Billions in Disaster Aid Still Waiting to Be Spent

Plus, a plan to fight the next recession By Yuval Rosenberg and Michael Rainey Billions in Disaster Aid Still Waiting to Be Spent The U.S. has allocated more than $100 billion since 2017 to help cities and states rebuild after natural disasters, but most of the money remains unspent. “As of June 30, the government had spent less than one-third of the $107 billion provided by Congress following the hurricanes and wildfires of 2017 and 2018, federal data show,” The New York Times’s Christopher Flavelle [wrote]( Thursday. The money was provided by Congress in the wake of a series of unusually powerful natural disasters over the last two years — Hurricanes Harvey, Irma, Maria, Florence and Michael, and the 2017 and 2018 California Wildfires — to more than 20 federal agencies, including the Federal Emergency Management Agency, the Small Business Administration, and the Departments of Homeland Security, Defense and Housing and Urban Development. Here’s a summary of the status of that funding as of June 30, 2019, taken from the [FEMA website](. Two federal agencies, FEMA and HUD, account for more than 65% of the funding. HUD has received $37 billion since 2017, more than any other agency, but has spent just $75 million — less than 1% of its allocation. FEMA is sitting on roughly $8 billion of the $34 billion it has been allocated. Speed vs. oversight: The existing disaster relief programs were designed years ago, at a time when natural disasters were less frequent and less severe, Flavelle says. The system is filled with bureaucratic roadblocks, established in part due to lawmakers’ concerns about waste, fraud and abuse. Multiple layers of safeguards and review translate into sometimes extreme delays in the disbursement of funds. “There are opportunities to make the recovery process faster at every level,” a former HUD official told Flavelle. “We’ve got to fix this.” Time for a sustainable system: One way to improve the process of distributing relief funds would be to create a permanent system for dealing with the aftermath of disasters, with dedicated staff at the state, local and federal levels, experts say. This summer, the House Financial Services Committee voted to make HUD’s disaster recovery program permanent, and the Senate is considering similar legislation. Challenges will remain, however, given the unpredictable nature of disasters. In the long run, the U.S. needs to do more to address the deep, underlying causes of the rising costs of disasters, including changing the way communities build new roads and housing. “We have to start preparing for these things,” one sustainability expert told Flavelle. “Dorian is the new normal.” With Shutdown Deadline Approaching, Congress Has Lots of Budget Work to Do The Senate’s sprint to the end of September will start next week. When lawmakers return from their recess, they’ll have a long to-do list, and relatively little time to deal with some key items — including avoiding another government shutdown. On the fiscal front, the Senate Appropriations Committee reportedly hopes to mark up all 12 of the required annual spending bills this month. Senate appropriators are set to vote Thursday on four of the 12 bills, according to a [schedule]( released by Senator Richard Shelby, the committee chair. Those four bills — Defense; Labor, Health and Human Services, and Education; Energy and Water; and State and Foreign Operations — cover a large majority of federal discretionary spending. The Senate Appropriations Committee will also vote on top-line spending numbers for the 12 funding bills. But with the new fiscal year starting October 1, the Senate is unlikely to have enough time for its spending bills to be passed and reconciled with versions approved by the House, meaning that lawmakers will have to pass a stopgap spending bill to prevent another government shutdown and buy more time to hash out full-year funding agreements between the two chambers. Senate appropriators are aiming to get at least one major package of funding bills ready for the president’s signature before the new fiscal year, limiting how much of the government has to be covered by a stopgap measure, according to [The Hill](. The House, meanwhile, will vote the week of September 16 on a stopgap spending bill to keep the government funded into the new fiscal year that begins October 1, according to a letter released by Democratic Majority Leader Steny Hoyer cited by [Roll Call](. The House has approved 10 of the 12 required annual spending measures, but those bills will need to be reconciled with the Senate versions and adjusted to fall in line with the two-year budget deal agreed to by Congress and President Trump before the August recess. The House’s short-term spending bill, known as a continuing resolution (CR), will likely extend funding until late November, potentially setting up a pre-Thanksgiving deadline of November 21 for lawmakers to pass full-year spending bills needed to avoid another government shutdown. It’s not yet clear whether the Republican-led Senate and the White House will agree to the House bill’s timeframe or press for a December deadline, according to Roll Call. Op-Ed of the Day: Fighting the Next Recession Now Jason Furman, the former chairman of the White House Council of Economic Advisers under President Obama, has some advice for Congress: Start preparing for the next recession now. In a Wall Street Journal [op-ed]( Furman argues: “Congress should pass a law immediately that would automatically trigger stimulus if the labor market deteriorates, with unemployment rising rapidly. The package should include not only tax cuts but also relief for states, as well as extra help for people most hurt by recessions. The legislation should be permanent, the measures lasting as long as needed in the next downturn and set to trigger in future ones as well.” Furman writes that, while the U.S. economy is still “in good shape” and doesn’t need the stimulus right now, some red flags have popped up, including a worldwide economic slowdown and risks from President Trump’s trade policy. Furman notes, as others have, that the Federal Reserve will have much less room than usual to lower rates and provide an economic jolt in the event of a slowdown now. He recommends that Congress adopt a stimulus plan tied to a rule named for economist Claudia Sahm: “A downturn is probably occurring if the three-month average of the unemployment rate has risen by at least 0.5 percentage point above its low point in the previous 12 months.” The rule, Furman says, has been a reliable indicator of every recession since 1970, “with virtually no false positives.” If that alarm is tripped, Furman says, “Congress should adopt Ms. Sahm’s [idea]( of a trigger for stimulus payments to households. The most equitable and efficient payment would be a flat sum that phased out at higher incomes, but a payroll-tax cut would be a decent alternative.” As part of its stimulus plan, Furman adds, Congress should also automatically extend unemployment benefits and other safety net programs and increase federal matching for Medicaid in states with high unemployment rates. “These economic interventions would occur only when needed, unlike the needless stimulus from tax cuts and spending increases in 2018,” Furman writes. “They would also last as long as needed, unlike the stimulus that was cut off prematurely in 2012 despite an unemployment rate still at 8%.” Read Furman’s full op-ed at [The Wall Street Journal]( (paywall), or read Jonathan Chait’s argument for why Democrats need to act now, while Trump is still president, at New York magazine’s [Intelligencer](. Your Prize for Making It Through the Week The most mind-boggling political story of the week has to be [Sharpie-gate]( President Trump’s attempt to defend his mistaken warning that Hurricane Dorian threatened Alabama by altering a storm map with a black marker. As Politico described it: “An ill-timed, inaccurate but well-intentioned Twitter warning from President Donald Trump at the start of the week extended into a five-day presidential feud by Thursday, transforming a forgettable fact check of his words into an epic storm of attacks as the president repeatedly doubled down and dug in.” But at least the memes were funny. You can — and should — check out some of the best ones [here]( [here]( or [here](. News - [Congress Is Poised to Stop Surprise Medical Billing. Now a Shady Interest Group is Trying to Tank It.]( – Daily Beast - [U.S. Economy Adds Just 130,000 Jobs in August Amid Worries That Trade War Has Sunk Its Teeth into Hiring]( – Washington Post - [The Disappointing Jobs Report Would Have Been Much Worse Without Newly Hired Census Workers]( – CNBC - [Trump Plan Would Steer Foreign Aid to ‘Friends and Allies’]( – Politico - [Dems Demand Info on Trump Allegedly Steering Government Spending to His Resorts]( – Politico - [House Panel Probing Whether Pence’s Stay at Trump Resort in Ireland Improperly ‘Enriched’ the President]( – Washington Post - [More Than Half of House Democrats Now Support Medicare-for-All]( – Washington Post - [Fed Says Trump's Trade Fight Is Cutting U.S. Economic Growth]( – Washington Post - [How Political Maneuvering Derailed a Red State’s Path to Medicaid Expansion]( – Kaiser Health News - [Insurers Pitch New Ways to Pay for Million-Dollar Therapies]( – Wall Street Journal (paywall) - [Novo Nordisk to Sell Discount Insulin After Criticism Over Price]( – Bloomberg - [Groupon For Medical Scans? Discounted Care Can Have Hidden Costs]( – NPR Views and Analysis - [The American Medical System Is One Giant Workaround]( – Theresa Brown, New York Times - [The Two Important Asterisks to the Latest Jobs Numbers]( – Philip Bump, Washington Post - [What Will Be the Economic Backdrop for the 2020 Election? New Data Gives Hints]( – Neil Irwin, New York Times - [Payment Accuracy and the American Health Care System]( – Dave Cardelle and Amy Larsson, Morning Consult - [Trump’s Move to Put $3.6 Billion in Military Funding Toward the Border Wall Could Hurt GOP Senators]( – Jacob Pramuk, CNBC - [Trump Said He’d Rebuild Manufacturing. Now It’s in Decline. What Happened?]( – Andrew Van Dam, Washington Post - [We’re in the Midst of Trump’s War on Children]( – Catherine Rampell, Washington Post - [Trumpism Is Bad for Business]( – Paul Krugman, New York Times [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.