McCarthy Defies Trump, Says House Won’t Add Harvey Funds To Debt-Ceiling Bill

Despite President Trump, Treasury Secretary Steven Mnuchin and OMB Director Mick Mulvaney’s urgings, it appears that Congress will not combine funding for the Hurricane Harvey cleanup effort with a measure to raise the debt ceiling, according to House Majority Leader Kevin McCarthy. Congress’s decision will create a major headache for the Trump administration in the coming weeks, as it tries to push through a government-funding bill and a measure to raise the debt ceiling over objections of conservatives who are calling for budget cuts and other concessions.

The House will bring a bill to approve the $8 billion in emergency funding requested by the White House early Wednesday, McCarthy said.

McCarthy, who appeared on Fox Business with Maria Bartiromo, tried his best to sound conciliatory, praising the president for meeting with lawmakers and other members of the “Big Six” group that’s supposedly handling tax reform, while adding that a spending bill and debt ceiling hike would inevitably be approved.

“Wednesday morning we’ll pass relief to make sure FEMA has enough money to get moving right now while the cities and counties get the estimates in so we can go farther in providing more assistance. But you’re going to hit that debt ceiling regardless. They’re afraid what Mnuchin is telling us, if you pass just the supplemental they may not be able to put that money forward without getting the debt ceiling raised. The thing I look for is this is an issue that we’re going to have regardless. This is not an issue you want to run away from, but congress has been successful in capping discretionary spending. Now we have.”

McCarthy said not combining the two measures wouldn’t create problems because they inevitably must be passed. Of course, the House is only in session for 12 days this month while the Senate is also in session, so the clock is ticking…

“We will deal with the debt ceiling regardless if Harvey even arrived in America and now we are asking for more money to provide for FEMA so FEMA does not run out of money,” McCarthy told Maria Bartiromo on Mornings with Maria.

“What Munchin is telling us, if you pass just the supplemental, they may not be able to put the money forward without having the debt ceiling raised.”

“What the Treasury secretary and it’s not just him saying it Mick Mulvaney the OMB director and the president are saying it, we have to deal with the debt ceiling regardless of whether Harvey arrived in America. And now we’re asking for more money to provide for FEMA so FEMA doesn’t run out of money. All they’re looking at are the numbers.”

He also stressed that the president is already making progress on tax reform by meeting with lawmakers, and that he expects a reform bill to reach the president’s desk by the end of the year, the administration’s official self-imposed deadline, which is becoming increasingly important to markets.

“Now we’ve got to move to tax to get the economy growing. We will deal with the wall a little later in the year. We have to finish off eight more appropriation bills. We have the budget to get this month. The budget is the beginning of tax reform. It allows us to go to reconciliation to tackle tax reform. All of that will get done this month.”

“This is a very good sign that they’re meeting with the president now. What we’re doing is learning the lessons from health care. Making sure the White House the House and the Senate are on the same page. That’s why I’m an even stronger believer that tax reform gets out of the house this year. We all know the way to make America stronger is economic growth.”

Voting for aid for Texans is an issue that should transcend political squabbling, McCarthy said.

“To those members who don’t want to tackle the tough issues, the sooner we get it done the sooner we can get to greater growth. Economically, Texas is hurting, think about what Texas’s economy contributes to the US.”

While the controversial border-adjusted tax is out, repatriation – another one of Trump’s top nationalist economic policy objectives – could make it into the final bill.

“Bring it back here and invest it in American or return it to shareholders as dividends.”

When pressed about the priorities for tax reform, McCarthy said it would be a package deal tackling both corporate and individual tax-rate reform.

He also couldn’t resist making a subtle dig at his colleagues in the Freedom Caucus, while urging lawmakers to come together to reach an agreement on Tax Reform.

If a member is out there worried about a tough vote, maybe this isn’t the right job for them. They’ve got to make decisions to move this country forward and that’s what we’re doing. The meeting at the White House is the right thing to do, and a good indication that tax reform is happening. Especially coming off of Harvey.”

McCarthy added that he would be in favor of lower the number of individual tax brackets.

“Why are there seven individual tax rates. Let’s make it three.”

To be sure, we await for a response from the president which, thanks to the influence of Chief of Staff John Kelly, might come in the form of an official statement instead of a tweet. As far as the budget is concerned, Trump still needs a plan for neutralizing intransigent Republicans, because he’s not likely to get any support from Democrats.



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