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Trump Faces Showdown With Congress Over Harvey Emergency Funding Bill

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Zero Hedge
August 29, 2017

The totality of the damage from Hurricane Harvey isn’t yet known, and as it continues to rain in Texas and Louisiana, it will likely be a few days before officials can start tallying up the damage but President Donald Trump has already promised Texans that he will swiftly pass an emergency funding bill to help offset what’s likely to be tens of billions of dollars in damages.

But while Trump may hope that emergency funding is swiftly approved, Bloomberg points out that Congress has final say over the details of any relief bill. And lawmakers, who are not only facing a particularly hectic legislative calendar next month but don’t have the – let’s just say – best relationship with Trump these days, might not get the job done as quickly as the president would like.

According to Bloomberg, conservative lawmakers could turn obstructionist unless the plan is offset by domestic spending cuts.

“After previous storms, lawmakers have usually demanded detailed spending plans for emergency funds, while conservatives have argued that disaster funding should be offset by domestic spending cuts. With Harvey still expected to dump rain over Texas and Louisiana for several days, the full scope of the damage isn’t yet known.”

While Trump said he’s already spoken with members of Congress, he has yet to submit a formal spending request for additional relief funds.

“The real number, which will be many billions of dollars, will go through Congress,” Trump said Monday at a news conference ahead of a planned visit Tuesday to Texas to meet with local officials involved in the response. “It will happen very quickly.”

Meanwhile, at least one Texas lawmaker has promised to add relief measures to a temporary spending bill that must be passed if Republicans want to avert a government shutdown after the current spending resolution expires on Sept. 30. However, Republicans haven’t said whether they will bring such a measure up for debate after Congress returns from its summer vacation.

“As the scale of damage from the storm became apparent, Texas Democrat Sheila Jackson Lee said she will draft a “robust” relief measure to be added to a spending bill on the House floor next week. Republican leaders, however, haven’t committed to a swift debate. A spokeswoman for House Speaker Paul Ryan of Wisconsin, AshLee Strong, said Congress “will help those affected by this terrible disaster.”
“The first step in that process is a formal for resources from the administration,” she said.”

One option before Congress is to approve a “down payment request” on the cleanup effort in Texas as part of the spending bill, before passing a more comprehensive measure later.

“The stopgap bill could be a natural place to add in disaster relief funding, even if it’s just a down payment ahead of a more comprehensive relief measure later in the year. That’s how Congress handled Hurricane Katrina in 2005, when it approved $10 billion in immediate aid while most members were still on August recess. It followed up months later with a $51 billion package.”

However, the administration hasn’t yet determined how much additional funding will be needed beyond what FEMA is already planning on spending.

“So far, the Trump administration hasn’t determined whether additional funds will be needed, acting Homeland Security Secretary Elaine Duke said Monday on Bloomberg Television. She said if additional funds are needed, the Department of Homeland Security will work with Congress to obtain them.”

And with $3.3 billion in the bank, FEMA may have enough money in its disaster relief fund to start the cleanup effort, but nowhere near enough to finish it.

“A House Republican aide said that the Federal Emergency Management Agency has sufficient, disaster relief funding for now. FEMA said it has $3.3 billion in the disaster relief fund as of Monday, which includes money that can be shifted from longer-term priorities. Costs associated with Harvey are “quickly drawing down the remaining balance” in the fund, said Stephanie Moffett, a FEMA spokeswoman.”

Ironically, this time Democrats are alligned with Trump: Nancy Pelosi has already called on Democrats to support any Harvey related legislation… assuming it’s not tied to a bill that further restricts abortion rights, or funding for Trump’s border wall.

“House Minority Leader Nancy Pelosi of California issued a statement Monday saying, “Republicans must be ready to join Democrats in passing a timely relief bill that makes all necessary resources available through emergency spending.”

However, with the storm expected to cause some $30 billion in damages, including the impact on the labor force, power grid, transportation and other elements that support the region’s energy sector, more relief funding will likely be necessary – and soon. Chuck Watson, a disaster modeler with Enki Research, said in an email Monday that Harvey could be one of the top eight hurricanes to ever strike the US.David Havens, an insurance analyst at Imperial Capital, said the final tally might be as high as $100 billion, a total that could potentially threaten insurers’ balance sheets.

As of now, Harvey is on track to become the fourth most-expensive storm in US history, though this is based on an incomplete assessment of the damages.

While we wait to see how this latest Congressional drama unfolds, Trump – who is still due a response on the latest North Korea launch – says he has been in frequent contact with the Republican governor of Texas, Greg Abbott and is taking pains to show the public that he’s actively engaged in the federal response to the storm. He and Melania Trump are planning to travel to Texas on Tuesday even as Harvey, now a tropical storm but expected to regain hurricane status shortly, continues to deluge the region. An airspace restriction issued by aviation authorities suggests Air Force One will land in Corpus Christi, away from the worst ongoing flooding in the Houston region.

This article was posted: Tuesday, August 29, 2017 at 9:09 am

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