WASHINGTON — New York and New Jersey could lose close to $3 billion in recently approved federal aid to rebuild after Hurricane Sandy if the automatic fgovernment spending cuts set to go into place on March 1 occur.
Congress recently approved $60 billion in aid for victims of Hurricane Sandy, as well as states and municipalities, all of which will be subject to what is known as sequestration cuts.
About $1 billion would be cut out of the Disaster Relief Fund administered by the Federal Emergency Management Agency, which provides direct cash to victims.
Another $1.9 billion would be slashed in funding for transportation, housing repairs and flood-proofing against future storms, said Rep. Nita Lowey (D-NY), the lead Democrat on the House Appropriations Committee.
In all, the across-the-board cuts to domestic government programs and the Department of Defense will amount to $85 billion this year if nothing is done.
“None of it right now is as important as protecting the hard-won federal funding,” Lowey said of the Sandy aid.
“It shouldn’t be nickel-and-dimed due to congressional malfunction.”
Sequestration grew out of the 2011 battle over raising the national debt ceiling.
House Republicans and President Obama instituted the cuts as a result of the two sides’ failure to come up with $1.2 trillion in cuts.
Despite the looming deadline, Democrats and Republicans remain at odds over sequestration. Republicans are calling for more spending cuts, while Democrats insist that tax increases be part of the equation.
The Sandy aid included $16 billion in Community Development Block Grants, most of which are intended to repair hundreds of thousands of homes destroyed by the storm. Another $11.4 billion was set aside to help fix the New York and New Jersey transit systems.
Another $5.4 billion is dedicated to the US Army Corps of Engineers to shore up the New York coastline against future storms.
Schumer sent a letter to FEMA Administrator Craig Fugate urging him to hire more private adjusters to handle the claims, penalize problem private insurance companies used to get out the payments and remove lax companies.