Threat of budget disaster rises amid discord in both parties

Washington is deadlocked ahead of a series of fiscal deadlines, time is growing scarce and it's only going to get harder to avoid a debacle.

Congressional leaders and the Trump administration have so far tried in vain to reach a deal that would avoid stiff budget cuts, a government shutdown and debt default in September. And now ugly splits in both parties are threatening to complicate the talks.

President Donald Trump has always been a mercurial partner for GOP leaders, and Senate Republicans are less than thrilled Trump has deputized conservative hard-liners to negotiate. An initial proposal from some administration officials to freeze federal funding for a year has already drawn blowback from GOP senators eager to boost defense spending amid tensions with Iran.

Meanwhile, Democratic divisions are spiking, with liberal House Democrats furious with their centrist colleagues and Senate Democrats for embracing a border spending package negotiated with Senate Republicans.

Democrats' biggest strength in the Trump era has been their solidarity, with the party showing impressive unity during the 35-day shutdown to deny Trump his border wall money. Whether Democrats can repeat that feat is now in doubt — a relief to Republicans who have spent much of Trump's presidency cleaved themselves.

"For the most part, we'll keep Republicans on board," said Sen. Thom Tillis (R-N.C.) in an interview. "But I think the real problem is the divisions in the Democratic conference right now."

Senate Minority Leader Chuck Schumer (D-N.Y.) countered that Democratic and Republican congressional leaders "could come up with a good budget agreement as long as President Trump stays out of the way. But he and Mr. [Mick] Mulvaney repeatedly mess things up with their ideological demands."

Treasury Secretary Steven Mnuchin has told congressional leaders that the debt ceiling may need to be raised by mid-September, according to a source with direct knowledge; that would potentially decouple the debt limit from funding the government, which has a Sept. 30 deadline. Add in a long August recess, and the Senate is scheduled to be in session seven weeks and the House just six before the end of September.

At the moment, there's no meeting on the books for this month between the top congressional leaders and the Trump administration. And partisan tensions are likely only to crank up with special counsel Robert Mueller's testimony in mid-July. It adds up to a dicey situation for those eager to avoid economic and political disaster.

Some lawmakers say the crisis will need to build in order to force action.

"I've been through this dance previously," said Rep. Mark Pocan, co-chair of the Congressional Progressive Caucus. "I don't even think we're at the point even yet [to reach a deal]. It's not going to be a July conversation."

The Trump administration has taken a fallback position of one year of funding at current levels to avoid a shutdown and the blunt budget cuts of a sequester that would slash defense spending by $71 billion and domestic spending by $55 billion.

But Senate Majority Leader Mitch McConnell (R-Ky.) says that's "almost as bad as the sequester" since it wouldn't allow military spending decisions to be updated. He's resisted moving forward with Senate spending bills until there's a bipartisan deal with House Democrats and the president.

"I've been disappointed that we have not been able to reach an agreement," McConnell said last week at a news conference. "The two key players in a caps deal are a speaker and the president. If they can agree how much we can spend, then we're not spinning our wheels."

Tillis joined 14 other GOP senators in a letter to the Trump administration budget negotiators this week arguing against a continuing resolution, saying it "must be avoided." The North Carolina senator added in an interview that Congress should consider canceling some of the August recess if the House and Senate can't come to terms on a two-year budget deal that raises the spending caps.

Whether House Democrats will be looking to spend more time together is an open question after their caucus was nearly ripped apart over the aid package to address the surge of migrants at the border. Progressives, including Pocan, lashed out at moderate Democrats who pressured Speaker Nancy Pelosi to pass the bipartisan Senate bill, which didn't have some of the protections for migrant children that liberals were demanding.

Pocan went so far as to publicly declare some moderates had placed themselves in the "child abuse caucus," prompting two Democratic freshmen to confront him in a heated conversation on the House floor.

Liberal members left the Capitol for the holiday recess vowing they would not be pushed aside during fall spending negotiations and would fight even harder for migrant protections and stricter controls on how the Trump administration can spend money at the border.

Many Democrats have grown only more incensed in the days that followed as additional details trickled out about a private Facebook group in which thousands of current and former border agents mocked migrants — including a father and young daughter who died trying to cross the Rio Grande — and made several sexually explicit comments about Democratic members of Congress.

A devastating inspector general report further detailed how migrants were being forced to live in squalor and unsafe conditions, including adults stuffed in "standing room" only cells for a week and children who weren't allowed access to showers or hot meals for days.

"This administration is pouring gasoline on this whole border fire on purpose for their own political goals, which is absolutely sick," said Rep. Marc Veasey (D-Texas), who toured border facilities with several other House Democrats earlier this week.

Since then, some of the more outspoken progressives, including Rep. Alexandria Ocasio-Cortez (D-N.Y.) have repeatedly chided their colleagues on Twitter for handing over billions of dollars to the Trump administration without additional safeguards. She said it "didn't fix the problem, just funded abuse."

The simmering dispute sets up a potential powder keg for Pelosi — who must placate the progressives in her caucus or risk a rebellion while she negotiates a deal that is also palatable to moderate Democrats and Republicans.

McConnell has successfully impressed upon the president the importance of a two-year budget deal and raising the debt ceiling. The Kentucky Republican helped organize two earlier budget meetings with Pelosi, Schumer and House Minority Leader Kevin McCarthy as well as administration officials.

But those sessions produced little, with the parties stalemating over domestic spending and administration officials then proposing to essentially give up and freeze spending levels to avoid a shutdown.

"Democrats killed negotiations because they refused to move a single dollar off their $2 trillion spending hike," said a senior administration official, referring to House Democrats' preferred spending plans. "After the House infighting fiasco over the border supplemental, it's unclear if Pelosi could even get a compromise through her caucus. No one wants a long term CR, but if the alternative is a progressive caucus forcing a shutdown, it's hard to imagine a different outcome."

Sarah Ferris contributed to this report.