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September 24, 2017

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Mnuchin: Congress needs to tie Harvey aid to debt limit bill

WASHINGTON — Congress needs to combine a $7.9 billion disaster relief package for Harvey with a contentious increase in the nation's borrowing limit, Treasury Secretary Steven Mnuchin says, arguing it is needed to ensure storm victims in Texas get the help they need.

"The president and I believe that it should be tied to the Harvey funding," Mnuchin said Sunday. "If Congress appropriates the money, but I don't have the ability to borrow more money and pay for it, we're not going to be able to get that money to the state. So, we need to put politics aside."

President Donald Trump visited storm-ravaged areas in Texas over the weekend, expressing hope for speedy congressional action on Harvey aid. But some House conservatives are opposed to directly pairing disaster aid with an increase in the debt limit, saying it sends the wrong message on overall government spending. Democrats have also been cool to the approach.

Linking the two issues could make it politically difficult for lawmakers to oppose the debt-limit bill.

Trump plans to meet with congressional leaders from both parties this week as lawmakers return to Washington after their summer recess.

The government's cash reserves are running low because the debt limit has actually already been reached, and the Treasury Department is using various accounting measures to cover expenses. Mnuchin originally had said that Congress would need to raise the $19.9 trillion borrowing limit by Sept. 29 to avoid a catastrophic default on the debt, allowing the government to continue borrowing money to pay bills like Social Security and interest.

But on Sunday, he said that deadline had moved up due to unexpected new spending on Harvey.

"Without raising the debt limit, I'm not comfortable that we would get the money that we need this month to Texas to rebuild," Mnuchin said.

Asked about Trump's past threats to force a government shutdown if Congress does not also include his $1.6 billion request for a wall on the U.S.-Mexico border, Mnuchin said Harvey aid was Trump's "first objective right now."

The Associated Press reported last week that Republican leaders were making plans to pair Harvey aid with an increase in the debt limit. Other senior GOP aides told the AP that no final decision had been made, and Democrats, whose votes would be needed in the Senate, have yet to signal support.

"Providing aid in the wake of Harvey and raising the debt ceiling are both important issues, and Democrats want to work to do both," said Senate Democratic leader Chuck Schumer of New York and House Democratic leader Nancy Pelosi of California in a joint statement Sunday. "Given the interplay between all the issues Congress must tackle in September, Democrats and Republicans must discuss all the issues together and come up with a bipartisan consensus."

In an interview with a Milwaukee TV station that aired Sunday, House Speaker Paul Ryan did not address whether the two issues would be tied together, only expressing confidence that Congress will "step up" to fund disaster recovery efforts in Texas. "This is something that we've never seen before, so it's going to require a pretty unprecedented response," Ryan, R-Wis., said on "UPFRONT with Mike Gousha," which is produced in partnership with Wispolitics.com.

Sen. Roy Blunt of Missouri, a member of the Senate Republican leadership, said he wouldn't be opposed to combining the two measures and said the urgency of Harvey disaster relief provides "another reason as to why you want to keep the government open."

Trump's aid request would add $7.4 billion to dwindling Federal Emergency Management Agency disaster aid coffers and $450 million to finance disaster loans for small businesses. An additional $5 billion to $8 billion for Harvey could be tucked into a catch-all spending bill Congress must pass in the coming weeks to fund the government past Sept. 30.

On Sunday, Texas Gov. Greg Abbott described the federal aid package as an important initial "down payment" on Harvey relief that he expects will come to $150 billion to $180 billion. "We need Congress to step up and pass this and help Texas rebuild," he said.

More than 436,000 households have registered for FEMA aid, according to the White House.

Harvey came ashore Aug. 25 as a Category 4 hurricane, then went back out to sea and lingered for days off the coast as a tropical storm. The storm brought five straight days of rain totaling close to 52 inches (1.3 meters) in one location, the heaviest tropical downpour ever recorded in the continental U.S.

Mnuchin and Abbott appeared on "Fox News Sunday," and Blunt spoke on NBC's "Meet the Press."