Trump Weighs Tying Debt Limit Increase to Harvey Aid
Source: Bloomberg
By Margaret Talev
August 31, 2017, 7:09 PM EDT updated at September 1, 2017, 7:12 AM EDT
* Approach intended to spur quick action to avoid U.S. default
* Request for $5.95 billion aid package may come Friday
President Donald Trump is considering attaching an increase in the U.S. debt limit to an initial $5.95 billion disaster aid funding request for Hurricane Harvey, two administration officials said, a move aimed at lowering the risk of an unprecedented default.
The White House request, which could come as soon as Friday, would include $5.5 billion to the Federal Emergency Management Agency and the remainder to the Small Business Administration. The request is being prepared primarily to cover funding demands through the Sept. 30 end of the federal fiscal year, according to the officials, who described the matter on condition of anonymity.
Administration officials already have begun talks with congressional leaders about the approach, which is intended to ease early passage of a debt limit increase and avoid a stand-off over the issue that could rattle financial markets, one of the officials said.
Market angst is growing as Congress has only a limited number of working days remaining to raise the debt ceiling. The spread between one- and three-month Treasury bills has shrunk to around 8 basis points from as high as 24 basis points in May as investors have started demanding higher rates on one-month paper relative to three-month securities in order to compensate for default risk.
Read more: https://www.bloomberg.com/news/articles/2017-08-31/trump-is-said-to-weigh-tying-debt-limit-increase-to-harvey-aid
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