Disaster fund stalemate could have broader impact

WASHINGTON–The congressional firefight over a stop-gap funding bill for fiscal year 2012 has immediate implications for Connecticut’s ability to respond to Tropical Storm Irene. But it also puts in jeopardy a small victory that Democrats won in the debt-ceiling deal that Congress passed last month.

And if that debt-deal win comes unraveled, it could have broader ramifications for Connecticut and other states, which stand to lose millions of dollars in transportation, education and low-income energy assistance funds.

“We’ve got to put pressure on [House Republicans] to… live up to that agreement,” said Rep. Rosa DeLauro, D-3rd District.

Much of the attention in the current showdown over the stop-gap funding bill has focused on disaster aid, and for good reason. The Federal Emergency Management Agency’s Disaster Relief Fund is quickly running out of money. The agency is currently only able to respond to the immediate needs of victims who suffered damage in Tropical Storm Irene and other recent disasters, pushing off longer-term rebuilding projects.

The House stop-gap bill includes $1 billion to immediately replenish FEMA’s Disaster Relief Fund and another $2.65 billion for fiscal year 2012. It was defeated by an unlikely combination of Democrats and Tea Party Republicans.

Democrats like John Larson, D-1st District, voted against the bill in large part because GOP leaders insisted on “offsets”–paying for the extra $1 billion in 2011 disaster aid by cutting $1.5 billion from a loan program for companies that manufacture energy-efficient vehicles.

Larson and others noted that Republicans never insisted on spending cuts to pay for the Bush-era tax cuts or the wars in Iraq and Afghanistan. He said it’s “morally wrong” to require offsets now to cover the emergency disaster aid, which has typically sailed through Congress without such offsets.

Republicans argue that the new fiscal climate dictates an end to spending that’s not paid for. They say the targeted loan program has plenty of cash to spare (a $1.5 billion cut would still leave $2.5 million in that pot), and they questioned the initiative’s effectiveness.

The Senate has passed a much more generous disaster aid package, which would give FEMA $500 million immediately for its disaster fund and another $6.4 billion for fiscal year 2012. DeLauro and others say the larger sum is needed to adequately respond to the massive damage in Connecticut and other states wrought by Tropical Storm Irene.

But even as they fight for more disaster aid, Democrats are warily watching to see how Republican leaders respond to the defeat of the stop-gap bill–and particularly to the objections of Tea Party Republicans who voted against it.

Conservatives voted “no” because it set overall spending for 2012 at $1.043 trillion. That was the number Congress and the White House agreed to as part of this summer’s deal to raise the debt ceiling, but conservatives still want to push the spending total closer to the figure initially approved by the GOP in April, which is $24 billion less.

Sticking to the debt-ceiling agreement would give lawmakers like DeLauro a little extra wiggle room in crafting the annual spending bills that fund transportation, health, education, and labor programs–cherished line items for Democrats and vital funding streams for the states.

GOP leaders signaled that much of that extra cash would be steered to the labor, health and education spending bill and a second transportation and housing funding measure–a move welcomed by DeLauro and other Democrats on those spending committees. Under the House GOP’s initial budget, Republicans planned to cut about $47 billion from current spending levels, with more than half of that sum coming from those two bills.

DeLauro said the extra funds would enable her to cushion the blow to education programs, job training initiatives, and the Low Income Home Energy Assistance Program, or LIHEAP. “People look to this bill” for a bevy of critical services, DeLauro said.

“They came to an agreement and I would hope they would live up that agreement,” DeLauro said of House Republicans.

After yesterday’s defeat, House Republicans have spent much of Thursday behind closed doors, trying to figure out a path forward for the spending legislation. Speaker John Boehner, R-Ohio, could pare back the $1.043 trillion top-line number to appease conservatives, but that would provoke a battle in the Senate, which is controlled by Democrats. Or he could restore the $1.5 billion cut to the vehicle loan program, wooing Democratic votes and putting pressure on the Senate for a slimmer overall disaster aid package.

Either way, there’s a lot at stake for Connecticut.