U.S. Markets closed

FEMA Applauded for Sandy Response; Agency Funding Could See Cuts in 2013

Daily Ticker

Thousands of residents in the Northeast remain without power Wednesday morning, two days after Superstorm Sandy unleashed destructive winds and heavy rainfall on coastal communities and major metropolitan cities. Estimated damages from the storm will likely exceed $20 billion, and IHS Global Insight economist Gregory Daco projects a $25 billion cut in U.S. economic output this quarter as a result of Sandy.

The New Jersey Shore, one of the hardest hit regions along the East Coast, was largely unrecognizable to residents and vacationers Tuesday morning. Shore homeowners were kayaking on streets to get around and iconic Boardwalk amusements were either completely destroyed or sitting in the middle of the Atlantic Ocean.

Federal Emergency Management Agency (FEMA) workers have deployed resources to the storm-battered municipalities, offering thousands of ready-to-eat meals, bottles of water, blankets, generators, cots, diapers and other necessities to evacuees. A FEMA spokesperson says there are currently 2,276 FEMA personnel positioned along the East Coast working to support disaster preparedness and response operations, including search and rescue, situational awareness, communications and logistical support.

Republican New Jersey Governor Chris Christie, a supporter and campaign surrogate of Republican president nominee Mitt Romney, praised President Obama for his handling of Hurricane Sandy. "It's been very good working with the president," Christie said on MSNBC's "Morning Joe." "He and his administration have been coordinating with us. It's been wonderful. The president has been all over this and he deserves great credit." Christie also spoke effusively about the response from FEMA, saying on NBC's "Today" that it has been "excellent."

President Obama has authorized "emergency declarations" for a handful of states stretching from West Virginia to Massachusetts and the District of Columbia. FEMA Director W. Craig Fugate told reporters at a news conference Tuesday that FEMA had $3.6 billion remaining in its disaster relief fund and that he was ready to request additional money from Congress if needed. Obama fast-tracked funds to areas hardest hit by Sandy, allowing state and local governments to quickly receive billions of dollars in aid funding. According to Reuters, "FEMA has a little more than $7 billion that it could quickly access to provide relief to those impacted, and could get ahold of another $11 billion with congressional action."

On Wednesday Obama and New Jersey Governor Chris Christie are taking a helicopter tour to assess the coastline devastation.

Possible Cuts

Mitt Romney was on the defensive this week for comments he made last year about FEMA's budget. In 2011 Romney remarked that he would allow states and the private sector to take a bigger role in federal disaster response and said he supports cutting federal funding for the 33-year-old agency.

"Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction," he said in a primary debate. "And if you can go even further and send it back to the private sector, that's even better."

At a storm event for victims on Tuesday, Romney refused to answer reporters' questions about his previous comments. Campaign aides insisted Romney would not abolish FEMA if elected president. On Wednesday Romney offered this response in a statement supplied by his campaign: "I believe that FEMA plays a key role in working with states and localities to prepare for and respond to natural disasters. As president, I will ensure FEMA has the funding it needs to fulfill its mission, while directing maximum resources to the first responders who work tirelessly to help those in need, because states and localities are in the best position to get aid to the individuals and communities affected by natural disasters."

But the campaign would not affirm if a President Romney would end federal disaster aid for victims by cutting other programs in the federal budget.

Romney's running mate, Paul Ryan, has proposed deep cuts to domestic spending in his House budget, slashing non-defense discretionary spending by 22%. FEMA was not specifically cited in the Ryan budget, but falls under the category of "discretionary" cuts, as does education, infrastructure, food safety, Medicaid, food stamps and national parks. According to the Center on Budget and Policy Priorities, nearly one-third of non-defense funding is made up of grants given to state and local governments to pay for local services such as education, law enforcement, water treatment facilities and disaster response.

Ryan's campaign spokesman, Brendan Buck, told the Washington Post there were "no FEMA cuts in the House Budget."

Jared Bernstein, former economist to Vice President Joe Biden, argues in a CNN column that a centralized federal government should be the one in charge of natural disasters, not states and cities.

President Obama has also targeted FEMA in his budget proposal. FEMA's Disaster Relief Funds would be slashed by $1 billion in 2013, a 14% reduction from fiscal 2012. Overall, Obama's budget would reduce 2013 FEMA funding by $453 million to $13.5 billion, a 3% cut from 2012 levels.