MuniLand

The politics of recovery money for Sandy

By Cate Long
December 10, 2012

Several days after hurricane Sandy slammed into the tri-state area, President Obama toured the devastated shore with New Jersey Governor Chris Christie and promised to deliver support. Last Friday, six weeks after the storm, the White House sent a $60 billion supplemental budget request to Capitol Hill for recovery funds. The request is likely to get tangled up in ongoing budget and debt-limit wrangling and intra-state politics. New York’s governor Andrew Cuomo is already showing some sharp elbows, as seen in the tweet above from his press conference last Friday with New York’s congressional delegation. Take that Chris Christie.

There seems to be a semi-resigned attitude among the senators from the affected states. Senators Charles Schumer (D-NY), Frank Lautenberg (D-NJ), Bob Menendez (D-NJ) and Kirsten Gillibrand (D-NY) said in a statement:

“This is going to be a tough fight in the Congress given the fiscal cliff, and some members have not been friendly to disaster relief,” they added.

Not too friendly, the senators say? Here is what The Hill is reporting:

[House] Appropriations Chairman Hal Rogers (R-KY) said the needs of the victims have to be balanced with fiscal prudence. “It is also our responsibility during these tight-budget times to make sure that the victims of this storm are getting the most of every single recovery dollar, and to ensure that disaster funds are timed and targeted in the most efficient and appropriate manner,” he said.

This sounds like Rogers intends to take a scalpel to the Sandy funding request. Paging through the request, one sees what looks like sweetheart projects such as the $23 million in cost-share assistance to landowners for tree plantings. Disaster funds are appropriated through various federal agencies. Republicans may want to scrutinize large and small items in the request.

The really big line items, and likely places of partisan challenge, are for items like the $15 billion request for Housing and Urban Development’s Community Development Fund monies. It’s a little fuzzy how and for whom these funds would be allocated. Funding this request would require a change to the law, because HUD does not have permanent authorization for a disaster “program.”  This is another place that could stall passage of the funding.

Politico reported on the broader dynamics of passing the funding request:

At one level, Obama appears genuinely committed to helping the states recover. But he is already in difficult deficit reduction talks with House Republicans. Moreover, of the 18 senators representing the nine states most affected by the Oct. 29 storm, only one, New Hampshire Sen. Kelly Ayotte, is a Republican. And this could make it harder to get the required 60 votes to designate the money as emergency spending, exempt from the 2011 debt accords.

It is clear that the request has already been narrowed in power. Though Governor Christie did not hold a press conference that specifically addressed funding for Sandy relief, he did address his hopes for disaster funding for small businesses at a press conference for two judicial candidates today (my transcript of the presser):

I’m relying on the congressional delegation to get it passed in the form it is currently in by December 21… I argued with the President for the Small Business Administration business program to be a grant program and not a loan program. Jersey shore businesses live season to season and have debt already.  Cuomo and I argued for the block grant program together. I haven’t reviewed the package yet… things are moving fast down there.

Essentially, Christie wants New Jersey small businesses to receive money grants, and this is not the normal protocol for the Small Business Administration. The SBA normally makes loans to businesses that have suffered business losses. The White House request seems to back up Christie by saying that SBA grants should not be given except in special circumstances to restore revenue to small businesses.

I can imagine House Appropriations Chairman Hal Rogers taking out his big read pen and quickly crossing this item off the request. It is hard to see Congress agreeing to give businesses money to cover lost revenue. Republicans will likely argue that is what commercial insurance is for, not the federal government.

New York Mayor Michael Bloomberg has said some non-partisan things about the funding request, but he seems to have stayed out of the game publicly. A big disappointment for many New York and New Jersey homeowners will likely be that the funding request is specifically limited to rebuilding primary residences and not weekend getaways. Taxpayers across America would howl at rebuilding their second homes in Snooki’s “Jersey Shore” community.

The other item that Congressional Republicans will examine closely is the president’s request for the government to fund 90% of repairs versus the customary 75%. Governor Christie was insisting that the federal government repay 100% of the costs.

Congress may not finish the request before they adjourn on December 21. And what Washington allocates may be far less than requested. New York and New Jersey will rebuild, it may just take a longer time to recover.

Further:

Strike Debt: Who pays for Sandy?

Executive Office of the President: Supplemental Request for Hurricane Sandy

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