New Jersey Governor Chris Christie recently berated Congress for its lack of progress on funding recovery monies for Hurricane Sandy. He made the argument that New Jersey and New York are net contributors to the federal treasury and they therefore deserve the funds that they requested. Yet, it is members of Christie’s own party who are slow-walking the legislation that would authorize spending. Republicans have raised some concerns – among them the amount of the original request and the need to budget for it.
The Republicans are right. More study should be performed into how states and communities are reimbursed for hurricane damage. Senator Charles Schumer of New York and others who are pushing for the funding cite the speed and largess of the federal government toward the affected Gulf region after Hurricane Katrina. But a study conducted by the Federal Reserve Bank of New York determined that the economic costs of Katrina were over-compensated to a level of 125%:
In hurricanes prior to Katrina, the [federal government reimbursement] rate was generally between 75 and 90 percent. However, beginning with Katrina, state and local governments often received 100 percent reimbursement. With this expansion of federal disaster assistance, payments from private insurance companies and the federal government exceeded the total economic cost of events since Katrina by about 25 percent.
On December 7, President Obama sent a Sandy funding request for $60 billion to Congress, which was a substantial reduction from the initial $80 billion request made by Governor Christie and New York Governor Andrew Cuomo. Senate Majority leader Harry Reid introduced legislation that mirrored the president’s request. Senate Republicans countered with a $23 billion offer.
I have argued for Congress to more thoroughly vet the appropriation given the federal government’s lack of funds. There is no doubt that the tri-state area needs relief, but the process and rationale for the funds should be much more substantive and transparent. The numbers often seem inflated. For example Louisiana Senator Mary Landrieu, whose own state suffered horribly in Hurricane Katrina, was admonishing the Small Business Administration to amp up its efforts for small firms affected by Sandy (emphasis mine):