Steven Mnuchin. Picture: REUTERS
Steven Mnuchin. Picture: REUTERS

Washington — The US Senate passed a sweeping, bipartisan fiscal plan on Thursday that boosts federal spending by $320bn and suspends the debt ceiling for two years, beyond the next presidential election.

The budget deal was approved by a vote of 67 to 28 in the Republican-controlled Senate, a week after it passed in the Democratic-majority House of Representatives.

It sets discretionary spending at more than $1.3-trillion for fiscal year 2020 — a significant increase of budget caps on defence and domestic outlays.

By suspending the debt ceiling until July 31, 2021, it allows the federal government to borrow more money and avoid a disastrous default in the coming months.

Several Republican senators voted against the measure including Ted Cruz of Texas, Rick Scott of Florida and Mitt Romney of Utah.

‘Missed opportunity’

“This budget deal is yet another missed opportunity to rein in excessive government spending,” Cruz said in a statement.

“Unfortunately, this bill perpetuates Democrats’ big government programmes, increases our deficits, and plunges us further into debt.”

Treasury secretary Steven Mnuchin had warned recently that without an agreement, the government could run out of funds in early September — while Congress was still on its summer recess.

The bill now goes to President Donald Trump for his signature.

Trump welcomed the deal, saying it was “phenomenal for our Great Military, our Vets, and Jobs, Jobs, Jobs!

“Two year deal gets us past the Election,” he said. “Go for it Republicans, there is always plenty of time to CUT!”

While Trump has hailed the agreement as a “real compromise” that boosts funding for the military, the deal assures that Washington remains on a borrowing binge, a significant setback for the White House’s stated goal of reining in expenditures.

The agreement includes roughly $75bn  in spending increase offsets, substantially less than Trump’s administration had sought.

The plan is expected to push the annual budget deficit to more than $1-trillion next year.

Despite Trump’s support, some two-thirds of House Republicans voted against the measure, led by fiscal conservatives who expressed discomfort at the extra red ink and the behind-the-scenes nature of the negotiations between House leaders and Mnuchin.

AFP