Damage assessments are just getting underway in New York and New Jersey, the states hardest hit by Sandy. And much of what could be a humongous tab will be shouldered by taxpayers. The good news is that FEMA’s disaster relief fund is well stocked at the start of a new fiscal year, with $7.8 billion to help the states and individual homeowners and businesses rebuild.
That may sound like a lot of money. But given the magnitude of the devastation, it could end up being pocket change. This is the age of deficits and budget cutbacks; what everyone wants to know is what happens if the cost of Sandy exceeds FEMA’s resources. The answer is there’s good news from an unlikely place: the U.S. Congress.
If the federal government’s portion of the tab exceeds what FEMA has available, there’s another pot of money that Congress can tap without violating any of its self-imposed caps on spending. As part of the Budget Control Act of 2011, passed by Congress after last summer’s debacle over raising the debt ceiling limit, lawmakers quietly changed the way disasters are funded.
It’s rare to find anyone saying something positive about that budget agreement, which spawned the dreaded word “sequestration.” But the White House aides and Senate appropriators who hammered out the dealdeserve a round of applause for planning ahead and recognizing reality. After wild fires in Texas, tornadoes in Joplin, Mo., and Hurricane Irene drained FEMA down to its last $100 million, Republicans balked at spending more money for disaster relief unless it was paid for by cutting other spending, which Democrats refused to do.
The resulting stalemate was broken when Republicans backed off amid the negative publicity. But Democrats didn’t want to go through that again, and so what a Democratic aide refers to as “wiggle room” was created for disaster relief spending in the Budget Control Act. The details are convoluted, but the bottom line is that there is $5.4 billion in addition to FEMA’s $7.8 billion that Congress can tap to 20 assist rebuilding in New York and New Jersey without violating the budget caps Congress put in place.
It would take an act of Congress to free up that money, but President Obama would not be required to make a formal request. It would be up to Capitol Hill; with the money made available under the Budget Act, getting the votes shouldn’t be that heavy a lift. With disaster impact assessments in their early stages, lawmakers representing the hardest-hit region have not made the decision to take that next step. For the moment, FEMA is flush with cash, so any request would be later this year or early next, says a Democratic leadership aide.
He notes that the money if requested would be “spread around” depending on the needs. Some would likely go to FEMA to help homeowners rebuild, some to the Army Corps of Engineers for coastal shore rebuilding, and some to a new emergency fund created under the Budget Act at the Department of Transportation that could be used to repair New York subways.
As those in the storm’s path struggle to recover from Sandy, they can take some comfort in the fact that lawmakers more than a year ago at the height of partisan warfare managed to strike a deal about how to fund disaster relief that looks pretty good today. Democrats crafted the deal, and Republicans agreed to it. What Republicans got out of it was the assurance that disaster money was “on the books” and not off-budget like the ad hoc spending bills favored by the Bush administration to fund the Afghanistan War. “And what we get from it is security, not having to fight,” says the Democratic aide. What people trying to rebuild their lives get is assurance they will not be turned into a political football.