Pelosi, Mnuchin in debt-cap dance

They keep issue on front burner over weekend, sources say

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin kept the lines of communication open Saturday in a bid to reach a deal on the U.S. debt ceiling, and plan to do so again this morning.

The pair spoke for some 15 minutes around 4:10 p.m. Washington time Saturday, after talking earlier in the day and on Friday afternoon, according to a Pelosi aide. No further details were provided.

Pelosi has sought to pair a deal on government spending levels with an agreement to raise the debt ceiling. President Donald Trump on Friday said he thinks negotiations to lift U.S. borrowing authority are in "good shape," despite Pelosi having rejected a White House demand for $150 billion in spending cuts.

Trump called the debt ceiling a "sacred element" and told reporters at the White House: "I can't imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge. I would have to assume we're in great shape."

The extended talks mean Congress and the White House will push up against Pelosi's deadline to reach a deal before the House leaves town for its August recess.

The Trump administration late Thursday gave Democrats a list of $574 billion in savings options from which to find $150 billion to offset Pelosi's proposed spending increases over the next two years.

A Democratic official who asked not to be identified discussing the private talks described the White House demand as a starting point.

An administration official said Friday morning that talks would likely continue at the staff level over the weekend and into this week.

Roughly half of the administration proposals are straight spending cuts, while the rest would result from overhauling various government programs, two people familiar with the proposal said. One proposal is a drug pricing plan from Trump's fiscal 2020 budget, which the White House says would save $115 billion, one of the people said. Much of the plan is opposed by the pharmaceutical industry.

There are no revenue or tax increases on the White House list.

The suggestions also include a proposal to extend budget caps for two extra years after they expire in 2021 in order to save another $516 billion. Under current law, $126 billion in automatic cuts would take effect by the end of the calendar year if the caps aren't raised.

Pelosi and Mnuchin said Thursday that they were close to an agreement, continuing their conversations even as Mnuchin was in France for a meeting of Group of Seven finance chiefs. Congressional leaders have been pushing the White House to agree to spending levels for next year, which would allow a budget caps bill to move with the debt limit fix.

Pelosi on Thursday said she wanted to file a bill last week to set up House votes this week on the package.

"Nothing is agreed to until everything is agreed to, but we are on our way," the California Democrat told reporters at the U.S. Capitol. "We have a path."

The Treasury Department has been using so-called extraordinary measures to meet debt obligations since March 2, when the U.S. reached its $22 trillion limit on borrowing.

Mnuchin has said that under one of the Treasury Department's most conservative estimates, the U.S. will be at risk of defaulting on payment obligations in early September -- before lawmakers are scheduled to return from their summer recess on Sept. 9.

A Section on 07/21/2019

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