$36.5 Billion House Disaster Aid Bill Includes Funds for Puerto Rico, Wildfires, Flood Insurance

By and Kevin Whitelaw | October 12, 2017

House lawmakers unveiled a bill Tuesday night that would provide $36.5 billion in emergency funding for hurricane and wildfire relief requested by the Trump administration.

With Congress under pressure to provide urgent help to storm victims in Texas, Florida and Puerto Rico, the House measure includes $18.7 billion for the Federal Emergency Management Agency’s disaster relief fund, as well as $16 billion to replenish the nation’s flood insurance program.

The FEMA funding includes a provision that would give Puerto Rico and the U.S. Virgin Islands access to $4.9 billion in low-interest Treasury loans so they doesn’t run out of cash as the islands recovers. That funding is needed to help the territory pay government salaries and other expenses after Oct. 31. House Speaker Paul Ryan said the bill will be on the House floor Thursday for a vote, after which it could taken up by the Senate when that chamber returns next week.

“Harvey, Irma, Maria, they’ve been devastating for Texas, Florida, Puerto Rico,” Ryan said at a news conference Wednesday. “This is a time when we here in Congress need to respond because that is our responsibility.”

House Appropriations Chairman Rodney Frelinghuysen of New Jersey said, “You have a lot of people in pain,” adding that he expects the next tranche of aid to be passed before December. “I think there is some momentum to get some money out the door as quickly as possible.”

Congress needs to act quickly, particularly when it comes to flood insurance. The National Flood Insurance Program needs additional funding to cover claims from all the recent storms.

The bill will be brought to a vote as soon as Thursday under a fast-track procedure that will require Democratic votes to pass. Minority Leader Nancy Pelosi of California praised the measure.

‘Frustrating Place’

An aide to Pelosi said she fought for two items included in the bill: loans for Puerto Rico and the U.S. Virgin Islands, also suffering from hurricane damage, and $1 billion in disaster funds over the White House request in light of California wildfires. The bill includes no flood insurance policy changes, which the aide said is a victory, after Republicans had discussed revisions to the program.

Representative Mark Walker of North Carolina, who heads the conservative Republican Study Committee, said he is disappointed the measure doesn’t include any spending cuts to offset the disaster funding and still trying to decide whether to vote for it.

“This is a very frustrating place,” he said Wednesday.

Jim Jordan, an Ohio Republican and member of the conservative Freedom Caucus, said he won’t support the bill because there aren’t plans to offset the costs and because there aren’t changes to the flood insurance program.

Several other lawmakers, from both parties, said they’d support the legislation.

Texas Republican Blake Farenthold said: “They don’t have to sell me on that one.”

Nita Lowey, a New York Democrat, said disaster victims deserve help from the federal government. “This package provides critical public and individual disaster assistance, flood insurance aid, liquidity for Puerto Rico’s government, and help for communities devastated by wildfires,” she said in a statement.

The loan authority for Puerto Rico is also a needed financial lifeline for the U.S. territory of 3.4 million people that’s been operating in bankruptcy since May, which makes it difficult — if not impossible — for the government to borrow on its own.

Averting a Shutdown

With the island still recovering from the storm, much of the economy there has ground to a halt, radically curtailing the government’s tax collections. Puerto Rico’s treasury secretary, Raul Maldonado, said last week that the territory faces a government shutdown on Oct. 31 that would halt its hurricane recovery efforts if Congress doesn’t intervene.

The package includes a $150 million advance to cover a matching-funds requirement from the commonwealth, an administration official said. It would be available for easing short-term expenses such as payroll and pension payments, though not for debt service on bonds.

The devastation wrought by Hurricane Maria is threatening to exacerbate the financial crisis that had already pushed the island into a series of record-setting defaults on its $74 billion of debt. The scale of the damage, which has left most of the island without electricity almost three weeks after the storm, has caused Puerto Rico bond prices to tumble as investors speculate they’re likely to recoup even less of their investments.

Puerto Rico’s delegate to Congress, Jenniffer Gonzalez Colon, said at a news conference with House Republican leaders Wednesday that she was pleased that the aid plan will help the island deal with the “humanitarian crisis.”

“We still have a dire situation on the island,” Gonzalez said. “It’s not easy when you’re used to living in an American way of life and then somebody tells you that you’re going to be without power for six or eight months.”

“We’re still counting the fatalities,” she said, with 45 dead as of Wednesday. More than 86 percent of the population still lacks electricity and more than 44 percent is without running water, Gonzalez said.

One notable omission from the broader funding measure is additional funding for the Community Development Block Grant Program at the Department of Housing and Urban Development, which a bipartisan group of Texas lawmakers had asked to be included in this measure.

“I am counting on the next supplemental having the extra funds for Texas” Representative John Carter of Texas, the chairman of the House Homeland Security Appropriations subcommittee said.

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