Hurricane Irene set to bleed FEMA, inflame budget scrap in Congress

Shortly after Hurricane Irene blows through Washington, Congress will blow back into town and start fighting about how to pay for the storm and all the other natural disasters that have struck the United States this year.

If the hurricane is truly historic, as President Obama has warned, an emergency disaster appropriations bill would be necessary in September to get the government through to the beginning of fiscal 2012 on Oct. 1, aides said.

ADVERTISEMENT
The problem with this is that Democrats and Republicans disagree on whether emergency appropriations need to be offset by spending cuts.

Even if the government can make it to Oct. 1 without a special disaster bill, the offset fight could linger as vastly different House and Senate 2012 Homeland Security spending bills are hashed out.

If Irene and other disasters are not offset in the 2012 bill, the cost would end up wiping out the amount of budget savings the GOP was able to get in the debt-ceiling deal. This is because of a little-known provision in the that deal that allows new spending caps to be raised.

House Majority Leader Eric Cantor (R-Va.) signaled his position this week when he said that any earthquake assistance to his district in Virginia would have to be paid for through cuts elsewhere.

Democrats say this kind of offsetting will do further damage to the economic recovery.

“Telling an area hard hit by the economy that it will have to sacrifice to pay for earthquake assistance to Cantor’s district simply won’t fly,” one aide said. Aides said they want emergencies like Irene treated “off budget.”

There are several possible scenarios, depending on the severity of Irene, or any further disaster in the weeks ahead. 

The size of Irene matters because the Federal Emergency Management Agency disaster relief fund has dipped below a key threshold.

It is now at $792 million, congressional sources said Friday. Normally when the fund dips below $1 billion, FEMA announces it can only meet the most immediate needs, such as clearing debris.

On Saturday, FEMA announced that because the fund had reached $792 million, it had in fact reached immediate-needs status.

The announcement prompted House GOP appropriators to blast the administration for allowing the FEMA funding standoff to continue to this point.

Hurricane Katrina ultimately cost FEMA some $40 billion, and a Category-3 storm hitting heavily populated New York City could have similar costs.

The National Weather Service listed Irene as a Category-1 hurricane when it made landfall Saturday in North Carolina.

If Irene is not that bad, appropriators anticipate that the agency can survive until Oct. 1 without an emergency appropriations bill.

Given that the Senate will be unlikely to move a full Homeland Security appropriations bill, which funds FEMA, by the end of September, FEMA could see a continuing resolution at last year’s $2.65 billion level while appropriators work toward completion of the bill.

If Irene does a medium amount of damage, extra emergency funds could be wrapped into the continuing resolution.

No matter what, FEMA will need much greater 2012 funding than was anticipated in January when Obama requested $1.8 billion in disaster funding.

Before Hurricane Irene and the Virginia earthquake, 2011 saw historic flooding in the Mississippi River Valley and in North Dakota, and massive tornados in the Midwest and South.

FEMA told Congress this summer it could need up to $4 billion more in funding, for a total of $6.8 billion in 2012.

House Republicans provided $3.65 billion in total funding, setting up a confrontation with the Senate. The House added $1 billion to the 2011 level of funding by cutting back grants for clean-energy vehicles to find an offset, over the protestations of Democrats.

A Republican aide said, in light of Irene, even more disaster funding could be needed — but that should be addressed in a conference committee with a Senate bill. The House has no plans to revise its bill and would bring it into the negotiation with the Senate.

Complicating matters is the debt-ceiling deal signed into law on Aug. 2.

The deal attempted to address the high number of disasters through a special provision added at the last minute.

The provision backed by Senate Majority Leader Harry Reid (D-Nev.) allows the discretionary cap in the bill to be raised for disasters.

Under the new law, the Office of Management and Budget must by Sept. 1 tell appropriators the amount by which the administration wishes to raise the $1.043 trillion spending ceiling.

The maximum OMB can request is an average of annual disaster funding over the last 10 years, minus the highest and lowest years over that period.

One Democratic aide expected the OMB request could be as high as $10 billion extra, and the aide expected controversy.

If the number is that high, it would erase the $7 billion in real budget cuts for 2012 that were nailed down in the debt-ceiling deal.

Conservatives were already unhappy with that amount, and with the fact that most of the spending cuts in the debt-ceiling deal are almost a decade away. It is unclear if they would seek to require additional disaster funding in the 2012 bill to be offset.

An aide to Sen. Mary Landrieu (D-La.), chairwoman of the Senate Appropriations subcommittee on Homeland Security, said the subcommittee expects to mark up its bill the first full week of September and to provide more disaster funding than in the House bill.

Landrieu has a host of problems with the bill that passed the House in May.

That bill slashed $1.1 billion from the overall bill level, and Democrats will seek to restore funding, including cuts to the Coast Guard.

Landrieu in a July 11 letter outlined her objections, including the fact that the House bill cut state grants used to prepare for disasters.

“Does it really make sense to pay response and reconstruction costs for past disasters by reducing our capacity to prepare for or respond to future disasters?” the senator wrote.

On the House side, Rep. Robert Aderholt, chairman of the Appropriations subcommittee on Homeland Security, has been urging his Senate counterpart Landrieu to move her bill for months to avoid the last-minute decision-making facing Congress next month, an aide said.

This story was updated at 1:10 p.m.