N.Y.-N.J. Sandy Aid May Drop in Sequester, Menendez Says

Across-the-board federal spending cuts that began yesterday may block as much as $2.5 billion in Hurricane Sandy relief for New York and New Jersey, according to the Garden State’s junior U.S. senator.

About $1 billion may be taken from Federal Emergency Management Agency disaster-relief funds, the main source for FEMA help for individuals and communities, said Paul Brubaker, a spokesman for Senator Robert Menendez, a New Jersey Democrat. Another $1.5 billion may be held out of block grants and transportation funding, Brubaker said.

“The effects of sequestration will be seen in various ways where the federal government has a role,” Brubaker said by telephone yesterday. “This is going to be a snowball effect.”

President Barack Obama late yesterday ordered the start of $85 billion in government spending reductions through Sept. 30, when the federal fiscal year ends, the first cuts that will reach $1.2 trillion over nine years. About $60 billion in Sandy aid was passed by Congress this year, mainly to help the October storm’s victims in New York, New Jersey and Connecticut.

As recently as this week, Menendez had told reporters that Sandy aid appeared to be safe from the sequestration process that mandates the cuts because it was contained in an emergency appropriations package.

“I believe -- I believe -- that what we did in Sandy, as an emergency package, will be separated from sequester,” he said Feb. 24 at a church in Trenton.

White House

The White House projected that $2.5 billion may be in jeopardy from sequestration, while it wasn’t immediately clear whether the effects would kick in right away or over time, Brubaker said. About $9 billion in flood insurance awards are protected, he said.

U.S. Representative Bill Pascrell Jr., a New Jersey Democrat, told Sandy-affected homeowners in Moonachie on Feb. 25 to expect a “fiscal hurricane” should sequestration begin. He said as much as $3 billion in Sandy relief would be suspended.

“This manufactured fiscal disaster will add insult to injury to the many families and businesses that are still hurting across the region,” Pascrell said.

The $3 billion estimate came from testimony before the Senate Appropriations Committee Feb. 14 by Shaun Donovan, secretary of Housing and Urban Development, according to a statement from Thomas Pietrykoski, a Pascrell spokesman.

The Star Ledger of New Jersey was first to report the latest estimate of sequestration cuts.

Jeff Sagnip Hollendonner, a spokesman for U.S. Representative Chris Smith, a Republican, didn’t respond to a message left at his office for comment on aid cuts after regular hours. Maria Comella, Michael Drewniak and Kevin Roberts, press aides for Republican New Jersey Governor Chris Christie, didn’t respond to e-mailed requests for comment.

Representatives in the governor’s office in Albany and at New York City Hall didn’t respond to messages left seeking comment on the cuts.

To contact the reporters on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net.

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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