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BCA and Disaster Relief

Director Lew discusses disaster relief funding and the Budget Control Act.

America has a long tradition of providing for our neighbors as they recover and rebuild in the wake of a major natural disaster. Many of us experienced Hurricane Irene, and all of us have seen the pictures of the devastation the ensuing flooding has brought communities in the Northeast. Disaster relief funding is being delivered in real time to meet pressing needs, and the Administration is committed to providing for communities impacted by this natural disaster.

There is no way to predict in advance precisely what the cost of disaster relief will be in any given year. That is why in the bipartisan Budget Control Act (BCA) passed last month there was included a provision to account for disaster relief spending by allowing the cap in discretionary spending to be adjusted to accommodate disaster relief needs. For purposes of fiscal year 2012, Congress allowed for the discretionary cap total to be raised by no more than the average funding provided for disaster relief over the previous 10 years, excluding the highest and lowest years. 

Today, OMB, consistent with the BCA’s requirements, sent to Congress a report that determines the ceiling for disaster relief spending next year and discusses the potential amount that will actually be needed.

The average funding provided for disaster relief over the previous 10 years (excluding the highest and lowest years) is $11.3 billion for FY 2012. The amount represents a ceiling on the potential disaster adjustment for that year; of course, the actual level of the adjustment will be made through the fiscal year 2012 appropriations process. The Administration assessed what is required to properly fund the Disaster Relief Fund and known disaster relief needs as identified under existing law including enduring costs from previous disasters such as Hurricane Katrina which hit in 2005 and the tornadoes that struck Missouri earlier this year. This analysis supports a disaster relief adjustment of $5.2 billion for FY 2012.

To be clear, this amount does not account for the devastation Hurricane Irene has inflicted on communities up and down the eastern part of the country. At this writing, rescue efforts are still underway and floodwaters are, in some areas, still rising. With four major disasters already declared, we know that the costs of this storm will be significant. We are working closely with the Federal Emergency Management Agency and the Department of Homeland Security to determine if additional resources for FY 2011 will be necessary.

There is no question, however, that for FY 2012 additional funds will be required to assist the thousands of Americans affected by Hurricane Irene, on top of the $5.2 billion identified under current law to properly fund known disaster needs. As we gather data about the extent of damage and need caused by Hurricane Irene, the Administration promptly will determine that amount and provide it as soon as possible to Congress during its appropriations process.

Providing disaster relief to our fellow Americans is a commitment that crosses all boundaries of geography and political party. The Administration looks forward to working with Congress to continue this long tradition of providing for our neighbors as they recover and rebuild their homes and communities.

Jack Lew is the Director of the Office of Management and Budget.