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Trump announces 'real compromise' on budget deal with congressional leaders

Rand Paul calls out hypocrisy in Washington after Senate rejects his plan to balance the budget

69 senators vote down Republican Sen. Rand Paul's 'Pennies Plan' to balance the budget in 5 years and cut spending by $11 trillion.

The Trump administration and congressional leaders, including Democrats, have reached a critical debt and budget agreement, a deal that amounted to an against-the-odds victory for Washington pragmatists seeking to avoid politically dangerous tumult over fiscal deadlines, President Trump announced Monday.

The deal would increase spending caps by $320 billion relative to the limits prescribed in the 2011 Budget Control Act, whose provisions have repeatedly been waived year after year. It would also suspend the debt ceiling and permit more government borrowing until July 31, 2021 -- after the next presidential election.

The arrangement all but eliminates the risk of another government shut down this fall, but already has been drawing the ire of fiscal conservatives saying it will lead to more irresponsible government spending.

Even some Democrats -- including Vermont Sen. Patrick J. Leahy -- were outraged, saying the bill would not block Trump from spending money on his proposed border wall.

"I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy - on a two-year Budget and Debt Ceiling, with no poison pills," Trump wrote.

He added: "This was a real compromise in order to give another big victory to our Great Military and Vets!"

Democrats celebrated that, under the new deal, the domestic, non-military budget receives larger increases than the defense budget, when compared to last year. Democrats also lauded the deal's allocation of $2.5 billion for the 2020 Census, to ensure that all residents are counted.

The deal, which must still pass Congress, also comes as budget deficits have been rising to $1 trillion levels — requiring the government to borrow a quarter for every dollar the government spends — despite the thriving economy and three rounds of annual Trump budget proposals promising to crack down on the domestic programs that Pelosi, D-Calif., has been defending.

It apparently ignored warnings from fiscal conservatives saying the nation's spending has been unsustainable and eventually will drag down the economy.

"This agreement is a total abdication of fiscal responsibility by Congress and the president," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington advocacy group. "It may end up being the worst budget agreement in our nation's history, proposed at a time when our fiscal conditions are already precarious."

In a statement, Pelosi and Senate Minority Leader Chuck Schumer, D-N.Y., said the compromise deal will "enhance our national security and invest in middle class."

“Democrats are also pleased to have secured robust funding for critical domestic priorities in this agreement," they said. "Democrats have always insisted on parity in increases between defense and non-defense, and we are pleased that our increase in non-defense budget authority exceeds the defense number by $10 billion over the next two years.  It also means Democrats secured an increase of more than $100 billion in funding for domestic priorities since President Trump took office."

This is a developing story. Check back for updates.

The Associated Press contributed to this report.

Gregg Re Fox News

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