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Hurricane Sandy, Government Machinations, and Congressional Finances: One Year Later

What a year it has been since Hurricane Sandy hit the US on October 28-30, 2012. The size and scope of Superstorm Sandy is a perfect analogy of the the fiscal ineptitude that has churned up in Congress over the last year.

Nearly three months after the Hurricane, the Sandy Relief bill was passed. It almost didn’t make it in Congress at all, having been caught up in the “Fiscal Cliff” crisis of January 1, 2013. No one denied that those citizens who were affected by the catastrophic and legendary storm deserved help. However, the bill was mired down by pork and Congressional dysfunction.

Only three weeks after the fiscal cliff deal that raised taxes on the highest income earners, Congress managed to figure out how to fritter away a year’s worth of that revenue that was raised (after many months of wrangling and negotiations, mind you). By raising the tax rates on the wealthiest citizens, which was a longtime objective of Obama’s, here was finally something tangible to soak the rich so the the rich could “pay their fair share” This, we were told, was absolutely necessary to raise revenue because of our deficit. The tax increase was to provide the government with $600 Billion in revenue over ten years (roughly $60 billion each year).

But when Congress finally got its hands on Sandy Relief, a bill with good intentions, they created a half-pork barrel spending/half-relief spending measure. Once the Mulvaney amendment failed, a $17 billion Hurricane Sandy relief bill with a 1.63 percent cut to discretionary programs, the final version of Sandy Relief metastasized into the monstrosity passed. It was spending spree bill that was not offset by equal and opposite cuts. It fully added $50.5 Billion dollars to the deficit — three weeks after the tax hike on the rich for the purpose of deficit reduction.

The stinging part of the Sandy Relief Bill was that it wasn’t all hurricane relief. Also included were items such as $10 million for FBI salaries, $2 billion for road construction across the country, as well as funding for the Head Start program and roof repairs at the Smithsonian. Such items did not belong in the Sandy Relief Bill. Only about a third was actually for relief: $17 billion was for aid, while another $33 billion was for “other”

This has nothing to do with whether the non-Sandy provisions of the bill were worthwhile or not. But there is no reason why those extra provisions shouldn’t be dealt with on the same playing field as all the other potentially important uses of our federal tax dollars. Why did these particular spending measure bypass the intense oversight and scrutiny that every expenditure in the budget requires of our legislators so that we don’t overspend our revenue? Herein lies a neverending problem.

At the end of the day, the tax hike on the rich was almost entirely wiped out by the Sandy Bill. By voting up the $50.5 Billion in “aid” that was crafted, (and if you combine that amount with the $9 billion for the National Flood Insurance Program also approved in January 2013), Congress spent the entire sum of a year’s worth of revenue from the rich’s “fair share” — with most of it going to fund more government instead of reducing the deficit — in one fell swoop.

Here we are a year later. The AP reported this week citizens impacted by Sandy have had a lot of waiting to do with very little to show for it in New York City. “Because the federal government has only released the first tranche — about $700 million — of the roughly $60 billion package of storm recovery aid approved by Congress, city officials say they still don’t know how much money they’ll be able to distribute to storm victims”.

And more: “About 24,000 families have signed up for the city’s Build-It-Back program, which will help pay for repairs, elevate their homes and reimburse them for repairs that have already completed, among other things. But many still haven’t received any money nearly a year after the storm“.

How can this be? How is it that Congress has only released $700 million so far? The $17 billion “aid” part of the Sandy Relief bill included the following:
$5.4 billion for FEMA to provide immediate relief to families and pay for temporary housing, debris removal and crisis counseling.
$5.4 billion went to major transportation agencies in New York and New Jersey
$3.9 billion to repair damages to publicly owned hospitals, roads and utilities
$1.35 billion to the Army Corps of Engineers
$287 million for national parks
$235 million for veteran facilities
$32 million for Amtrak
$6 million to replenish and stock food banks and soup kitchens.

It is gross incompetence that supposedly only $700 million of a $50 billion aid package — 1.2% — has been released by Congress. Where are the funds? And what about the non-aid parts of the bill? The $33 billion in pork? Have those funds been distributed?

Equally disturbing is the revelation this week that the very company responsible for the disasterous Obamacare website (CGI Federal Inc.) also received funds to distribute for Sandy Relief. According to the Daily Caller, CGI “assisting the U.S. Department of Housing and Urban Development (HUD) in the distribution of $1.7 billion in relief for Hurricane Sandy”. This was verified by a memo obtained by Freedom Works. Notes of the minutes of the memo record that

Mr. Nelson presented that the State received a $1.7 billion allocation in CDBG Disaster Recovery aid from HUD to aid impacted businesses and residences. He stated that the State’s Action Plan was approved on April 26, 2013 and HTFC is currently in a phase of implementing the program. He stated that in this phase, the corporation needs to stand-up its recovery programs as soon as possible to deliver critical resources, and in order to do so, the corporation requires immediate access to consultant services to assist in policy and procedure development, training, surge capacity, and call center assistance, and stated that CGI Federal Inc. could provide such services.
Mr. Nelson stated that the corporation entered into a short term contract with CGI, Federal Inc. on a discretionary basis of $49,000 to start with these critical disaster recovery efforts, and he requested that the Board approve a contract with CGI Federal Inc., procured on an emergency basis as justified under Executive Order 63, for an amount up to $4,280,000 for a term through March 31, 2016
.

The company that charged the federal government more than $600 million to build a website that has failed miserably is the very same company that received a contract for another $4 + million through 2016 to help distribute Sandy aid, a task at which it has also failed miserably.

One year after Superstorm Sandy, we can clearly see the failings of Congress in its fiduciary responsibility.

It approved tax hikes on the wealthy under the guise of deficit reduction — $60B a year for 10 years
It approved as a relief bill nearly the same amount that was to be raised by the tax hikes — a bill that was 2/3 pork and only 1/3 relief — that increased government spending
It has only released 1.2% ($700 million) of the $50+ billion in aid
It contracted enormous sums of federal tax dollars with CGI, a company that is being paid 1) to assist with distributing nearly $2 billion in aid and 2) is the chief architect behind the Obamacare website abomination

And yet, just a few days ago, Senate Majority Leader Harry Reid gave a radio interview in which he spelled out the next phase of budget negotiation, where he once again calls for more taxes:

“The only people who feel there shouldn’t be more coming in to the federal government from the rich people are the Republicans in the Congress. “Everybody else, including the rich people, are willing to pay more. They want to pay more.”

He also went on to announce that the only way there could be some sort of Congressional “grand bargain” would be under the conditions that the Republicans would have to agree to more tax revenue:

“They have their mind set on doing nothing, nothing more on revenue, and until they get off that kick, there’s not going to be a grand bargain on — there’s not going to be a small bargain,” Reid said. “We’re just going to have to do something to work our way through sequestration.”

William Pitt the Younger sagely observed that “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.” We constantly hear how the government needs more money . After a year of particularly gross fiscal mismanagement in Congress — from Hurricane Sandy to the Fiscal Cliff to Sequestration to the government shutdown to Healthcare.gov the Democrats still have the gall to sound the call for more taxes.

The trillion dollar question then becomes: What Will Republicans Do?

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