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Congress and Trump Agree to Spending Deal that Means Another $1 Trillion Deficit

07-23-2019
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Dan Celia, CEO, and president of Financial Issues Stewardship Ministries appeared on Tuesday's CBN Newswatch program to discuss how the US government could raise the minimum wage without hurting the economy.

Compromise – that's how President Trump describes the budget deal he has just reached with Speaker of the House of Representatives Nancy Pelosi. The deal means there won't be another government shutdown or any danger of a US default.

Pelosi and the president reached the agreement Monday afternoon, allowing the government to continue borrowing money to pay its bills and sets funding levels for the next two years.

Critics say it does nothing to rein in Washington's out-of-control spending.

Earlier this week, the White House said it expects deficit spending in 2019 to reach $1 trillion. The overall federal debt is expected to hit $22 trillion.

As a matter of fact, some conservative critics of the president say when it comes to the budget, he's really not much different than his predecessors – Obama and Bush. 

The president has suggested that he will work on cutting the deficit if re-elected to a second term.

In all fairness to the president and Congress, only about one-quarter of the $4 trillion annual federal budget is discretionary spending – things like education, healthcare, housing, agriculture, and the military.

And with the national debt nearing $22 trillion, about $400 billion just goes to pay interest on the debt.

That's nearly half the total annual budget for the US military.

Meanwhile, economists are closely watching some proposed legislation that increases the minimum wage. 

Speaker Pelosi and other Democrats in the House announced they will soon approve an increase in the US minimum wage from $7.25 an hour to $15 dollars per hour – that would be a doubling of the rate within the next six years.

Pelosi said, "The Raise the Wage Act gives up to 33 million Americans a long-overdue raise – 33 million Americans – and lifts so many people out of poverty. This bill honors the dignity of work, grows the economy and upholds the bedrock idea of fairness in our country. That hard work deserves a decent wage."

Republican opponents of the minimum wage increase say it will lead to reduced hours for workers and job losses. 

They say many small businesses can not afford to pay workers more, so they'll end up cutting employee's hours and lay them off.

And some economists say increased labor costs are passed on to consumers, so it would likely lead to higher prices for goods and services.

The minimum wage increase is expected to have a difficult time passing the Senate.

As for the budget, the House and Senate may vote on the Trump-Pelosi deal before the congressional summer recess begins. That starts the end of next week for the House and August 2nd for the Senate. They get a nice, long vacation and won't return to Capitol Hill until the second week of September.
 
 

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