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BREAKING NEWS

White House, Democrats close to deal on budget, debt ceiling

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Speaker of the House Nancy Pelosi, D-Calif., and Treasury Secretary Steven
Speaker of the House Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin. -
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The White House and House Democrats have a "near-final agreement" on a budget deal that would suspend the debt limit until mid-2021, a source close to the talks told NBC News on Monday.

Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., have been speaking regularly to hammer out the deal, and the two sides are down to discussing some issues related to technical language, the source said.

The near-final two-year agreement would suspend the debt limit until July 31, 2021, and put an end to an automatic spending cuts that would have kicked in without a deal.

Mnuchin had warned in recent weeks that the government could run out of money sooner than expected, in early September, which would put the U.S. in danger of defaulting on its debt for the first time if the debt ceiling were not increased before Congress left for its August recess.

The near-final deal is a traditional bipartisan budget agreement in which both sides will be unhappy with some aspects — a true compromise, the source said. The near-final agreement would include parity in increases in domestic and defense spending and about $75 billion in spending offsets.

Mnuchin has been keeping President Donald Trump and congressional Republicans updated regularly, the source said.

The treasury secretarytold CNBC last Thursday that he'd been in regular contact with Pelosi in an effort to hammer out an agreement.

"I've been having daily conversations with the speaker," Mnuchin said. "I think that everybody is in agreement that we won't do anything that puts the U.S. government at risk in terms of our issue of defaulting. And I think thatnobody wants a shutdown in any scenario."

Pelosi told reporters last week that she hoped to have a deal on the House floor by Thursday "so that we can send it in a timely fashion to the Senate so that they can go through their, shall we say, particularly senatorial process to get it done in time before they leave" for their August recess.