White House Asks Congress for $29 Billion in Hurricane Aid

“With two more months of hurricane season remaining and wildfires continuing to burn in the West, we must act expeditiously to ensure that communities have the assistance they need, when they need it,” wrote President Trump’s budget director, Mick Mulvaney, in a letter to congressional leaders on Wednesday.

The first installment of disaster relief, approved in September, was part of a bigger fiscal deal that Mr. Trump struck with the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California. That deal also provided funding for the government until December, and it included a short-term extension of the debt limit.

It was not immediately clear how and when the latest disaster relief request would be handled by lawmakers. The Senate has planned a recess next week, and the House has one scheduled for the following week.

The National Flood Insurance Program was already deep in debt before this year’s hurricanes, and it has now reached its $30.4 billion borrowing limit, a spokeswoman for FEMA said on Wednesday.

The program had to start borrowing from the Treasury in 2005, when it needed $17.5 billion in fresh cash to pay big flood claims filed after Hurricanes Katrina, Rita and Wilma. In 2012, it borrowed another $6.25 billion to pay claims filed after Hurricane Sandy. As now structured, the program has no way to repay the Treasury, and is carrying the debt forward on its books, year after year.

Private insurance companies get the money they need to pay claims by charging policy holders premiums and building up carefully calculated reserves. The National Flood Insurance Program charges premiums, too, but most experts agree they have fallen far behind the rising cost of repairing homes and businesses after catastrophic flooding.

As of this week, the program had just $5.8 billion available to pay claims, the FEMA spokeswoman said. More than 88,000 claims have been submitted from Hurricane Harvey, and more than 27,000 from Irma.

Asking lawmakers to take action on the program’s debt, Mr. Mulvaney wrote that the hurricanes had “inflicted projected losses of $16 billion,” and that without fresh money, the program will have exhausted its resources and be unable to pay claims “by the latter part of this month.”

Fiscal conservatives in Congress, especially those from states without much flooding, may object to the debt forgiveness because it means the taxpayers they represent will not be repaid for helping to pay flood claims in Louisiana, Texas, New York and New Jersey.

To make the taxpayer losses more palatable, the White House also proposed on Wednesday to raise flood insurance premiums, at least for homeowners who can afford them, and to make changes that would allow insurance companies to underwrite flood insurance themselves.

Currently, insurance companies can sell flood insurance, but they do not pay the claims with their own money. Instead, they collect fees for marketing and administering the policies and pass the risk on to the federal government.

“The N.F.I.P. is simply not fiscally sustainable in its present form,” Mr. Mulvaney said in his letter. He said the proposed changes would help “to place it on a sound financial footing.”

Representative Jeb Hensarling, Republican of Texas and the chairman of the House Financial Services Committee, has been pressing for changes to the program, but lawmakers have been unwilling to impose higher premiums on constituents in flood zones.

Democrats in Congress have been pressing the administration to step up its response to Hurricane Maria, expressing grave concerns about the humanitarian crisis it caused in Puerto Rico.

On Wednesday, Mr. Schumer described the new request for disaster relief as “a good start.”

“However, Republicans should not put much-needed aid at risk by insisting on the proposed ideological changes to the flood insurance program and forest management policy,” he said. “Those changes should be debated separately from this aid package.”

Representative Rodney Frelinghuysen, Republican of New Jersey and the chairman of the House Appropriations Committee, said his committee would put forward legislation “as soon as possible.”

“It is abundantly clear that the people of Puerto Rico and the U.S. Virgin Islands are in need of more help — in dollars, in resources, in manpower and in federal support,” Mr. Frelinghuysen said.

“This will be a long process,” he added, “and this next round of funds certainly won’t be all that is needed.”

Mr. Trump visited Puerto Rico on Tuesday, almost two weeks after Maria hit the island on Sept. 20. While there, he brought up the cost of the storm.

“I hate to tell you, Puerto Rico, but you’ve thrown our budget a little out of whack, because we’ve spent a lot of money on Puerto Rico, and that’s fine,” the president said. “We’ve saved a lot of lives.”

See Also: Still Waiting for FEMA in Texas and Florida After Hurricanes

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