Monday, July 22, 2019

Budget deal likely to include few or no actual spending cuts while lifting debt limit for two years

WaPo take:

The pending deal would seek to extend the debt ceiling and set new spending levels for two years, ratcheting back the budget brinkmanship that led to a record-long government shutdown earlier this year. 
But instead of the $150 billion in new spending cuts recently demanded by White House acting budget director Russell Vought, the agreement would include a significantly lower amount of reductions. And those reductions aren’t expected to represent actual spending cuts, in part because most would take place in future years and likely be reversed by Congress at a later date.

This and Fed going to quickly cut the IOR policy rate down towards 2% ...

We may be entering into a nice pre-election 18 month period of 'benign neglect' by policymakers...