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The U.S. Senate on Thursday passed and sent to President Donald Trump a two-year budget deal that would increase federal spending on defense and an array of other domestic programs, significantly adding to rapidly escalating government debt. By a vote of 67-28, the Senate ignored late-hour appeals from some conservative Republicans who support bigger military expenditures and tax cuts that constrain revenues but were angered over more spending for non-defense domestic programs. (Cowan, 8/1)

The government's debt has increased significantly since Mr. Trump took office in 2017. When he became president, the national debt was $19 trillion, and it's now reached a high of $22 trillion. In 2016, the president promised he'd eliminate the national debt over an eight-year period. (Segers and Tillett, 8/1)

Trump has embraced the deal, however, because it would uncork the higher military spending he wants — $738 billion in fiscal 2020, just shy of his initial budget request — while freeing up nondefense dollars that could be used for his priorities like border security and veterans health care. Spending cuts, the president says, can come later. “Budget Deal is phenomenal for our Great Military, our Vets, and Jobs, Jobs, Jobs!” Trump tweeted before the vote Thursday. “Two year deal gets us past the Election. Go for it Republicans, there is always plenty of time to CUT!“ Aides say he also has been making calls to on-the-fence GOP senators. (Shutt, 8/1)

Passage of the bill was the Senate’s last act before leaving town for an extended summer recess, on the tails of House members who adjourned last week. Lawmakers will return to the Capitol after Labor Day to confront a thin legislative agenda, including the pending North America trade deal, which faces an uncertain outcome. (Werner, 8/1)

Senate Majority Leader Mitch McConnell (R-Ky.) tried to frame the deal as the best compromise possible in a divided government. And he stressed the importance of avoiding the “chaos” that would come if the government defaulted on its debts. “I am confident it is not exactly the legislation that either side of the aisle would have written if one party held the White House, the House, and had 60 votes in the Senate. That’s divided government,” he said on the Senate floor this week. “But I am equally confident that this is a deal that every one of my colleagues should support.” (Haberkorn, 8/1)

Congress passed a bill that would extend a lifeline to financially struggling injured veterans, enabling them to spend disability payments instead of using them to pay down debt in bankruptcy protection. The Senate on Thursday passed a bill sponsored by Sen. Tammy Baldwin (D., Wis.) that consumer advocates say fixes a mistake written into a 2005 overhaul of the country’s bankruptcy rules. The House passed the bill last week. It now goes to the White House for President Trump’s signature. (Ferek, 8/1)