Full Recovery from Hurricane Harvey May Cost Over $100 Billion Federal Investment
Congress returned to Washington this week after a month-long recess and it responded to the devastation caused by Hurricane Harvey as well as extended the deadline to raise the debt ceiling and continued FY18 funding until December 8th. These actions were part of a deal that President Trump made with Democratic leaders in the House and Senate.
According to the NY Times, Republican leaders had wanted a longer-term extension of the debt limit, but were left with little recourse when Mr. Trump sided with the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, at a White House meeting on Wednesday, blindsiding his own party.
The fiscal deal eases the pressure to resolve a thicket of pressing issues this month, but it sets up a high-stakes face-off later this year when lawmakers will need to agree on another funding measure to keep the government open in the long term. Congress will also need to take further action to raise the government’s borrowing capacity and likely will face a far larger hurricane-relief package. Democrats hope to be able to negotiate with Republicans on other issues, too, such as immigration and a measure to stabilize health insurance markets.
The National Low Income Housing Coalition (NLIHC) reports that while the full extent of the damage is unknown, experts anticipate that recovering from Hurricane Harvey may require over $100 billion in federal disaster relief funds especially to repair or rebuild federally assisted housing developments that were damaged by flooding and to help the lowest income people who were displaced by the storm.
In recent years, some conservative members of Congress have criticized the role of the federal government in responding to natural disasters. In 2005, Vice President Mike Pence, then a Republican congressman, called for offsetting any post-Hurricane Katrina aid with budget cuts in other programs.
After Superstorm Sandy destroyed much of the New York and New Jersey coastline, 179 House members and 36 Senators – including Texas Senators John Cornyn and Ted Cruz – voted against federal aid because they argued it included too much “pork and unrelated spending,” in Mr. Cruz’s words.
Former Congressman Mick Mulvaney, who now serves as President Trump’s director of the Office of Management and Budget (OMB), unsuccessfully advocated to offset the cost of Sandy relief with across-the-board cuts to domestic programs.
On September 7, the House approved an initial appropriation of $7.85 billion requested by the Trump administration to help Houston and southeast Texas recover after Hurricane Harvey. The package includes $7.4 billion for FEMA’s Disaster Relief Fund and $450 million for the Small Business Administration’s disaster loan program, designed to help individuals and small businesses begin rebuilding their homes.
The Senate beefed up that aid package by adding another $7.4 billion, for a total of about $15.3 billion.
“The recovery effort for a record-setting storm like Harvey has strained resources to the limit already,” said the Senate majority leader, Mitch McConnell, Republican of Kentucky. “The advance of another historic storm now makes the need for action even more urgent.”
More conservative members of Congress, including the House Freedom Caucus, resisted combining Harvey relief funds with other bills, calling instead for deep spending cuts and reforms alongside any legislation to lift the debt ceiling.
“The president and I believe that [debt ceiling legislation] should be tied to the Harvey funding, that our first priority is to make sure that the state gets money,” stated Treasury Secretary Steven Mnuchin. “It is critical and to do that, we need to make sure we raise the debt limit.”
Texas Governor Greg Abbott described the disaster aid package as an important initial “down payment” on Harvey relief that he expects will come to $150 billion to $180 billion. “We need Congress to step up and pass this and help Texas rebuild,” he said.
NLIHC will advocate with leaders on Capitol Hill and in the Administration to ensure sufficient federal funding is allocated to support the needs of those impacted by Harvey, particularly those with the lowest incomes.