WASHINGTON -- The Trump administration is injecting new demands into congressional negotiations over a government spending bill that threaten to sink the must-pass package, people familiar with the discussions said.
The disagreement concerns how to classify $12.5 billion in cost increases in veterans' health care, expenses that are part of sweeping veterans' care changes signed into law by President Donald Trump in 2018 with much fanfare.
The impasse could complicate the negotiations over a $1.4 trillion spending bill to fund the government, which if not resolved would lead the federal government to shut down Dec. 11 in the middle of the pandemic -- a dangerous scenario that lawmakers are working to avoid.
Months ago, lawmakers agreed to designate the increased cost of veterans' health care as emergency spending. Such spending isn't subject to certain spending restrictions. But on Friday, administration officials insisted to congressional officials that the $12.5 billion in veterans' care cost increases be considered nonemergency spending, said people who spoke on condition of anonymity to provide details about the private negotiations.
Current budget law allows for only a $5 billion increase on overall nondefense discretionary spending for this year. Some Republican lawmakers believe the veterans' funding should be counted as nonemergency spending, which would prevent further increases in spending elsewhere. Congressional Democrats have insisted that the veterans' funding be excluded from nondiscretionary spending.
Treasury Secretary Steven Mnuchin on Friday demanded cuts to domestic spending as part of the bill.
In 2019, House Speaker Nancy Pelosi, D-Calif., and Mnuchin disagreed over whether to count the veterans' funding against the caps for nondefense spending. The amount of money in dispute represents a tiny fraction of the overall federal deficit, which soared above $3 trillion under Trump because of the government's efforts to fight the coronavirus.
Congressional aides were informed Friday of the administration's new demand, the people said. It was not immediately clear how much Trump himself is directly involved.
"A lot of promises have been made to veterans for improved health care, and without funding to implement those, those promises are hollow," said one of the people familiar with the talks. The people also cautioned that the talks were fluid and subject to change.
A White House spokesman declined a request for comment. The Treasury Department did not immediately comment.
House Republicans will probably back the White House's position, with one congressional aide criticizing lawmakers who want to "hold this vital funding hostage to cater to a desire to increase discretionary spending elsewhere." The aide spoke on condition of anonymity to discuss caucus dynamics.
It was unclear how seriously the rift over the veterans' spending issue complicates negotiations to avert a government shutdown. White House Chief of Staff Mark Meadows said last week that he could not guarantee lawmakers would avert the shutdown.
The VA Mission Act, which received overwhelming support in Congress, is a $55 billion package that greatly expands access to private doctors for veterans at taxpayer cost. It was meant to address significant shortcomings in the Department of Veterans Affairs' health-care system, which were particularly highlighted in a 2014 scandal in which VA employees were found to have fudged patient wait lists.
The U.S. has been operating on stopgap funding since fiscal 2021 began Oct. 1.
Information for this article was contributed by Seung Min Kim and Jeff Stein of The Washington Post; and by Erik Wasson of Bloomberg News.