Donald Trump asks for $7.9 bn down payment for Harvey relief

President Donald Trump has sent lawmakers an initial request for a $7.9 billion down payment toward Harvey relief and recovery efforts.

The request, expected to be swiftly approved by Congress, would add $7.4 billion to rapidly dwindling Federal Emergency Management Agency disaster aid coffers and $450 million to finance disaster loans for small businesses.

Republican leaders are already making plans to use the aid package, certain to be overwhelmingly popular, to win speedy approval of a contentious increase in the federal borrowing limit.

A senior House Republican, who spoke on condition of anonymity because the deliberations were private, disclosed the approach. It ignores objections from House conservatives who are insisting that disaster money for Harvey should not be paired with the debt limit increase. Other senior GOP aides cautioned that no final decision had been made, and Democrats, whose votes would be needed in the Senate, have not signed off on the approach.

 

For GOP lawmakers who support a straightforward increase in the debt limit, pairing it with Harvey money makes the unpopular vote easier to cast. Congress must act by September 29 to increase the United States' $19.9 trillion debt limit, in order to permit the government to continue borrowing money to pay bills like Social Security and interest. Failing to raise the debt limit would risk a market-shattering first- ever US default.

"Look, some members are going to vote against the debt ceiling under any circumstances and they want their 'no' vote to be as easy as possible," said Pennsylvania Representative Charlie Dent. "The issue is not making the debt ceiling vote easier for the 'no' votes. The issue is making it easier for the 'yes' votes."

The government's cash reserves are running low since the nation's debt limit has actually already been reached, and the Treasury Department is using various accounting measures to cover expenses. Billions of dollars in Harvey aid are an unexpected cost that at least raises the potential that Congress would have to act earlier than expected to increase the government's borrowing authority.

The House is likely to pass the Harvey aid as a stand- alone bill, but GOP leaders are signalling that the Senate may add the debt increase to it. Then the House would swiftly vote again to send it to Trump. The plan is still tentative, but the White House signalled it's on board with the idea.

White House budget director Mick Mulvaney urged lawmakers in a letter outlining the aid request to "act expeditiously to ensure that the debt ceiling does not affect these critical response and recovery efforts."

Meanwhile, despite threats from Trump that he would shut down the government if his US-Mexico border wall is not paid for, lawmakers and aides say the White House has eased off that threat and any fight over the border wall will be delayed until later in the year.

"I just don't think a shutdown is in anyone's interest or needed for anyone's interests," House Speaker Paul Ryan, Representative from Wisconsin, said in an interview today with the Milwaukee Journal Sentinel.

The initial package of Harvey aid would replenish Federal Emergency Management Agency disaster funds through September 30.

The initial Harvey package is just the first instalment for immediate disaster response like housing assistance, cleanup and FEMA-financed home repairs. The White House says more than 436,000 households have registered for FEMA aid.

Estimates for longer-term rebuilding costs will take weeks or month to prepare, but the magnitude of the disaster could rival or exceed the damage from Hurricane Katrina in 2005, which cost taxpayers $110 billion.

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 September 30, according to the senior House Republican. The final rebuilding package would be far larger and is likely by year's end.