Bloomberg News

Obama Seeks $60.4 Billion to Assist Sandy Recovery

December 08, 2012

President Barack Obama asked Congress for $60.4 billion to pay for damage caused by superstorm Sandy, putting the disaster relief request from northeastern states into the middle of a debate over the federal deficit.

While the amount is less than the $83 billion in assistance that regional officials sought, governors Chris Christie of New Jersey and Andrew Cuomo of New York welcomed the accord with the White House yesterday on the funding package.

Obama’s request “will enable our states to recover, repair, and rebuild better and stronger than before,” Christie, a Republican, and Cuomo, a Democrat, said in a joint statement. At a briefing in Manhattan, Cuomo said the aid would give states flexibility in how the money is spent and help cover the cost of efforts to protect infrastructure from future storms.

“This is the first good news New York has had in a while,” Cuomo said. “This is a very big deal for New York.”

The supplemental spending request follows weeks of lobbying by officials from the states hardest hit by the storm and comes as Obama and Republicans in Congress are locked in negotiations over how to avoid more than $600 billion in higher taxes and spending cuts set to begin in January. The goal is to agree on a plan to shrink the federal deficit, which has exceeded $1 trillion in each of the past four years.

Rebuilding Needs

The Northeast is still working to rebuild since Sandy, the biggest Atlantic storm on record, pounded the region Oct. 29 with winds reaching 100 miles (160 kilometers) an hour. The storm flooded seaside communities from New Jersey to Rhode Island, damaged tens of thousands of homes, and crippled subways and electric utility systems.

In a letter outlining the funding plan, Office of Management and Budget Acting Director Jeffrey Zients said the money would be used to repair damage to homes and infrastructure and help prepare for future storms.

“Our nation has an obligation to assist those who suffered losses and who lack adequate resources to rebuild their lives,” Zients wrote.

The funding includes $17 billion to help homeowners, along with $6.2 billion to repair the public transportation infrastructure in the New York City area.

Housing, Mitigation

The request includes $11.5 billion in disaster relief funding and $15 billion for block grants to assist homeowners and businesses in covering rebuilding and repair costs not underwritten by the Federal Emergency Management Agency, private insurance or Small Business Administration loans.

Restoration projects that would be paid for range from $2 million for roof repairs of Smithsonian Institution buildings in Washington, Virginia and Maryland, to $6 million to restock food banks and soup kitchens drained by demand from Sandy victims.

Almost $13 billion, or more than a fifth of the money sought, would be used to mitigate future natural disasters, including $5.5 billion to make public transportation systems “more resilient” to wind and flooding. The request also seeks to reduce flood risks with more than $3.8 billion for the Army Corps of Engineers and $400 million for the U.S. Fish and Wildlife Service, to enhance natural ecosystems.

New York Representatives Nita Lowey, a Democrat, and Peter King, a Republican, said more money will be needed later.

First Step

“This robust package is a major first step that we will work to pass as quickly as possible in Congress to help devastated communities, families and businesses,” they said in a joint statement.

New York Mayor Michael Bloomberg said it’s now up to Congress to take swift action “in a bipartisan fashion.”

“We need a full recovery package to be voted on in this session of Congress,” Bloomberg said in a statement. “Any delay will impede our recovery.”

The mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.

A spokesman for House Speaker John Boehner, Michael Steel, said the Ohio Republican has the request “and will review it.”

Christie, who met with Boehner while in Washington, said he’ll “use every tool” to secure federal recovery funding. New Jersey gets the worst return on its federal tax dollar of any U.S. state and its residents have underwritten disaster responses across the U.S., the governor said.

“These are not wants: These are needs,” Christie said. “Speaker Boehner has told me that offsets isn’t the direction in which the House Republican Conference will be moving,” he said, referring to balancing new spending with cuts elsewhere.

The aid plan follows weeks of lobbying by New York and New Jersey officials. Obama and Christie talked for about 30 minutes Dec. 6 at the White House and the president spoke with Cuomo by telephone.

If approved, the request would be less than the $110 billion directed to the Gulf Coast after Hurricanes Katrina and Rita hit in 2005, according to the Government Accountability Office, a nonpartisan research arm of Congress.

To contact the reporters on this story: Lisa Lerer in Washington at llerer@bloomberg.net; Roger Runningen in Washington at rrunningen@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net.


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