Ok, so we all know what the Hurricane Harvey “silver lining” is, right?
If not, you can read all about it here, or you can simply extrapolate from this Sunday soundbite from Mnuchin who spoke to Fox News:
MNUCHIN SAYS HARVEY AID SHOULD BE TIED TO RAISING DEBT LIMIT
— Walter White (@heisenbergrpt) September 3, 2017
Here are the full highlights from Axios:
Treasury Secretary Steven Mnuchin told “Fox News Sunday” that Congress must tie Harvey recovery funding to a clean debt ceiling rise, or else the money intended for Harvey might not arrive.
“Prior to Harvey I’ve said, you know, we have enough funding to go through the end of September… with Harvey its moved the situation up earlier,” he said.
- On whether Trump’s threat to shut down the government over the border wall is out the window: “I can’t really comment on if it’s out the window or not out the window,” but priority now is Harvey.
- On whether tax reform will blow a hole in the national debt: “We want to make sure we can pay for things, but the way we’re going to pay for things is with economic growth.” He said he thinks growth will likely be higher than the models predict.
- So will it be revenue neutral? “What we’ve said is we believe in dynamic scoring.”
In other words: not only has Harvey made it more likely that the debt ceiling will be raised simply by virtue of the bad optics for anyone who opposes a bill with disaster relief attached to it, but also because it makes the funding crunch more acute, rendering the situation even more urgent than it already was.
If you’re not in Texas or if you’re just a cold-hearted, trader cynic who only worries about your P&L, then that’s probably all you care about here, because the sooner the debt ceiling gets raised, the sooner you can cross “technical U.S. default” off your “tail risk” list.
