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Hurricane Harvey

US President Donald Trump asks for US$7.9 billion down payment for Hurricane Harvey relief

For Republican Party lawmakers who support a straightforward increase in the debt limit, pairing it with Harvey money makes the unpopular vote easier to cast

PUBLISHED : Saturday, 02 September, 2017, 10:49am
UPDATED : Saturday, 02 September, 2017, 4:28pm

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

The request, expected to be swiftly approved by Congress, would add US$7.4 billion to rapidly dwindling Federal Emergency Management Agency disaster aid coffers and US$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 Republican Party 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.

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
Congressman Charlie Dent

For Republican Party 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 country’s US$19.9 trillion debt limit, to permit the government to continue borrowing money to pay bills such as 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 Congressman 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 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 Republican Party 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 shutdown the government if his US-Mexico border wall was not paid for, lawmakers and aides said the White House had eased off that threat and any fight over the border wall would 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 said in an interview on Friday with the Milwaukee Journal Sentinel.

The initial package of Harvey aid would replenish Federal Emergency Management Agency (Fema) disaster funds until September 30.

The initial Harvey package is just the first instalment for immediate disaster response such as housing assistance, clean-up and Fema-financed home repairs. The White House said more than 436,000 households had 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 US$110 billion.

An additional US$5 billion to US$8 billion for Harvey could be tucked into a catch-all spending bill Congress must pass in the coming weeks to fund the government after September 30, according to the senior House Republican. The final rebuilding package would be far larger and is likely by year’s end.

Ryan said nothing will stop a Harvey aid bill from getting through Congress and he didn’t foresee any problems with it passing, despite opposition to federal aid from some Republicans following Superstorm Sandy.

“It’s going to take us time until we know the full scope of it,” Ryan said of Harvey’s toll.

He said a storm the size of Harvey is unprecedented, and because of that it “deserves and requires federal response”.

Senate Majority Leader Mitch McConnell concurred, issuing a statement on Friday night promising that the “Senate stands ready to act quickly” on the measure.