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As Irene’s Costs Rise, FEMA’s Funds Run Dry: Who Pays for Disaster Relief?

Aaron Task
Editor in Chief
Daily Ticker

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America's national debate over the "proper" role of government has gone from political theory to stark reality in the aftermath of Hurricane Irene.

On Monday, the director of FEMA said the Federal Disaster Relief Fund has less than $800 million, meaning the agency can only pay for emergency repairs vs. rebuilding roads, schools and other damaged buildings, CNN reports.

That's bad news considering hurricane season is just getting started and we've already suffered a big one.

Hurricane Irene wasn't as bad as feared in New York City but proved to be a lot worse than expected in other areas across the eastern seaboard, from North Carolina to Vermont. At last count, at least 38 deaths have been attributed to Irene, millions of Americans remain without power or clean water and the damage estimates now stand at $12 billion, and rising. (See: Hurricane Irene Could Be Among Costliest U.S. Storms)

As Henry and I discuss in the accompanying video, natural disasters like a hurricane (or man-made ones like terrorist attacks) serve as reminders of the need for government services. The free market is great but I don't want my first responders to be driven primarily by the profit motive, do you?

"There's a federal role, yes we're going to find the money" to pay for Irene relief, House Majority Leader Eric Cantor told Fox News. But Cantor also said "we're just going to need to make sure that there are savings elsewhere to continue to do so."

Of course, somebody's got to pay for disaster relief -- and all other government services -- and there are limits to what the government can do. With the Congressional "supercommittee" set to meet to discuss budget priorities, some good could come from Hurricane Irene if our elected officials take the opportunity to have a serious discussion about what we can and can't afford, and how to pay for it.

But I wouldn't bet on it.

"Battle lines are already being drawn as Republicans insist that disaster money should be offset, Democrats contend that emergency money shouldn't be held up by partisan politics and other lawmakers move to protect their turf when it comes to potentially billions in federal disaster aid," Politico reports.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com