Disaster aid USA hits new high
WASHINGTON - If 2005 hurricane relief were a separate category in the USA budget, the only larger items would be defense, Social Security, Medicare, and Medicaid. The federal commitment in the aftermath of Katrina, Rita, and Wilma has now hit $88 billion, with at least another $20 billion under consideration in Congress.
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This has become the largest disaster relief effort the government has agreed to - more than the combined amount it spent for 9/11, the Florida hurricanes of 2004, the 1994 Northridge earthquake, and 1992’s hurricane Andrew (in nominal dollars). It is equal to 20 percent of the US Defense budget for this fiscal year, as well as 20 percent of the $400 billion US budget deficit.
„Other than the war in Iraq, no other part of the budget is making the deficit go up as far or as fast”, says Stanley Collander, an independent budget analyst in Washington.The government outlays may sound huge, but that shouldn’t be surprising, say government officials. „The storm was massive in scale. That is why the price tag went so high”, says DJ Nordquist, a spokeswoman for Donald Powell, coordinator of federal efforts for the Gulf Coast. „It affected 90,000 square miles -the size of the United Kingdom- and 1.5 million people.”Last week, a 34 member congressional delegation, led by House Speaker Dennis Hastert (R) and House minority leader Nancy Pelosi (D), visited New Orleans to see the damage. Mr. Hastert reportedly made no apology for his earlier comment questioning whether the government should spend money on people living in flood prone areas. „What I said was, before you rebuild New Orleans, you had better make sure that you don’t put residents in harm’s way. That’s why we’re here, and that’s what we’re doing”, he told.
The bulk of federal spending is the direct result of hurricane Katrina, although the Office of Management and Budget (OMB) does not break the numbers down that way. Instead, it works on a state by state basis. So far, the government is obligated to spend $30 billion in Louisiana, which was hit by Katrina and Rita; $11 billion in Mississippi (Katrina); $2 billion in Alabama (Katrina); $2.6 billion in Texas (Rita); and $2.7 billion in Florida (mainly Wilma). Other states will receive an additional $2.5 billion.
These numbers, however, do not include a giant $11.5 billion block grant that was part of a December Department of Defense appropriations bill, because the money hasn’t been awarded or allocated yet. Most of that money will go to Louisiana and Mississippi. It also does not include another $4.2 billion that may be allocated to pay homeowners who did not have flood insurance. And it does not include the cost of the Gulf Opportunity Zone, which will give companies a significant tax break if they invest in the region.
Some Louisiana residents say the scale of the numbers is not representative of actual spending in the state. „People will think they just dropped cash on us”, says Greg Albrecht, chief economist for the Legislative Fiscal Office in Baton Rouge. „I don’t think so.”
Instead, Mr. Albrecht says the money has gone into other people’s pockets - such as for debris removal and for FEMA trailers built in other states. „But none of that is income here. None of it is brick and mortar in the ground.”
Louisiana itself has been slow to send spending plans to federal officials. The Department of Housing and Urban Development has some $6.2 billion in a Community Development Block Grant that is sitting in the Treasury waiting for Gov. Kathleen Blanco (D) to detail how it will be used. „We will turn those around very quickly”, says HUD spokesman Brian Sullivan. „We understand they need to put that money to work very quickly.”
A spokeswoman for the Louisiana Recovery Authority says a partial plan will be on the way soon. It will include $100 million in bridge loans to small businesses and another $100 million on infrastructure and economic development needs. „We had to get approval from the legislature. Now we’re in the process of sending in a partial action plan”, says the spokeswoman.This week, the Senate Appropriations Committee hold hearings on a request for additional emergency spending to help homeowners. The governors of Louisiana, Mississippi, and Alabama will be there.
According to a Jenny Manley, a spokeswoman for Senator Thad Cochran (R) of Mississippi, the committee hopes to have a markup of the legislation by the end of the month. „We hope to have it to the president no later than Memorial Day”, she says. (The Christian Science Monitor)
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