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Harvey victim funds may be delayed without debt limit increase: Mnuchin

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin on Sunday put pressure on Congress to increase the government’s debt limit by arguing that relief funding for hurricane-ravaged areas of Texas might be delayed if lawmakers do not act quickly.

U.S. Treasury Secretary Steve Mnuchin speaks during a news briefing at the White House in Washington, U.S., to announce sanctions against Venezuela, August 25, 2017. REUTERS/Yuri Gripas

“Without raising the debt limit, I am not comfortable that we will get money to Texas this month to rebuild,” Mnuchin said on Fox News Sunday. U.S. President Donald Trump has requested nearly $8 billion for initial relief for areas hit by Hurricane Harvey.

The United States is on track to hit its mandated debt limit by the end of the month unless Congress moves to increase it.

Senator Roy Blunt, a junior member of the Senate’s Republican leadership, said it was possible lawmakers could tie legislation raising the U.S. debt ceiling - an unpopular step among some Republican conservatives - to legislation providing financial aid for recovery from Harvey.

“That’s one way to do it,” Blunt said on NBC’s “Meet the Press.” Congressional leaders would have to look at whether the votes are there, he said.

Congress returns this week from a month-long vacation, and one of the first measures it is expected to consider is the $7.85 billion Trump has requested so far for Harvey aid.

Texas Governor Greg Abbott on Sunday estimated damage from Hurricane Harvey at $150 billion to $180 billion, calling it more costly than epic storms Katrina or Sandy and fueling the debate over how to pay for the disaster.

The U.S. government has a statutory limit on how much money it can borrow to cover the budget deficit that results from Washington spending more than it collects in taxes. Only Congress can raise that limit, and financial firms have been worried that Congress may fail to reach a deal to do so. Some conservatives want to link spending reforms to a debt ceiling hike.

Democrats said there should be bipartisan talks on how to handle the debt ceiling and government spending bills.

“Providing aid in the wake of Harvey and raising the debt ceiling are both important issues, and Democrats want to work to do both. Given the interplay between all the issues Congress must tackle in September, Democrats and Republicans must discuss all the issues together and come up with a bipartisan consensus,” House Democratic Leader Nancy Pelosi and Senate Democratic Leader Chuck Schumer said in a joint statement.

Blunt, on NBC, said Hurricane Harvey has created “another reason as to why you’d want to keep the government open” by passing legislation to fund the government this month.

Reporting by Joel Schectman and Susan Cornwell; Editing by Phil Berlowitz and Mary Milliken