By Andrew Duehren 

WASHINGTON -- House Speaker Nancy Pelosi set a Friday deadline for Congress and the Trump administration to reach an agreement on raising the U.S. government's borrowing limit and setting new overall spending limits.

Mrs. Pelosi, who has been regularly speaking with Treasury Secretary Steven Mnuchin, said she wanted to vote on any potential agreement next Thursday, a day before the House goes on recess. To achieve that, any agreement would need to be completed by this Friday to give the chamber enough time to move the deal through the legislative process.

"We would like to have something on the floor next Thursday so that we can send it in a timely fashion to the Senate so they can go through their, shall we say, particularly senatorial process to get it done in time," Mrs. Pelosi said Wednesday.

While the House goes on recess July 26, the Senate doesn't takes it break until Aug. 2.

Mr. Mnuchin spoke with Mrs. Pelosi and Senate Minority Leader Chuck Schumer (D., N.Y.) for 30 minutes Wednesday morning, according to an aide for Mr. Schumer. Mrs. Pelosi is seeking $22 billion over two years for an overhaul of the health-care program at the Department of Veteran's Affairs. She wants funding for the veterans program to be in addition to equal increases in military and non-military funding.

"We don't want the veteran's resources to be competing with each other or competing with other very valuable domestic priorities," she said.

Democrats have resisted the prospect of suspending the debt ceiling on a short-term basis, and members of both parties have maintained that they want to pair a vote on a debt-ceiling increase with a broader agreement on spending levels.

Mr. Mnuchin wrote a letter to lawmakers last week cautioning that the U.S. could hit the debt ceiling in early September -- before lawmakers return from recess -- raising pressure on lawmakers to suspend or raise the federal debt ceiling sooner than they had expected.

If the government can't borrow more money, the U.S. could be unable to meet all of its obligations, including salaries, benefits and potentially interest payments on federal debt. Such a default could have severe financial and economic consequences, policy makers have warned.

Write to Andrew Duehren at andrew.duehren@wsj.com

(END) Dow Jones Newswires

July 17, 2019 14:30 ET (18:30 GMT)