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Trump will 'demand' increase in military budget as part of spending deal: Mnuchin

Key Points
  • Treasury Secretary Steven Mnuchin says President Trump is determined to follow through on his campaign promise to help the armed services and veterans.
  • Trump promised during the campaign that he would amp up spending to modernize the military and increase benefits for veterans.
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Treasury Secretary Steven Mnuchin: Our hope is to reach bipartisan deal on taxes

As President Donald Trump works through the end of the year on a budget deal with Congress, a military spending increase appears to be a critical part of the negotiations.

Treasury Secretary Steven Mnuchin said Tuesday the president is determined to follow through on his campaign promise to help the armed services and veterans.

Mnuchin framed the issue in terms of the ongoing bartering between the administration and congressional leadership, which most recently produced a deal that raises the debt ceiling and keeps the government operating into December.

"We could have done a one-year deal on the debt ceiling," Mnuchin said at the "Delivering Alpha" conference presented by CNBC and Institutional Investor. Mnuchin said the one-year provision was not widely reported but is an important piece in the saga over the budget negotiations.

"Had we done that, it would have been linked to one year of additional funding for the government. But the president wants to raise military spending," he said. "The president wants to increase military spending, and that's something he's going to demand for December."

Trump promised during the campaign that he would amp up spending to modernize the military and increase benefits for veterans.

Mnuchin said the White House is looking for a longer-term budget deal but is at the point where it will take the best deal it can get, with the goal of avoiding a shutdown.

"Congress has every right to control spending," he said. "If ultimately the government shuts down, which would not be a good thing, that's their right if they can't agree on a debt ceiling."

Mnuchin spoke as the national debt crossed $20 trillion for the first time and has increased about 1.1 percent during Trump's time in office.