(Bloomberg) -- Treasury Secretary Steven Mnuchin said Congress should combine an initial package of relief for victims of Harvey with a boost in the nation's debt limit, saying lawmakers need to “put politics aside” to ensure that those trying to recover from the storm get the help they need.
“The president and I believe that it should be tied to the Harvey funding,” Mnuchin said of the debt-limit increase on “Fox News Sunday.” He said it should be a so-called clean increase in the borrowing authority that doesn't have any other provisions tied to it. “We need to help people in Texas and we need to get that done.”
President Donald Trump visited storm-ravaged Texas Saturday, saying he hopes for a “quick process” to get Congress to approve almost $8 billion in initial Harvey relief. Trump will meet with congressional leaders of both parties this week to discuss the aid package, Mnuchin said.
In a letter to House Speaker Paul Ryan requesting the storm aid, White House Budget Director Mick Mulvaney on Friday stopped short of explicitly asking for the aid to be tied to raising the debt ceiling. But the letter makes clear that the emergency spending will move forward the deadline for raising the limit and conveys the idea that failure to lift it could imperil essential government services at a time when residents in Texas need the help.
The White House disaster aid request includes $7.4 billion for the Federal Emergency Management Agency and $450 million for the Small Business Administration. The request is intended primarily to cover funding demands through the end of the federal fiscal year on Sept. 30.
Read More: Trump Seeks $7.85 Billion for Harvey, Action on Debt Limit
The efforts to link the two measures is intended to avoid a standoff over the issue that could rattle financial markets. Mnuchin has repeatedly said that it's “critical” that Congress raise the debt ceiling by Sept. 29.
The House of Representatives plans to vote this week on Trump's request in initial disaster relief funding but Republican leaders don't plan to include a U.S. debt-limit increase in that legislation, two GOP congressional aides said before Mulvaney's letter was sent.
The Senate could attach the increase in U.S. borrowing authority to the hurricane relief package when it considers the legislation, and then send it back to the House. Neither Senate Majority Leader Mitch McConnell nor Ryan have indicated whether they would be supportive of that approach.
“Working closely with the President and the House of Representatives, the Senate stands ready to act quickly to provide this much-needed assistance to those impacted communities, and support first responders and volunteers,” McConnell said in a statement late Friday.
Democratic leaders, meanwhile, were noncommittal after Mnuchin's remarks. In a joint statement, House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer said raising the debt limit is a priority for their party but that there must be bipartisan agreement about whether it should be attached to another legislative vehicle or move on its own.
“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,” Pelosi and Schumer said in the statement.
The debate over the package will kick-start Congress's work this fall, as lawmakers also seek to extend the government's spending authority past the Sept. 30 fiscal year and prevent a government shut down.
Read More: Trump's Tax-Cut Bid Hits Obstacle: Hurricane Harvey's Costs
Trump has threatened to shut down the government if Congress does not include his request for $1.6 billion for a wall on the U.S.-Mexico border in a spending bill. Asked about that threat Sunday, Mnuchin said the president's top priority was the Harvey aid. The White House late last week assured GOP leaders that Trump won't pick that fight right now, said two people familiar with the conversations.
The administration and Republican leaders in Congress also continue to craft an overhaul of the tax code, which Mnuchin insisted can be completed before year's end.
“The objective is to get this passed and get it to the president this year,” Mnuchin said of the tax plan. He reiterated the administration's position that the loss of federal revenues due to cuts in individual and corporate taxes can be offset by increased economic growth. McConnell has insisted that any package be “deficit neutral,” and he has not said higher growth projections could meet his test.
But the costs of Harvey could undercut the political support from some Republicans in Congress for a tax overhaul that would increase the budget deficit.
More than 311,000 Texans had already applied for federal disaster relief funds as of Thursday morning and more than $530 million already has been granted, Vice President Mike Pence said. About 100,000 homes were damaged by the storm, White House Homeland Security Adviser Tom Bossert said.
Texas Governor Greg Abbott said on CNN's “State of the Union” that $120 billion was needed to respond to Hurricane Katrina and that he expects the damage from Harvey will require more funding.
--With assistance from Margaret Talev Erik Wasson Jennifer Epstein Justin Sink and Toluse Olorunnipa
To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net, Mark Niquette in Columbus at mniquette@bloomberg.net.
To contact the editors responsible for this story: Joshua Gallu at jgallu@bloomberg.net, Mark Drajem, Mark Niquette
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