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Administration Releases Third Supplemental Emergency Funding Request

Friday, November 17, 2017, the Administration released the third supplemental emergency funding request in response to Hurricanes Harvey, Irma, and Maria, as well as the California wildfires. The White House is requesting an additional $44 billion in Fiscal Year (FY) 2018 for states impacted by the storms and fires, in addition to Federal property repairs.

The Administration’s request letter, submitted by Office of Management and Budget Director Mick Mulvaney, identifies five programs/activities to fund. Those programs are traditional disaster relief provided by the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA); emergency agricultural assistance; educational recovery fund; funding to repair or replace damaged Federal property and equipment; and the Community Development Block Grant Disaster Recovery program, focused on flood mitigation projects. The Administration does not make a request on funding for any programs administered by the U.S. Department of Agriculture (USDA).

 

Program Request
FEMA and SBA $  25,200,000,000.00
Emergency Agriculture Assistance $     1,000,000,000.00
Education Recovery Fund $     1,200,000,000.00
Repair and Rehabilitation of Damaged Federal Property/Equipment $     4,600,000,000.00
CDBG – Disaster $  12,000,000,000.00
Total $  44,000,000,000.00

 

The Administration also requests tax relief for families in areas impacted by the wildfires in California, including non-itemized deductions for casualty losses; waiving the current-law requirement that losses exceed 10 percent of adjusted gross income; penalty-free access to retirement funds; disaster-related employment relief; earned income tax credit reporting-year flexibility; and enhancement of charitable giving incentives. These provisions are similar to the tax relief provided in Public Law 115-63, the Disaster Tax Relief and Airport and Airway Extension Act of 2017, to the areas impacted by Hurricanes Harvey, Irma, and Maria.

The letter also includes several other requests from the Administration, including the need to reauthorize and reform the National Flood Insurance Program (NFIP), suggestions of offsets, a recommendation to extend the non-defense Joint Committee mandatory sequestration resulting from the 2011 Budget Control Act (BCA), pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985; and additional funding for the Department of Defense (including $4 billion for missile defeat and defense enhancements to counter the threat from North Korea and $1.2 billion in support of the Administration’s South Asia strategy, as well as $1.6 billion for the boarder wall).

In a separate document, the Administration outlined their suggested offsets, which total $59 billion and would largely come from extending the sequester. Many of the proposed offsets are reiterations of eliminations or reductions included in the FY 2018 budget request – which Congress has already largely rejected. Those offsets include $196 million for Rural Economic Development Grants; $25 million for direct and guaranteed business and industry loans and rural business development grants; $8 million for the Rural Energy Savings Program; and $800 million for the Special Supplemental Nutrition Program for Women, Infants, and Children.

Members of Congress are already sounding off on this request. Senate Majority Whip John Cornyn (R-TX) has called the request “wholly inadequate.” Representative John Culberson (R-TX-7), a senior House appropriator, is quoted saying that this request “would sabotage what has been an incredible response by President Trump to Hurricane Harvey up to this point,” and that this request “falls severely short of the bare minimum needed to continue repairing the damage of Hurricane Harvey in Texas in every aspect. OMB’s response to the largest housing disaster, in terms of volume and dollar amount, would be laughable if it wasn’t so serious.” In October, Cornyn and Culberson signed on to the $61 billion request submitted by Texas Governor Greg Abbott for Texas relief funding.

Puerto Rico’s advocates on the Hill, including Representative Nydia Velazquez (D-NY-7), similarly state that this request would “hinder the Puerto Rican government’s capacity to address the situation on the ground.”

Congress has already provided $51.75 billion for disaster recovery since September (P.L. 115-56 and P.L. 115-72). In the case of both of the previous supplemental requests from the Administration, Congress provided additional funding over the requested amount. It is expected that they will do the same in this instance. Congress will likely take up the supplemental after they return from the Thanksgiving recess. We will keep you posted as things move forward.