Senate Minority Leader Chuck Schumer and Majority Leader Mitch McConnell walk to the Senate floor Wednesday. | John Shinkle/POLITICO Congressional leaders reach budget deal The agreement would raise stiff spending caps and help stave off a shutdown.

Congressional leaders on Wednesday clinched a two-year deal to lift strict budget caps on defense and domestic spending, likely putting an end to a series of short-term spending bills and shutdown fights that have defined Washington the past few months.

The deal is expected to increase defense and domestic spending by roughly $300 billion over two years, according to administration and congressional sources, as well as lift the debt ceiling through the election and include tens of billions of dollars in disaster aid.


"This bill is the product of extensive negotiations among congressional leaders and the White House. No one thinks this bill is perfect. But we worked hard to find common ground and stay focused on serving the American people," Senate Majority Leader Mitch McConnell (R-Ky.) said in announcing the agreement.

"The budget deal doesn’t have everything Democrats want. It doesn’t have everything the Republicans want. But it has a great deal of what the American people want," said Senate Minority Leader Chuck Schumer (D-N.Y.). "After months of legislative logjams, this budget deal is a genuine breakthrough."

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The Senate is expected vote on the pact on Thursday, according to Senate Majority Whip John Cornyn (R-Texas). It's likely to pass easily, but House approval will be a tougher lift.

And though President Donald Trump suggested that the government could shut down without action on immigration, a top White House aide signaled that Trump supports the bill.

“I’m not going to say every piece of it. But obviously, we’re excited about the defense numbers," said Marc Short, the White House legislative director.

Trump tweeted in support of the deal a few hours later.

"The Budget Agreement today is so important for our great Military," he wrote. "It ends the dangerous sequester and gives Secretary Mattis what he needs to keep America Great. Republicans and Democrats must support our troops and support this Bill!"

The agreement would increase defense spending this year by $80 billion and domestic spending by $63 billion beyond strict budget caps, according to a summary of the deal obtained by POLITICO. Next year, defense spending would increase by $85 billion and domestic funding by $68 billion beyond the caps. The deal also includes $140 billion for defense and $20 billion for domestic in emergency spending over two years.

A plan to lift the debt limit, which requires action in the coming weeks, and whether to extend expiring tax provisions were among the few outstanding issues that could be attached to the deal, according to aides in both parties familiar with the talks. Sen. Roy Blunt (R-Mo.) said the debt ceiling is likely to be suspended through next March in tandem with the budget deal. Cornyn said nearly $90 billion of disaster aid for wildfires and hurricane damage will also be included.

For such a large package to be passed before funding expires, all 100 senators will need to agree to speedy action on the spending bill and budget package. Any one senator can object to moving forward and derail the leaders’ plan, though McConnell said it is unlikely that the budget deal would fall apart at this late stage.

Sen. Rand Paul (R-Ky.), who opposes the deal, said he hasn't decided whether he would deny a swift vote — and potentially cause a government shutdown.

McConnell briefed the Senate GOP on the contours of the deal at a party lunch Wednesday, and House Speaker Paul Ryan (R-Wis.) also read in his members across the Capitol. Both GOP leaders faced pushback, but allies exuded confidence the budget deal will be on Trump's desk by Thursday evening.

"The House, and Republicans in the Senate and some Democrats in the Senate, are totally committed to increasing defense. And you weren't going to increase defense successfully without a big increase in nondefense," Blunt said.

"I've got mixed feelings," said Sen. John Kennedy (R-La.). “This has been a hard-fought negotiation. I think our leadership really worked hard. It’s obviously not our leadership’s first preference, but we had to work it out with the other side."

Support from GOP defense hawks, especially in the House, will be critical in passing the bill. Senate Armed Services Chairman John McCain (R-Ariz.) — at home in Arizona while being treated for brain cancer — and House Armed Services Chairman Mac Thornberry (R-Texas) came out strongly in support of the package.

"This budget agreement is indispensable for our national security," the two Republicans said in a joint statement. "Without it, our military would not be able to defend our nation, as Secretary of Defense Jim Mattis and our military leaders have repeatedly warned."

However, the negotiations hit a major snag on Wednesday: House Minority Leader Nancy Pelosi (D-Calif.) said she cannot support any budget agreement without a commitment from Ryan to vote on an immigration bill to protect immigrants covered under the Deferred Action for Child Arrivals program.

Still, McConnell and Schumer are bullish about success. The two Senate leaders, along with Ryan and Pelosi, have been engaged in high-level spending talks for weeks.

If all goes according to plan, the Senate will amend a short-term spending bill passed by the House to include the deal to lift strict budget caps and send the package back for the House’s approval before a Thursday night deadline to fund the government. House Democrats moved their annual retreat from Maryland’s Eastern Shore to the U.S. Capitol in anticipation of having to vote on the Senate plan.

Hard-line GOP conservatives in the House Freedom Caucus oppose the deal, which means Ryan will need some votes from Pelosi. But many Republicans are expected to back it.

"There’s substantial support within our caucus. So I don’t think we’ll need that many Democrat votes," said Rep. Hal Rogers (R-Ky.).

Pelosi is facing pressure from some of rank-and-file members — as well as from progressive groups — to reject a budget caps agreement unless Trump and the Republicans agree to a legislative fix for Dreamers. After surveying her caucus, she implored Ryan on the House floor to "Let Congress work its will. What are you afraid of?"

"Without a commitment from Speaker Ryan comparable to the commitment from Leader McConnell, this package does not have my support," Pelosi said. McConnell promised to hold a floor debate on various Dreamers proposals later this month as long as the government remains open.

Ryan has said he would bring up a Dreamers deal if Trump signs off on it.

"We've been very clear about this," Ryan said at a news conference earlier this week. "We will take a bill that the president supports."

Republicans said privately they were not going to overreact to Pelosi's comments, even as she held the House floor for hours demanding action for Dreamers. Pelosi and her aides have been part of the budget caps negotiations from the start, and no deal will occur unless all four party leaders on the Hill support any agreement and work to pass it.

On Tuesday, Schumer said he and Pelosi are aligned strategically on moving forward, potentially defusing another government shutdown.

And many Democrats and Republicans will find relief in a break from budget brinkmanship and in boosting domestic programs and defense spending. The House passed a bill Tuesday funding the government until March 23, which would allow Congress to write a new spending bill for the rest of the year at levels set by the emerging budget deal, potentially avoiding more shutdown fights in an election year.

Though Democrats were unable to secure complete parity in domestic spending alongside the big boost in military dollars, they were quick to note the agreement includes $20 billion for infrastructure, $5.8 billion for child care and $6 billion to fight opioid addiction. The bill also includes a two-year extension of expired Community Health Centers funding and a 10-year extension of Children's Health Insurance Plan funding.

Separately, Schumer and McConnell have been discussing how the Senate will handle a debate on immigration to protect immigrants under DACA from deportation. While House Democrats had been pushing Senate Democrats to clinch a DACA deal in tandem with the budget, there is little hope of a deal on immigration this week.

All McConnell would promise is a wide-ranging floor debate to begin next week.

Jennifer Scholtes contributed to this report.