On Monday, the Senate cleared a $50.5 Billion relief package to aid the clean up and recovery from SuperStorm Sandy. The bill now goes to President Obama, who has said he will sign the measure. Including the $10 Billion in increased FEMA borrowing authority passed earlier this month, the total federal commitment to Sandy relief edges just over $60 Billion so far. Unfortunately, there are no details for how a large chunk of the money will be spent.
Conservatives have been swift to criticize unrelated spending tacked onto the Sandy appropriation. The bill includes money for fisheries damaged by storms in recent years in other parts of the country. The bill even contains money for the Smithsonian Institute to repair roofs. These provisions obviously have no place in a bill providing relief for Sandy, but the total amount of funding is relatively small.
Far more worrisome is that a large chunk of overall spending, $16 Billion, is to be distributed by HUD through the Community Development Block Grant program. This program provides extraordinarily flexible funding to state and local governments to pursue affordable housing, anti-poverty and other initiatives. A report from GAO found that HUD lacked measures to provide proper oversight on how the funds are spent.
The White House has been vague about how the $16 Billion will be allocated. After numerous requests, HUD recently released a statement saying it was still determining how the funds would be distributed.
HUD is still working through the estimates of unmet need in order to determine how best to allocate CDBG funding. While it’s premature to speculate on what those levels may be, our guiding principle will be to ensure communities have the resources they need to recover. The Task Force continues to work with local partners to determine the most appropriate path forward to ensure limited resources are used most effectively.
One worrying detail is that the funds aren't limited to areas affected by SuperStorm Sandy. The legislation allows HUD to spend the funds in any area affected by natural disasters in the past few years. Given that the $16 Billion appropriated far exceeds the amount of "unmet needs" HUD has identified, it is likely a great deal of funding will be spread across the country.
Moreover, it appears that state and local governments will be able to use HUD funds to meet cost-share requirements to tap other federal funding. Many federal programs require state and local governments to put up some of their own money when applying for federal assistance. Under this package, it seems they can use the federal government's own money to obtain even more federal funding.
When the outrage over funding for Alaskan fisheries dies down, HUD will still be sitting on $16 Billion slush fund with little oversight on how it will spend the funds. Congressional leaders must use their oversight powers to monitor closely how HUD distributes this money.
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