Sandy-related storm damage will cost the U.S. government a pretty penny, but the real trouble could come early next year if a federal deficit-reduction plan cannot be reached. That would kick in drastic across-the-board budget cuts, also known as sequestration, and result in the Federal Emergency Management Agency losing $878 million, largely from programs that provide direct relief to disaster victims. From the Washington Post:
Even if the sequester doesn't take effect, federal disaster relief already faces new funding limits. Under last year's Budget Control Act, lawmakers agreed to $917 billion in cuts over 10 years that would occur regardless of what happened with the supercommittee and the sequester. The cuts began in October 2011, and they're happening through new spending caps on both security and non-security spending.
Think Republicans in Congress will be willing to make an exception for California quake victims? I wouldn't bet the house on it. If Romney is elected. the prospects might be even worse. From ABC News:
Should FEMA be reformed to put a stronger emphasis on the states and less of an emphasis on federal aid? "Absolutely," said Mitt Romney during a June 13, 2011, GOP primary debate. As a general rule, Romney added, it would be even better if the private sector could step in. He seemed to indicate that continued spending on disaster relief was "jeopardizing the future of our kids."
Paul Ryan's budget proposal, which passed the House but not the Senate, envisioned a 41 percent cut next year for the section of the federal government that includes FEMA. In addition, Ryan's committee specifically pointed out that President Obama has declared a record number of disasters during his term.