Obama proposes $60bn for Sandy states

Sat, Dec 8, 2012, 00:00

US President Barack Obama proposed a $60.4 billion emergency spending bill yesterday to finance recovery efforts in states pummeled by Hurricane Sandy, a sum that White House officials called a "robust" investment in the region but that was far less than the amount the states had requested.

The spending plan would pay for most, but not all, of the $82 billion in damage identified by the governors of New York, New Jersey and Connecticut, helping homeowners and small business owners rebuild, repairing subway and other transit systems, replenishing eroded beaches and reimbursing governments for the cost of police, fire and other services.

The president's plan would not cover several big-ticket items sought by state governments. It would not pay for damage already covered by private insurance and would extend aid only to primary residences.

While small businesses will be eligible for help, larger private firms like Consolidated Edison will not. The plan also assumes that states will have to pay about 10 per cent of the cost of any repair and mitigation projects that are approved, even though they asked the federal government to cover 100 per cent.

The proposal now goes to Congress, where it is likely to become the focus of an intense fight between fiscal conservatives seeking to keep a lid on the federal spending and lawmakers from storm-battered areas bent on obtaining even more than what Mr Obama proposed.

Mr Obama proposed no spending cuts elsewhere to pay the cost, arguing that such emergencies typically do not require offsetting measures.

Leaders from New York, New Jersey and other hard-hit states generally welcomed the proposal, even though it fell short of what they were seeking to clean up storm damage and prepare for future storms.

The White House increased the overall spending request from the $45 billion to $55 billion estimated earlier in the week, attributing the change to more information received about the extent of the damage.

New York Governor Andrew M. Cuomo, a Democrat, and New Jersey Governor Chris Christie, a Republican, spent much of Friday negotiating the final package with the White House.

In a joint statement, they praised the proposal, saying "it enables our states to recover, repair and rebuild better and stronger than before."

Mr Obama's proposal seeks to finance an assortment of projects and programs reflecting the daunting array of storm-related needs, including:

$17 billion for the Department of Housing and Urban Development and the Community Development Block Grant program to provide help to homeowners.

$11.5 billion for the federal disaster relief fund that provides checks to individuals, reimbursement for government services and assistance to rebuild public facilities.

$9 billion to repair and upgrade transit systems.

$4 billion for the Army Corps of Engineers, which will be in charge of various projects including beach replenishment.

$9 billion for flood insurance.

$2 billion to repair federal facilities.

$1 billion for the Small Business Administration's aid program.

The proposal comes at a politically inopportune time, as Obama and congressional leaders in both parties try to reach an agreement intended to avert a possible fiscal crisis next month, when broad tax cuts are set to expire and automatic spending cuts are scheduled to go into effect.

As the White House finds itself locked in a showdown with congressional Republicans over these broader budget concerns, it was seeking to present the storm spending request as a separate issue that does not affect the long-term health of the Treasury.

New York Times

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