OUT OF CONTROL: Congressional Leaders Agree on Budget Deal That Will Increase Spending by Hundreds of Billions

Senate Majority Leader Mitch McConnell

The US Treasury has already announced that it will need to go to the debt markets for $1 trillion in new borrowing this year. But apparently, that is not enough for Congress and the President.

Congressional leaders are reporting that they have reached an agreement on a two-year budget deal.

The agreement raises federal spending by almost $300 billion over two years above limits imposed by a 2011 budget law.!

The Wall Street Journal notes if approved by the GOP-controlled Congress, the deal would mark the triumph of defense hawks, who have pushed for higher military spending, over the dwindling number of conservatives focused on reducing the federal budget deficit.

The budget deal would raise military spending by $80 billion through the rest of fiscal year, which runs through September, and by $85 billion in fiscal year 2019, according to a congressional aide familiar with the agreement.

Congressional leaders also agreed to raise nondefense spending by $63 billion in this fiscal year and $68 billion the following year, according to the aide, addressing demands from Democrats, who had pushed for boosting domestic spending.

Bottom line: This will require the Treasury to drain even more money out of the private capital sector. The stock market has turned lower on the news.

    -RW