Democratic Congressional Leaders Offer Support for Harvey Aid, Debt Limit Rise

By Kristina Peterson Features Dow Jones Newswires

Congressional Democratic leaders said Wednesday they were prepared to offer to President Donald Trump and GOP leaders their support for a three-month increase in the federal government's borrowing limit and an initial package of relief for victims of Hurricane Harvey, in what aides described as a bid to maintain their leverage in upcoming negotiations across a range of issues.

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In a joint statement issued Wednesday, House Minority Leader Nancy Pelosi (D., Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y.) said they would back a bill expected to come up for a vote in the House on Wednesday that would provide $7.85 billion in Harvey emergency aid.

Senate GOP leaders indicated Tuesday they plan to attach an increase in the debt limit, a politically difficult vote for many Republicans, to the popular Harvey aid. Already some conservative Republicans have balked at the combination, saying they won't support raising the debt limit without taking other steps to rein in federal spending.

"Given Republican difficulty in finding the votes for their plan, we believe this proposal offers a bipartisan path forward to ensure prompt delivery of Harvey aid as well as avoiding a default, while both sides work together to address government funding, DREAMers, and health care," Mrs. Pelosi and Mr. Schumer said. The two Democratic leaders will propose this plan to Mr. Trump and GOP leaders at a meeting later Wednesday at the White House, according to a Democratic aide.

Senate Majority Leader Mitch McConnell (R., Ky.) said Hurricane Irma, a massive storm threatening Florida over the next several days, in addition to Harvey, increased the pressure for Congress to move swiftly on both emergency relief and raising the debt limit.

"The need for certainty now is incredibly important," Mr. McConnell said on the Senate floor Wednesday, noting that he was in discussions with Democrats.

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The Democratic leaders' offer is a move to maintain the party's leverage in upcoming negotiations over the next three months, aides said. The government's current funding is set to expire by Oct. 1 and lawmakers have said they expect to pass a short-term measure keeping the government running until December. Passage of a short-term debt limit increase would likely align the two fiscal deadlines.

Treasury Secretary Steven Mnuchin has urged lawmakers to raise the debt ceiling by the end of September to ensure that the government has enough cash to pay its bills on time. Failure to increase the debt limit could cause the government to miss payments to bondholders and result in a default on government debt.

Lawmakers are also debating how to address an Obama administration-era program, Deferred Action for Childhood Arrivals, that shields undocumented immigrants who entered the U.S. as children. Mr. Trump on Tuesday said he would end the program after six months and urged lawmakers to pass broad immigration legislation before then.

And many lawmakers on both sides of the aisle hope to take steps to shore up the 2010 Affordable Care Act's individual insurance markets. Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) are holding bipartisan hearings on the issue in the Senate this week.

Write to Kristina Peterson at kristina.peterson@wsj.com

WASHINGTON -- President Donald Trump stunned Republicans on Wednesday when he overrode pleas from GOP congressional leaders and sided with Democrats on a proposal to attach emergency aid for Hurricane Harvey victims to measures to keep the government funded and its borrowing limit suspended until mid-December.

Mr. Trump's decision to strike a deal with Democrats upended the partisan alliances that have long set the boundaries of congressional policy-making, opening up new possibilities for bipartisan deal-making if Democrats can again persuade Mr. Trump to bypass Republican leaders.

For months, Mr. Trump had suggested that he might work with Democrats if Republicans couldn't advance his legislative priorities, but he always pulled back at the last minute. The Republican president's move Wednesday raised questions about whether he will now turn to Democrats to reach deals on tax reform and immigration.

The startling deal Wednesday, reached after a meeting between Mr. Trump and congressional leaders in the Oval Office, was driven by an urge to present a unified government at a time of crisis, as millions of Americans braced for Hurricane Irma's wrath and others struggled to rebuild after Harvey, GOP leaders said.

If approved by Congress, the agreement would defer the threat of a partial government shutdown and a default on the country's debt until Dec. 15 and dispatch the first $7.85 billion installment of Harvey relief, clearing the three most pressing items from the crowded September legislative agenda.

"We had a great meeting," Mr. Trump said during a North Dakota speech Wednesday. "And we walked out, and everybody was happy. Not too happy, because you can never be too happy, but they were happy enough. And it was nice to see that happen for a change."

However, Mr. Trump's decision to align with Democrats over the objections of GOP leaders and a member of his cabinet is likely to inflame tensions between the president and his fellow Republicans. Just hours earlier, House Speaker Paul Ryan (R., Wis.) had called Democrats' proposal to combine Harvey aid and a three-month debt limit increase "ridiculous" and "unworkable."

Former Senate Majority Leader Trent Lott said it was "terrible" for Mr. Trump to undercut his fellow Republicans, particularly when their partisan adversaries were witnesses to it. "The president should not do that," Mr. Lott, a Republican, said. "It is embarrassing to Republican leadership and it shows a split."

During the Oval Office meeting, Mr. Ryan, Senate Majority Mitch McConnell (R., Ky.), House Majority Leader Kevin McCarthy (R., Calif.) and Treasury Secretary Steven Mnuchin all pushed for a longer suspension of the debt limit increase, according to people briefed on the meeting, with Mr. Trump cutting off Mr. Mnuchin at one point.

Republicans initially advocated for an 18-month extension, pushing the next vote on the debt limit until after next year's midterm elections. When Democratic leaders, Sen. Chuck Schumer of New York and Rep. Nancy Pelosi of California, rejected that, the GOP leaders suggested a six-month extension.

With congressional leaders at a standstill, they planned to agree to disagree, according to a person briefed on the meeting. Instead, the president accepted the deal from Democrats and later singled out only those two leaders in announcing the deal. "We had a very good meeting with Nancy Pelosi and Chuck Schumer," he said.

Democrats said Mr. Trump had simply decided they were more persuasive. "To his credit, he went with the better argument," Mr. Schumer told reporters. "Today was a good day in a generally very partisan town."

On Capitol Hill, Republicans publicly muted their frustration over the deal and accepted Mr. Trump's decision, with some dismissing any suggestion that a rift had opened between the president and GOP lawmakers.

"The president can speak for himself, but his feeling was that we needed to come together, to not create a picture of divisiveness at a time of genuine national crisis," Mr. McConnell told reporters.

But privately, Senate Republican aides said the deal registered as a rebuke, following a stormy summer in which Senate Republicans failed to repeal the Affordable Care Act and chastised Mr. Trump for his remarks equating white nationalists with counterprotesters in Charlottesville, Va. Mr. Trump, who later condemned white supremacists, continued the feuding in a series of tweets attacking GOP senators.

Mr. Trump picked a sensitive subject on which to take his stand Wednesday. Republicans have made addressing debt and deficits a cornerstone of their governing philosophy.

Former House Speaker John Boehner (R., Ohio) was vilified by conservatives for his budget and debt limit deals with President Barack Obama, a Democrat, which helped build pressure leading to Mr. Boehner's resignation in September 2015.

The prospect of having to vote again in three months to raise the borrowing limit -- and to do so less than a year before the 2018 elections, and at a time when Democrats will seek to extract concessions on must-pass items like a new spending bill -- represented a major concession, some GOP lawmakers said. "The Pelosi-Schumer-Trump deal is bad," Sen. Ben Sasse (R., Neb.) said in a statement.

"I was very surprised," said Sen. Susan Collins (R., Maine.) "I thought the plan was for a longer-term extension of the debt ceiling."

Although Mr. McConnell said he would vote for the combined package, other GOP senators said Wednesday they weren't sure whether they would support it, even after Vice President Mike Pence and Budget Director Mick Mulvaney explained the deal to Senate Republicans at their weekly closed-door lunch. Mr. Mnuchin fully supported the president's decision once it was made, a senior Treasury official said.

"We very, very poorly deal with our finances and we're heading ourselves into a fiscal crisis," Senate Foreign Relations Committee Chairman Bob Corker (R., Tenn.) told reporters Wednesday.

If the Senate makes changes to the House's Harvey bill to add the debt-ceiling and funding provisions and passes it, the House must then approve the same version before sending it to the White House for Mr. Trump's signature. A Senate vote is expected Friday.

The deal will be a tough sell among House Republicans. House Rules Committee Chairman Pete Sessions (R., Texas) said it was going to take work for the GOP leadership to sell the deal to rank and file.

Mr. Sessions said he strongly preferred a longer time line for the debt limit and said the next vote in December would be harder. "He is new to the negotiation," Mr. Sessions said of the president. "Experience teaches you that it's not this vote that's the hardest. The next one is."

It wasn't clear Wednesday whether the deal would allow Treasury Officials to take "extraordinary measures" to continue paying the government's bills beyond the new Dec. 15 deadline. But a Senate GOP aide said Wednesday evening that the deal wouldn't constrain Treasury officials' ability to manage the debt.

Democrats had said Wednesday that their offer was designed in part to maintain their leverage in other negotiations over issues including health care and Mr. Trump's decision Tuesday to end after six months an Obama-era program that shields undocumented immigrants who entered the U.S. as children.

Mr. Trump's has made no secret of the possibility he would work with the Democrats. In March, frustrated that House Republicans had stumbled in their initial efforts to pass a health care bill, Mr. Trump threatened to work across party lines on health legislation before dropping that idea and resuming attacks on Democrats.

Mr. Trump's staff has also opened the door to working with Democrats on a tax package, and the president later on Wednesday flew to North Dakota with Democratic Sen. Heidi Heitkamp on his plane to pitch for tax reform.

The trip had been seen as part of the president's effort to put pressure on Democrats up for re-election in 2018 from states that Mr. Trump won. But given Mr. Trump's decision to accept the Democratic proposal on the debt ceiling, even that trip began to take on a different significance.

Republicans said they weren't sure what Mr. Trump's moves on Wednesday meant. Asked what the lesson was in the continuing education of Republicans in how Mr. Trump operates, Sen. John Thune (R., S.D.) said, "there is a new chapter in that book written every day."

--Michael C. Bender and Janet Hook contributed to this article.

Write to Kristina Peterson at kristina.peterson@wsj.com, Siobhan Hughes at siobhan.hughes@wsj.com and Louise Radnofsky at louise.radnofsky@wsj.com

(END) Dow Jones Newswires

September 06, 2017 19:54 ET (23:54 GMT)