Trump administration wants to tie Harvey relief money to debt ceiling

Posted September 04, 2017

"With Harvey, it's moved the situation up earlier, and 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, adding that it is a priority.

During an interview on "Fox News Sunday", Mnuchin was asked whether he can guarantee that disaster aid for Harvey would not be tied to a bill to raise the debt limit. We need to make sure that we can get to Texas the appropriate amount of money to rebuild the state.

Trump has called on Congress to approve nearly $8 billion for initial aid to Harvey victims although that's only the first in what is expected to be lots more money in aid in the near future.

Senate leader Roy Blunt, R-Mo., said Sunday on NBC's Meet the Press that Harvey aid and the debt ceiling increase is "something that will be decided in the next few days, I expect".

Mnuchin's assertion directly contradicts White House homeland security adviser Tom Bossert, as well as Congressional Republicans, who do not want to the two issues together.

Bitter divisions among Republican Party lawmakers and President Donald Trump's unpredictability could rule out a deal to raise the U.S. debt limit before an October deadline, several lobbyists representing dozens of bankers, investors and credit rating agencies, told Reuters.

Goldman Sachs, an American financial services company, estimated that failure to raise the ceiling would force a government spending cut equal to between 3 and 4 percent of U.S. gross domestic product, which would have crippling economic consequences. And I think as you know, that's our priority.

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Meadows and other members of the House Freedom Caucus have vocally voiced their opposition to tying Harvey aid and the debt ceiling because it sends the "wrong message", the Washington Post reported.

WALLACE: And again, just to pin this down, if the debt limit isn't raised, will that interfere with the relief effort?

House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer issued a joint statement urging bipartisanship on both issues Sunday afternoon, but did not commit to anything outright.

Mnuchin's spending-debt ceiling pitch resulted in a quick and favorable response from Congress's top two Democratic leaders.

"This is where we come to the part where Congress plays a role".

Mnuchin said that people need to cut off North Korea economically and did not rule out the possibility of implementing stronger regulations on Chinese companies and financial institutions doing business with the North.

President Trump tweeted Sunday that the United States was considering halting trade deals with any country that does business with North Korea. "The economic impact associated with debt default is so vast", said Rob Nichols, president and CEO of the American Bankers Association (ABA), one of the country's key financial lobby groups. We will work with China.