Louisiana lobbies for waivers, additional flood recovery money as Congress prepares next hurricane aid package
WASHINGTON — With lawmakers on Capitol Hill gearing up for negotiations on a potentially massive disaster relief package for victims of this year’s hurricanes and wildfires, closed-door lobbying by the Louisiana delegation over unfinished business from the 2016 floods is also heating up.
The package, expected to come together sometime before mid-December, will likely direct billions in federal grant funding for areas ravaged by Hurricanes Harvey, Irma and Maria. President Donald Trump has also indicated he’d like Congress to include dollars for victims of deadly wildfires in California.
The bill also offers a potential opportunity to push through waivers to federal regulations for Louisiana, including changes to a current rule that puts major limitations on federal recovery grants for flood victims who applied for Small Business Administration loans, according to a number of state and federal officials and other congressional sources.
But additional resources to fuel Louisiana’s recovery will require potentially tricky political negotiations in Congress and with the White House, as well as a consensus about how to move forward between the state's Democratic governor and mostly Republican congressional delegation.
The state received no waivers or additional funding from two other emergency disaster relief packages passed since Harvey hit the Houston area, one of which earmarked billions in federal aid for 2017 (but not 2016) disasters.
A provision offering tax relief to hurricane victims — something Louisiana’s delegation has been requesting since last year’s floods — likewise left out flood victims.
Several members of Congress, as well as state officials and Capitol Hill staffers, expressed optimism this week that the looming disaster recovery package might be different. But just what to expect for Louisiana in the package remains unclear.
The Louisiana congressional delegation is scheduled to meet with House Speaker Paul Ryan, R-Wisconsin, on Tuesday to discuss the state’s requests, said U.S. Rep. Garret Graves, R-Baton Rouge.
Graves added that he and others in the delegation have met extensively with the chairs of the relevant congressional committees and have also sat down with members of the larger Texas and Florida delegations in an effort to build political coalitions around disaster recovery issues.
If it comes to an all-out political fight, Louisiana brings far less firepower to Congress than either of those states. Florida and Texas boast a combined 67 members of Congress, including several with considerable clout and seniority. U.S. Sen. John Cornyn, R-Texas, the No. 2 Republican in the Senate, has been blocking a confirmation vote for a top Trump administration nominee in an effort to ensure requests for Hurricane Harvey recovery money are filled.
Louisiana, which comparatively is represented by six congressmen and two senators, wields significantly less clout in numbers, Graves acknowledged.
With the exception of House Majority Whip Steve Scalise, R-Jefferson, the state’s delegation has relatively little seniority — especially in the Senate, where U.S. Sens. Bill Cassidy and John Kennedy are both in their first terms — and has no members on the House Appropriations Committee, which holds significant sway over spending bills. Kennedy is on the Senate Appropriations Committee.
Scalise has expressed support for past discussions of additional funding and waivers for Louisiana. A spokeswoman for Scalise didn’t directly respond to questions about current negotiations or whether those items are likely to be included in the package.
“The Trump administration has indicated that FEMA and other federal agencies involved in response and recovery efforts will need additional resources to ensure recovery from this year’s devastating hurricanes,” said Lauren Fine, Scalise’s press secretary, “and as a member who is all too familiar with hurricane recovery, Rep. Scalise is committed to working with President Trump and Congress on those funding requests.”
Gov. John Bel Edwards is requesting a range of waivers to federal regulations he blames in part for slowing down the recovery process and wasting money.
Among the top issues on the list is a federal regulation that effectively penalizes homeowners who were approved for SBA loans — about 10,000 Louisiana flood victims. Those homeowners largely have been cut out of eligibility for the Restore Louisiana program, paid for with federal dollars, that people can tap to help rebuild their flood damaged house. Current federal law prohibits a "duplication of benefits," which means the loan amount would be deducted from any grant.
On the table are a number of different proposals. One idea would be to only count the actual amount of loans that homeowners received, as many took out less than they were approved to get by the federal agency. Right now, that full SBA eligibility amount would be deducted from any Restore grant. Another broader concept is just to forgive all the SBA loans, converting the loans into grants or allow SBA recipients to pay off their loans with Restore grants.
Edwards and the state’s congressional delegation have pressed the Trump administration for months to revise the rule administratively but to no avail. Months of lobbying with the U.S. Department of Housing and Urban Development — including face-to-face meetings with Secretary Ben Carson — have yielded no progress. Graves said he’s now drafted an amendment that would change the law and allow homeowners who’d been approved for SBA loans to receive Restore Louisiana grants.
The governor’s office is also seeking about $2 billion in additional federal flood-recovery money — including $1.3 billion more for the homeowner assistance program — on top of the $1.65 billion Congress has already sent to the state in two previous bills.
Kennedy and Cassidy co-wrote a letter to White House budget director Mick Mulvaney in April that also highlighted the $2 billion in “unmet Louisiana recovery needs” and asked for similar policy waivers.
Richard Carbo, the governor’s deputy chief of staff, said resolving the SBA issue would create roughly $1 billion in additional flood-recovery funding needs as grant checks are cut to previously ineligible homeowners. Still, Carbo said clearing up policy issues — such as the SBA duplication of benefits rule — are the top priority.
However, since the Republican senators wrote the April letter to the White House, fractures appear to be developing over requests for additional money. Kennedy blasted the governor last week when asked about the possibility of additional recovery money for the state, suggesting his colleagues in Congress won’t give the state more funds until Louisiana spends more of the cash already appropriated.
Carbo in turn said Kennedy hasn't responded to multiple letters from the governor's office seeking help addressing various federal regulations that state officials say have hindered flood recovery efforts.
The state had previously sought an exception to federal rules requiring every structure being rebuilt with Restore Louisiana grant money receive an environmental review. Instead, Edwards had sought permission to evaluate whole neighborhoods at once, something Carbo said would've saved $80 million.
Graves on Friday said a “major obstacle” to securing additional funding for Louisiana “is the fact that there’s as much money left in the bank as there is.” He joined Kennedy in criticizing the pace of flood victims getting the Restore grants.
The Edwards administration could've moved quicker in the first few months after the flood to speed up the flow of cash, he said.
"I think there were some missed opportunities early on that slowed things down," Graves said. "It’s really heartbreaking to see the amount of money that’s sitting in the bank right now and the conditions people are living under right now."
As of Friday, the Restore Louisiana program had distributed $67.5 million to 2,253 homeowners. About 113,000 homes were damaged in Louisiana's March and August floods last year, while around 45,000 owners have submitted the survey to participate in the program.
Carbo said the state didn’t receive federal approval to begin sending out checks until April 10 and noted that the first grants headed out more quickly than after previous disasters.
Paul Rainwater, a consultant with extensive disaster-recovery experience who helped set up the state’s flood-recovery program, said rebuilding efforts after major natural disasters always churn slowly and that the speed of Louisiana’s program for 2016 flood victims stacks up well against efforts after other storms such as Hurricanes Katrina, Rita, Sandy and Ike.
“I’ve been involved in every program since Katrina. From that perspective, historically, it’s been a very fast-moving program,” Rainwater said. “There are so many federal hurdles in the way of spending the money.”
Rainwater, who ran the Louisiana Recovery Authority after Katrina before serving as chief of staff to former Gov. Bobby Jindal, said the delegation and the governor have largely been “moving in lockstep” in pushing for waivers and additional funding for Louisiana — but have run into resistance from some on Capitol Hill who’ve raised questions about the state’s unspent money.
Those questioning how much money remains in the bank, Rainwater said, have "a complete misunderstanding" of how federally funded recovery programs work.
Former U.S. Sen. Mary Landrieu, a New Orleans Democrat who is now lobbying for hurricane recovery money on behalf of the city of Houston, said the looming disaster appropriations bill will be "very important" for recovery in Texas and Florida.
Landrieu, who as a senator worked to secure recovery money for Louisiana after Hurricane Katrina, said she hoped Congress would consider additional bills over the coming months and years to continue funding disaster recovery efforts.
But the current climate in Washington had Landrieu wondering whether there would be long-term political interest in repeated disaster-relief packages.
"There should be more help. But whether there is or not depends on leadership and politics," Landrieu said. "I just don’t know what the capacity of this Congress and this (presidential) administration is."
Editor's note: This story was changed after publication to correct the context for the statement of House Majority White Steve Scalise's spokeswoman.