Funds for Harvey victims may be delayed without debt limit increase: Mnuchin

Treasury Secretary Steven Mnuchin said Sunday that Congress should combine an initial package of relief for victims of Harvey with an increase 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.

Abbott, who is advocating for U.S. government aid for his state's recovery, said the damage would exceed that of Katrina, the storm that devastated New Orleans and surrounding areas in 2005, and Sandy, which overwhelmed NY city and the U.S. Northeast in 2012.

"Fox News Sunday" host Chris Wallace cited the concerns of Rep. Mark Meadows (R., N.C.), a member of the fiscally conservative House Freedom Caucus who does not want disaster aid tied to a bill that raises the debt limit.

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

"We obviously have now the hurricane spending, which is an issue".

Harvey, which came ashore on August 25 as the most powerful hurricane to hit Texas in more than 50 years, has killed an estimated 50 people, displaced more than 1 million and damaged some 200,000 homes in a path of destruction stretching for more than 300 miles (480 km). We need to make sure that we can get to Texas the appropriate amount of money to rebuild the state.

Trump in recent weeks suggested that he'd "close down" the government if the resolution doesn't include money for his campaign-promised U.S. -Mexico border wall. However, Mnuchin on Sunday declined to discuss the issue.

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"The president and I believe that it should be tied to the Harvey funding, that our first priority is to make sure that the state gets money", he said.

Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) said in a joint statement that Democrats will work with Republicans for a deal on the debt ceiling and Harvey money.

American financial firms are expressing alarm over fears that an increasingly dysfunctional US Congress may fail to reach an agreement to raise the country's debt ceiling.

Rates on Treasury bills maturing Oct.5, one of the maturities most vulnerable to a failed debt-ceiling increase, rose last week to 1.21 per cent from 1.12 per cent a week earlier. Congressional leaders would have to look at whether the votes are there, he said.

Congress will also upon its return begin working on Trump's plan to overhaul the federal tax code.

To put it simply, the October maturities have become "hot potatoes" in the $1.7 trillion T-bill market, said Mark Cabana, head of United States short rates strategy at Bank of America Corp. "We're going to fund Harvey relief without a doubt, but I think it just sends the wrong message when you start attaching it to the debt ceiling", he continued. "But we'll be working with them on that".

  • Megan Austin