House Speaker Nancy Pelosi indicated she and Treasury Secretary Steven Mnuchin were close to a budget deal Tuesday. | J. Scott Applewhite/AP Photo budget Pelosi sees 'clear understanding' with Mnuchin on budget deal

House Speaker Nancy Pelosi suggested tonight that she and Treasury Secretary Steven Mnuchin may be within striking distance of a two-year agreement to avoid billions in automatic spending cuts and a calamitous default on the nation’s debt.

“We have a clear understanding of what we want to agree to and I think that’s progress,” the California Democrat told reporters after speaking to Mnuchin on the phone. The two plan to talk again on Wednesday after days of ongoing negotiations.


“We’ll have an announcement about something soon one way or another,” she told reporters.

Pelosi said earlier today that she is “hopeful” about reaching an accord before the August recess that raises discretionary spending caps and the debt limit for fiscal years 2020 and 2021.

Democrats have demanded dollar-for-dollar increases in military and non-military spending, in addition to $22 billion over the next two fiscal years for veterans health care. The Trump administration, meanwhile, is seeking offsets for spending increases.

