Hurricane Irene Cost Taxpayers $1.5 Billion, White House Says

Hurricane Irene will cost taxpayers about $1.5 billion in federal disaster relief, the White House said, creating new budget headaches for Congress and adding to the deficit for fiscal year 2012, which begins Oct. 1.

White House budget director Jack Lew said in a blog posting yesterday that the $1.5 billion is on top of the estimated $5.2 billion in other needs to cover earlier disasters, including flooding in Tennessee and tornadoes in Missouri and Alabama.

PresidentBarack Obama, visiting areas hit by Hurricane Irene, told residents of northern New Jersey on Sept. 4 that the federal government would provide “all the resources” necessary to help them recover.

“I want to make very clear that we are going to meet our federal obligations,” Obama said in flood-ravaged Paterson, New Jersey, with the state’s governor, RepublicanChris Christie, at his side.

Irene made landfall on Aug. 27 in North Carolina and swept up the East Coast and into New England. The storm and related flooding killed dozens of people, damaged roads and buildings and cut power to millions.

Obama has signed emergency declarations for Pennsylvania, Connecticut, Delaware, Massachusetts, Maryland, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, Vermont, Virginia and the District of Columbia.

Congressional Flexibility

In a Sept. 1 letter to the Democratic and Republican leaders of the U.S. Senate and House Appropriations and Budget committees, Lew said that Congress has flexibility to deal with disaster spending under the debt-ceiling measure enacted last month. He said lawmakers allowed for discretionary spending to be raised by “no more than the average funding” of disaster relief over the last decade, and that an increase didn’t require lawmakers to offset spending elsewhere.

The average funding of disasters over the last 10 years, he said, was $11.5 billion, discarding the highest and lowest years.

House Majority Leader Eric Cantor, a Virginia Republican, said on Aug. 31 that budget cuts should help cover the cost of cleaning up after Hurricane Irene and other disasters.

Both Republicans and Democrats have said that more funding is needed to help communities rebuild. The Federal Emergency Management Agency, its accounts almost drained, redirected money in a $792 million disaster fund to states hit by Irene.

A Senate Appropriations subcommittee is scheduled to meet today to consider legislation that includes disaster aid.

Work With Congress

Lew said the Obama administration will work with lawmakers “to fund both the $5.2 billion needed for non-Hurricane Irene known disaster needs and the roughly $1.5 billion that we now estimate is needed for Irene through FY 2012.”

“We are one country,” Lew wrote in the blog post. “A disaster in one corner is felt by Americans all across our land. That is why when it comes to taking care of our neighbors in need, we will not let politics get in the way and will do what is right to help them recover and rebuild.”

According to the Office of Management and Budget’s Sept. 1 report to lawmakers, Congress has appropriated $131 billion for disaster relief in the last decade. The highest annual spending was $37.2 billion in the 2005 fiscal year, when Hurricane Katrina struck New Orleans. The lowest was $1.9 billion in 2003.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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