Last-minute deal reached on disaster aid

WASHINGTON–A partisan clash over funding to refill the Federal Emergency Management Agency’s coffers was resolved late Monday with Senate leaders announcing a deal for $2.65 billion in disaster aid for fiscal year 2012. In addition, the Senate approved a bill to keep federal programs operating through Nov. 18, pulling Congress back from the brink of another possible government shutdown.

The 79-to-12 Senate vote on Monday night was a sharp turnaround from the last few days, when lawmakers seemed at irreconcilable odds over the disaster aid, leaving states like Connecticut, hard hit by Tropical Storm Irene, on edge about the fate of federal aid.

“It’s a concern, because the disaster relief fund is almost empty and there’s obviously a lot of individual and municipal assistance” that needs to flow to Connecticut to deal with storm damage, Dan DeSimone, Gov. Dannel Malloy’s Washington lobbyist, said before Monday’s endgame unfolded.

Even as lawmakers negotiated an end to the impasse Monday, officials in Connecticut were transitioning seven disaster recovery centers into loan outreach centers-as officials begin to focus on helping businesses and individuals with loan applications for repairs and rebuilding. That pivot in Connecticut would have been tough if the funding impasse in Washington hadn’t been broken. That’s because FEMA has put long-term recovery efforts on hold, responding only to immediate needs as its disaster aid fund reached perilously low levels.

Monday’s deal to refill the federal Disaster Relief Fund (DRF) was made possible not by a breakthrough in bipartisan comity but a fluke of government financing. As of last week, FEMA officials had said the DRF was nearly empty–on track to be completely depleted by the middle of this week. In Connecticut and elsewhere, those funds are desperately needed by families and communities hit by Tropical Storm Irene, for both basic needs, such as temporary housing assistance, as well as long-term rebuilding and recovery efforts.

The key moment on Monday came when FEMA officials announced mid-day that they had been able to recoup about $40 million from past recovery efforts that came in under budget to help replenish the Disaster Relief Fund.

“Over the weekend, as a result of the normal recovery of dollars for longer-term projects that have been completed, FEMA recouped about $40 million,” said Rachel Racusen, FEMA’s director of public affairs. “Updated estimates from over the weekend indicate that the Disaster Relief Fund could be fully exhausted by the end of the week… Despite that recovery, the available disaster funding remains dangerously low – with roughly $114 million available.”

The extra money bought the agency another day or two–just enough to cross over into fiscal year 2012, which begins on Saturday. That extra time helped defuse a political bomb on Capitol Hill–one in which spending cuts were the explosive trigger.

House Republicans had passed a disaster relief bill providing FEMA $1 billion in emergency aid to last the rest of fiscal year 2011, which ends Sept. 30. But GOP lawmakers wanted to pay for that extra disaster funding with cuts to two energy-efficiency loan programs, infuriating Democrats who accused the GOP of undermining jobs-related programs to tout a new fiscal austerity.

By contrast, the Democratic-controlled Senate had passed a $6.9 billion FEMA disaster aid package, with no offsetting funding cuts, but it was a non-starter in the House. The two sides dug in over the weekend, even as the Disaster Relief Fund neared a zero balance.

The new-found FEMA money averted the need to give the agency any money for the rest of this fiscal year–and mooted the debate over offsets. The Senate instead approved two short-term funding bills on Monday to carry the government through Nov. 18. The House is expected to follow suit quickly.

Congress is out for the rest of this week to observe the Jewish holiday of Rosh Hashanah. When lawmakers return, they will still have to grapple with funding for FEMA, and the rest government, for the remainder of 2012.

FEMA currently has $450 million disaster-recovery projects on hold-delayed because of the current funding crunch. And the White House has said that FEMA would need $4.6 billion for fiscal year 2012, which portends another funding showdown in the coming months.