U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-Calif.) reached an agreement on Monday, July 22, for a new two-year budget.

The budget deal, reached after two days of intense negotiations, will increase the national spending cap by $320 billion and place on hold a new national debt ceiling until July 2021.

President Trump announced the deal on Twitter, Monday evening, saying, “I am pleased 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…”

The new budget agreement sets defense and non-defense spending for the next two fiscal years. The budget must now be reviewed and passed by Congress.

Negotiating increases in military spending has been one of Republicans’ priorities. Trump addressed this briefly with follow-up post on Twitter, saying, “This was a real compromise in order to give another big victory to our Great Miitary and Vets!”

New defense budgets are believed to be $738 billion and $740 billion for fiscal years 2020 and 2021, respectively, figures somewhat below those Trump had sought.

Speaking to reporters, President Trump emphasized, “[It’s] very important that we take care of our military. Our military was depleted, and in the last two and a half years, we undepleted it, to put it mildly. We have made it stronger than ever before. We need another big year.”

The budget allows for increasing the national debt, enough to represent something of a compromise on the part of conservatives. President Trump believes he can compensate by implementing more aggressive spending cuts in 2021, after two years of expected economic growth.

Pelosi and Senate Minority Leader Chuck Schumer expressed their support for the new budget deal in a joint statement, saying, “A bipartisan agreement has been reached that will enhance our national security and invest in middle class priorities and well being of the American people.”

“The House will now move swiftly to bring the budget caps and debt ceiling agreement legislation to the floor, so that it can be sent to the president’s desk as soon as possible,” the statement concluded.

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