White House vows quick action as Harvey aid estimates soar

US President Donald Trump holds the state flag of Texas outside of the Annaville Fire House in Corpus Christi, Texas on Aug 29, 2017.

WASHINGTON (REUTERS) - Estimates of the size of a Hurricane Harvey aid package for Texas and Louisiana rose on Thursday (Aug 31), with one proposal being drafted for US$150 billion (S$203 billion), while the White House promised to make a request for funding soon to Congress.

The Trump administration will make a request to the US Congress shortly for funds to help recovery efforts from Harvey, which caused devastating flooding, White House homeland security adviser Tom Bossert said.

He told reporters that an aid funding request will likely come in stages as more is known about the storm's impact.

Trump has prepared a request to Congress for an initial US$5.9 billion in aid, an administration official said.

US taxpayers are likely to face a bill for Harvey near the US$110.2 billion for 2005's Hurricane Katrina. Estimates on the amount of the Harvey aid varied widely.

Representative Sheila Jackson Lee, a Democrat from Houston, was crafting legislation for US$150 billion in emergency funding through nearly two-dozen government agencies and departments.

Texas Governor Greg Abbott said on Wednesday that the state could need more than US$125 billion.

Figures of US$50 billion to US$80 billion were cited by Republican Representatives Pete Sessions of Texas and Leonard Lance of New Jersey on Fox Business Network.

The Federal Emergency Management Agency's disaster relief fund had only US$3.3 billion when the storm struck.

A Republican leadership source said Congress was expected to consider and vote on an initial allocation of Harvey aid in the first half of September.


The urgency of aiding areas hit by Harvey may also complicate a broader fiscal policy showdown that is coming in late September.

When Harvey plowed into the Texas coast this week, Congress and President Donald Trump were already struggling to deal with the debt ceiling, which is a cap on how much money the federal government can borrow, and the need to approve a temporary federal budget bill by Oct 1 to prevent a government shutdown.

Treasury Secretary Steven Mnuchin told broadcaster CNBC on Thursday that the impact of Hurricane Harvey spending could bring forward the deadline by which the nation's debt ceiling needs to be raised by "a couple of days." He repeated that the limit needs to be raised by Sept 29.

Financial markets have been anxious about the possibility of the debt ceiling not being raised, which could cause a US credit default and send economic shockwaves worldwide.

A Trump administration official and a prominent House of Representatives conservative both said on Thursday that hurricane aid funding should not be tied to the debt limit.

Bossert said the administration wants a "clean" disaster relief supplemental measure, free of unrelated measures, including any effort to raise the federal debt ceiling.

Representative Mark Meadows, the Republican chairman of the conservative House Freedom Caucus, told the Washington Post that attaching Harvey aid to a debt-ceiling increase would be a "terrible idea ... conflating two very different issues."

Meadows told the Post that "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."

That left open the possibility that the aid package could be linked to a broad, short-term budget measure that must pass by Oct 1 to prevent a government shutdown.

The prospect of that linkage was seen as making a government shutdown less likely because of the urgency of getting aid to hurricane-hit areas, and that has been reassuring to financial markets.

Asked if there was still a chance of a shutdown, House tax committee Chairman Kevin Brady told Fox News Channel on Thursday,

"We are going to keep this government open, we are going to pay our debts on time."

Join ST's Telegram channel and get the latest breaking news delivered to you.