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Hurricane Harvey

White House seeks US$5.9billion in initial Harvey recovery aid - but total bill could hit US$100billion

Congress is likely to vote on the first tranche of aid next week, amid fears the final cost could rival that of Hurricane Katrina

PUBLISHED : Friday, 01 September, 2017, 2:22pm
UPDATED : Friday, 01 September, 2017, 11:06pm

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

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 US$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 authorised to release the information publicly before a final decision is made and spoke on condition of anonymity.

House Republican Party leaders have signalled they are aiming to act fast on Harvey aid. Much larger future instalments will be required but the initial package, to replenish Federal Emergency Management Agency disaster coffers through September 30, shouldn’t be controversial.

FEMA is spending existing disaster aid reserves – just US$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 a better handle on the damage we can come back with a responsible last, so to speak, supplemental request.”

Houston Democratic Representative Sheila Jackson Lee has already said it could take an aid package of US$150 billion to handle the disaster.

It’s not yet known how much money the administration will ask for in the initial request, but congressional aides expect at least enough money to carry out relief efforts through the end of the budget year on September 30.

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

Another aid instalment seems sure to be added to a temporary government funding bill.

The call Wednesday night included officials from the Department of Homeland Security, the aide said. They say the full scope of damages might not be known for weeks or more, and the floodwaters in Texas and Louisiana may take weeks to recede, aides said.

The House Republican Party aides were not authorised to be quoted by name discussing details of the private conversation and spoke on condition of anonymity. They said no specific dollar figures or timing were discussed.

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, a US$876 million cut from FEMA disaster accounts that helps balance the cost of Trump’s US$1.6 billion request for the US-Mexico border wall. Republicans say that will change before a vote next week.