By Robert Schroeder, MarketWatch
The House of Representatives on Thursday passed a two-year budget agreement that also lifts the U.S. debt limit, even as many Republicans defied President Donald Trump and panned what they said was runaway government spending.
By a vote of 284 to 149, lawmakers in the Democratic-led House approved the deal to suspend the borrowing limit until the end of July 2021 and set overall spending levels for fiscal 2020 and 2021. Federal spending on the Pentagon and domestic programs will increase by about $320 billion over current budget caps.
Trump pressed for the deal as recently as Thursday morning, saying on Twitter that House Republicans should support it since it “greatly helps our Military and our Vets.”
Yet 132 Republicans voted against it, amid complaints by lawmakers including Rep. Mike Johnson of Louisiana, who leads the conservative Republican Study Committee.
The agreement is “a massive spending deal that will further indebt future generations and remove reasonable safeguards to prevent the growth of government and the misuse of taxpayer dollars,” said Johnson and the RSC Steering Committee in a statement .
The deal is the product of negotiations between House Speaker Nancy Pelosi, a California Democrat, and Treasury Secretary Steven Mnuchin.
Pelosi said the bill meets the needs of American families and enhances national security, and by raising the debt limit, “we’re safeguarding the full faith and credit of the United States of America.”
The vote came a day before House lawmakers are scheduled to take their August recess.
The bill must still pass the Senate and be signed by Trump to become law.
The Trump administration earlier this month forecast that the budget deficit for the fiscal year ending Sept. 30 will top $1 trillion, up from a gap of $779 billion last year. Both government revenues and spending have hit records through the first nine months of the current fiscal year.
While growing deficits and the prospect of ballooning spending have rattled some in Washington, financial markets have shown few, if any, signs of concern.
The yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.72% has fallen from as high as 3.23% in November to just 2.08%. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.50% index, meanwhile, has climbed by about 20% so far this year.