Tab for Storm Repairs Grows
By Andrew GrossmanWall Street Journal
November 27, 2012
The focus of efforts to clean up and rebuild after superstorm Sandy are moving from flood-ravaged streets to the halls of power in Washington.
New York Gov. Andrew Cuomo on Monday increased his request for federal aid to $42 billion from an earlier estimate of $30 billion, adding $12 billion for rebuilding and projects that would protect against future storms and laying the groundwork for a fight in a busy lame-duck U.S. Congress scrambling to cut spending.
Mr. Cuomo's request, laid out first in a meeting with New York's congressional delegation and later to reporters, is the most comprehensive accounting to date of the fiscal toll from a storm that killed 60 people across the state. The tally includes some strikingly large numbers, prompting the governor to say that the financial impact from Sandy was worse than that of Hurricane Katrina.
And the figures, Mr. Cuomo insisted, were conservative. "The supplemental appropriation, I believe, is going to be critical for us," he said. "This region, this state, has suffered mightily."
Included in the request is the $9.8 billion that New York City Mayor Michael Bloomberg said Monday is necessary to pay for uninsured losses, cost overruns at city agencies and parts of the cleanup effort not covered by the Federal Emergency Management Agency. Mr. Cuomo is requesting a total of $15 billion for the city.
On Friday, meanwhile, New Jersey Gov. Chris Christie said the storm caused $29.4 billion in damage to his state, but he didn't specify how much federal money he might seek.
The requests come amid a much larger battle in Washington over how to avoid a series of looming tax hikes and automatic spending cuts set to take effect in January.
As part of talks on that problem—commonly called the "fiscal cliff"—lawmakers and administration officials are looking for ways to reduce federal spending and raise revenue.
The Obama administration is weighing damage estimates before formally asking Congress to appropriate more money.
Much is riding on how much money the two governors and their congressional delegations are able to wring from Washington. New York, New Jersey and local governments face tight budgets and have few resources to cover the lost tax revenue and costs already incurred by the superstorm, let alone massive repairs to the New York City subway system, rebuilding the coastline and restoring homes.
The damage to the Metropolitan Transportation Authority's network of rails and bridges is instructive. The transit agency pegged the combined cost of Sandy's service interruption and the tab for rebuilding at more than $5 billion—about what it spends on capital projects in a year.
One-fifth of the MTA's poststorm costs cover just two devastated sections of the subway: the severely damaged South Ferry and Whitehall stations in Lower Manhattan; and the Rockaway line in Queens, which saw large sections washed away.
The MTA lost $124 million in revenue during the more than three days that service was shut down on the subways and commuter trains. The single largest anticipated expense, according to a summary of costs provided by Mr. Cuomo's office, is $770 million in repairs to subway signals—the complex networks of electronic and mechanical equipment that manage the intricate movements of trains.
"To try to finance [the recovery costs] through taxes would incapacitate this state," Mr. Cuomo said.
The fight for a spending bill aimed at Sandy repairs will pose a new test for some of the region's largest political figures. Mr. Cuomo, a Democrat, and Mr. Christie, a Republican, are both seen as possible presidential contenders in 2016. In their time in office, neither has been as reliant on the whims of Washington as they are now.
New York's senior senator, Charles Schumer, has emerged as one of the most powerful Democrats on Capitol Hill and a possible successor to Senate Majority Leader Harry Reid. And Mr. Bloomberg, while just a year away from leaving public office, has recently demonstrated that he's willing to spend some of his large fortune to take on politicians who oppose his priorities.
But perhaps the most crucial figure from New York is Rep. Peter King, a Republican from Long Island whose district was hit hard by the storm. With the city and suburbs overwhelmingly represented by Democrats, Mr. King provides a bridge to the Republican majority in the House, where antispending fervor runs hottest and the likeliest source of opposition to an aid package.
Mr. Cuomo said he would take cues from Mr. King on how best to court House Speaker John Boehner and other GOP leaders.
"I think we will have the votes," Mr. King said, while acknowledging that there would likely be some opposition. "If the speaker's on board and the administration is on board and we have the governors working together, we can get it through, and I intend to get it through."
Mr. Boehner is waiting to see how much money the Obama administration requests, a spokesman said. But Mr. King said the speaker has assured him that New York would have the resources it needs.
Still, there are a number of problems that supporters of a relief package will need to solve, such as which programs to funnel money through and how to avoid running afoul of rules prohibiting earmarks.
Already, lawmakers and their aides are pointing to the multiple spending bills passed by a Republican-controlled Congress after Katrina in 2005, hoping to appeal to their colleagues' sense of fairness. Such rhetoric appears born out of a worry that the relative dearth of Republican lawmakers from New York and New Jersey will make this year's aid package a harder sell.
"There were all kinds of questions, but we're all on the same page: supporting as much money as we can, as soon as we can," said Rep. Nita Lowey, a Westchester County Democrat who sits on the House Appropriations Committee.