can be reached to avoid a fiscal crisis this fall, CQ reported Thursday.

After senior administration officials and top congressional leaders failed Wednesday to agree on a two-year overall spending agreement, Treasury Secretary Steven Mnuchin advocated that the White House would seek a one-year suspension of mandatory spending caps to avoid steep sequestration cuts starting Oct. 1.

The move would also require a stopgap measure to extend current funding levels for fiscal 2020, a solution that is uncertain to get Democrats’ support, Politico reported.

Both parties have expressed doubts about prospects for a short-term agreement as they seek a broader deal that would lift mandatory spending caps imposed under a 2011 deficit reduction act.

After Wednesday’s meeting, Senate Appropriations Chairman Richard Shelby (R-Ala.) was reserved about other solutions to break the budget stalemate.

“I like a two-year deal myself, but we considered a lot of things,” he said.

Without a budget deal or a suspension of spending caps, across the board cuts would go into effect by about 10%, or $125 billion in fiscal year 2020.

The fallback proposal has signaled increasing pessimism that a deal can be reached before late September to avoid a partial government shutdown and sequestration.

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