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December 10, 2012

Administration Issues $60.4 Billion Sandy Relief Request

Posted in: Uncategorized

MTA Escalator under water at South Ferry during Superstorm Sandy

Late on Friday, the Administration made a $60.4 billion supplemental appropriation requestfor dealing with the effects of Hurricane Sandy on the East Coast. The request went directly to House Speaker John Boehner. The total is actually a bit higher than estimated. This is a rough sketch of what the Administration plans to use the funds for:

In total, the Administration requests $60.4 billion in Federal resources for response, recovery and mitigation related to Hurricane Sandy damage in all affected States, This includes efforts to repair damage to homes and public infrastructure and to help affected communities prepare for future storms [...] Our Nation has an obligation to assist those who suffered losses and who lack adequate resources to rebuild their lives. At the same time, we are committed to ensuring Federal resources are used responsibly and that the recovery effort is a shared undertaking: private insurers must fulfill their commitment to the region; public assistance must be targeted for public benefit; resources must be directed to those in greatest need; and impacted States and localities must contribute, as appropriate, to the costs of rebuilding, Accordingly, consistent with the increased emphasis it has placed on the integrity of all Federal spending activities, the Administration proposes that controls be put in place to ensure that funds are used appropriately to protect against waste, fraud, and abuse.

If you want to really dig in, there’s an appendix specifying all the funding requests. About 1/4 of the request, $15 billion, will get routed through the Community Development Block Grant program, flowing directly to state and local governments to assist in recovery and mitigation needs. The states will be expected to contribute a small portion of funding toward these actions.

Importantly, the Budget Control Act, which capped discretionary spending, allows a safety valve for a certain amount of spending considered as disaster relief. The Administration wants $5.4 billion under those auspices, which doesn’t have to be offset by other spending. The other $55 billion, which the White House requests for FY2013, wants this designated as an “emergency requirement.” Basically none of the money would get an offset, under the President’s request.

I appreciate that “building for the future” part of the request, which comes to about $13 billion. It’s not worth it just to rebuild the coastline without putting in place concrete options to mitigate future storms, especially as these have become a more frequent occurrence in recent years. And the letter specifies funding to offset “impacts associated with a warming climate.” Like it or not, we’re in the mitigation stage of climate change right now, and expenditures today will be cheaper than tomorrow.

However, this request drops right in the middle of a gridlocked lame duck session where practically nothing has advanced, as well as in the middle of a debate over deficit reduction which particularly makes no sense in light of this rolling disaster on the East Coast. Residents in Lower Manhattan still don’t have phone or Internet service. Others in the Rockaways are still without power. Businesses remain shuttered. A handful of residences remain uninhabitable. Mortgage companies have not matched their promises on loan relief with actual obligations.

But regardless of Budget Control Act rules, Republicans are likely to ask for offsets for the spending, which would reduce the ability to use those offsets in a deficit deal, as well as make stimulus measures less likely. Though Sandy spending could serve as a type of stimulus through rebuilding, there are many broader-based things that could and should be done. The budget debate’s legacy ensures that will not happen in the near term.

Republican leaders have not specifically responded to this request, but all signs point toward another fight, with the victims on the East Coast bearing the suffering.

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