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Hurricane Harvey: White House prepares USD 5.9B package for recovery aid


Washington, September 1: After the worst of the storm has cleared out of the Houston area, the disaster is expected to cost Texas an economic loss of around USD 160 billion. The disaster resulted in massive destruction, killing 38 people.

The White House has prepared a request to Congress for an initial USD 5.9 billion package in Harvey recovery aid, a first down payment to make sure recovery efforts over the next few weeks are adequately funded.

Hurricane Harvey: White House prepares USD 5.9B package for recovery aid

The Trump proposal, which is being finalised pending White House consultations with key Republicans, promises to represent just a fraction of an eventual Harvey recovery package that could rival the USD 100-billion-plus in taxpayer-financed help for victims of 2005's Hurricane Katrina.

A senior administration official said the plan will be sent to Congress on Friday and House and Senate votes appear likely next week. The official was not authorized to release the information publicly before a final decision is made and spoke on condition of anonymity. House GOP leaders have signaled they are aiming to act fast on Harvey aid.

Much larger future installments will be required but the initial package, to replenish Federal Emergency Management Agency disaster coffers through Sept. 30, shouldn't be controversial. FEMA is spending existing disaster aid reserves just USD 2.1 billion as of Thursday at a high rate.

The initial aid money would be a down payment for immediate recovery efforts, to be followed by larger packages later, said White House homeland security adviser Tom Bossert. It will take weeks or months to assess the full extent of the damage and need.

"We'll go up to Congress and give them a sound supplemental request number. We'll add to it," Bossert said. "And when we can get a better handle on the damage we can come back with a responsible last, so to speak, supplemental request."

FEMA pays for immediate shelter costs and can finance home repairs up to USD 33,000 or so, but other costs such as flood insurance payments, larger housing damage, and state, local, and government buildings promise a major price tag. Houston Democratic Rep. Sheila Jackson Lee has already said it could take an aid package of $150 billion to handle the disaster.

Hurricane Katrina in 2005 is the largest disaster the nation has faced, with recovery costs of $110 billion, according to the Congressional Budget Office. Superstorm Sandy in 2012 was followed by a $54 billion federal relief effort.

Katrina aid started with a noncontroversial infusion, followed by considerable wrangling between lawmakers from affected states and more budget-conscious lawmakers.

Sandy involved a more public battle between lawmakers from Democratic-leaning New York and New Jersey and GOP conservatives, and Northeast lawmakers have taken to social media sites such as Twitter to say "I told you so." Another aid installment seems sure to be added to a temporary government funding bill.

Another concern is that the government's cash reserves are running low since the nation's debt limit has been reached and the Treasury Department is using accounting measures to cover expenses.

Billions of dollars in Harvey aid are an unexpected cost that at least raises the potential that Congress will have to act earlier than expected to increase the government's borrowing authority.

Treasury Secretary Steven Mnuchin, however, said on CNBC Thursday that the debt limit deadline probably won't change by more than a couple of days, if at all.

Also on tap when the House returns: Fixing a poorly-timed spending bill for next year that actually proposes cutting the very disaster aid reserves that are running low now.

A catchall domestic spending bill facing a House vote next week includes, for now, an $876 million cut from FEMA disaster accounts that helps balance the cost of Trump's USD 1.6 billion request for the US-Mexico border wall. Republicans say that will change before a vote next week.


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