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Staff Contact: Russ Vought, x68581 October 6, 2004

Policy Brief............FY 2004 Hurricane Supplemental (H.R. 5212)

[By the Numbers:]{.underline}

[Background:]{.underline}

Due to Hurricanes Charley, Frances, Ivan, and Jeanne, the Administration
has now sent four supplemental requests to Congress totaling \$12.9
billion in hurricane-related disaster relief. The President has already
signed the first supplemental into law (P.L. 108-303) providing \$2
billion to the Federal Emergency Management Agency (FEMA). [H.R. 5212
encompasses the three remaining requests totaling \$10.9
billion.]{.underline}

In billions

  ----------------------------------- -----------------------------------
  September 6^th^ Request -- P.L.     \$2.0
  108-303                             

  September 14^th^ Request -- *H.R.   \$3.1
  5212*                               

  September 27^th^ Request -- *H.R.   \$7.1
  5212*                               

  October 5^th^ Request -- *H.R.      \$0.7
  5212*                               

  Total                               \$12.9 Billion
  ----------------------------------- -----------------------------------

[Funding Details of H.R. 5212:]{.underline}

In millions

+--------------+----------+----------+--------------------------------+
| **Departm    | **Presi  | *        | **Purpose**                    |
| ent/Agency** | dent's** | *House** |                                |
|              |          |          | **(As Included In the          |
|              | **Re     | **       | Request)**                     |
|              | quests** | Appropri |                                |
|              |          | ations** |                                |
+--------------+----------+----------+--------------------------------+
| USDA         | 565.0    | 565.0    | \$400 M ESTIMATED/\$130 M to   |
|              |          |          | retard runoff and prevent soil |
|              |          |          | erosion/\$35 M for clean-up at |
|              |          |          | national forests and           |
|              |          |          | restoration of fisheries       |
+--------------+----------+----------+--------------------------------+
| National     | 14.7     | 14.7     | Repair facilities/"address     |
| Oceanic and  |          |          | impacts to endangered species  |
|              |          |          | and their habitat"/upgrade     |
| Atmospheric  |          |          | hurricane forecasting          |
| Admin.       |          |          |                                |
+--------------+----------+----------+--------------------------------+
| HHS          | 50.0     | 50.0     | Public Health/Social Services  |
|              |          |          | Emergency Fund                 |
+--------------+----------+----------+--------------------------------+
| HUD          | 150.0    | 150.0    | Replace damaged homes/economic |
|              |          |          | redevelopment                  |
+--------------+----------+----------+--------------------------------+
| FEMA         | 6,500.0  | 6,500.0  | Provide shelter, food, and     |
|              |          |          | medical care/pay for public    |
|              |          |          | infrastructures (schools,      |
|              |          |          | police stations, roads)        |
+--------------+----------+----------+--------------------------------+
| Coast Guard  | 26.0     | 26.0     | Replace buoys/emergency        |
|              |          |          | evacuation expenses            |
+--------------+----------+----------+--------------------------------+
| Defense      | 1,078.1  | 1,078.1  | Evacuation/base                |
|              |          |          | recovery/damage to facilities  |
+--------------+----------+----------+--------------------------------+
| Interior     | 77.3     | 77.3     | Clean-up/repair at national    |
|              |          |          | wildlife refuges/parks         |
+--------------+----------+----------+--------------------------------+
| FAA          | 30.1     | 30.1     | Repair FAA buildings and       |
|              |          |          | control towers                 |
+--------------+----------+----------+--------------------------------+
| Federal      | 800.0    | 800.0    | Repair eligible highways in    |
| Highway      |          |          | the FHA's Emergency Relief     |
|              |          |          | Program                        |
| Ad           |          |          |                                |
| ministration |          |          |                                |
+--------------+----------+----------+--------------------------------+
| Federal      | 24.1     | 24.1     | Repair damage to federal       |
| Bureau of    |          |          | prisons and relocate inmates   |
| Prisons      |          |          |                                |
+--------------+----------+----------+--------------------------------+
| Veterans     | 124.1    | 124.1    | Repair hospitals/reimburse VA  |
| Affairs      |          |          | for local                      |
|              |          |          | assistance/overtime/repair     |
|              |          |          | national cemeteries            |
+--------------+----------+----------+--------------------------------+
| Corps of     | 245.0    | 245.0    | Restore navigational           |
| Engineer     |          |          | channels/repair coastal areas  |
+--------------+----------+----------+--------------------------------+
| EPA          | 3.0      | 3.0      | Restore buildings and          |
|              |          |          | facilities                     |
+--------------+----------+----------+--------------------------------+
| I            | 100.0    | 100.0    | International disaster and     |
| nternational |          |          | famine assistance in Grenada,  |
| Assistance   |          |          | Jamaica, Haiti, and other      |
| Programs     |          |          | nations                        |
+--------------+----------+----------+--------------------------------+
| SBA          | 929.0    | 929.0    | Cover expected number of       |
|              |          |          | disaster loans                 |
+--------------+----------+----------+--------------------------------+
| NASA         | 126.0    | 126.0    | \$89 M for repairing Kennedy   |
|              |          |          | Space Center/\$23 M for        |
|              |          |          | equipment repair/\$14 M for    |
|              |          |          | temp. workspaces               |
+--------------+----------+----------+--------------------------------+
| American Red | 70.0     | 70.0     | "Support the \[ARC\] in their  |
| Cross        |          |          | mission to shelter, feed, and  |
|              |          |          | otherwise support victims of   |
| (Private     |          |          | the recent natural disasters"  |
| Entity)      |          |          |                                |
+--------------+----------+----------+--------------------------------+
| **Total**    | **10,9   | **10,9   |                                |
|              | 12.4\*** | 12.4\*** |                                |
+--------------+----------+----------+--------------------------------+

**\***Assumes that the mandatory agriculture assistance component of the
bill (described below) is \$400 million. A CBO score is pending.

**[Budget Discussion]{.underline}:**

All of the \$10.9 billion provided by H.R. 5212 would be designated as
an emergency and thus would not be counted against the levels provided
in the budget resolution for FY04. However, once enacted, the
Congressional Budget Office is required to assume that this one-time
spending will continue and factor it into the baseline for the following
year. In the past, this increase in the baseline is then often used to
claim that spending is under control the following year, when if
emergency spending was excluded, spending actually increased
significantly.

**[Agriculture Assistance]{.underline}:**

H.R. 5212 provides "such sums as are necessary" which is an
**ESTIMATED** \$400 million in mandatory agriculture assistance to
producers experiencing crop losses [as a result of the one of the 2004
hurricanes]{.underline}. It is the same proposal included in the
President's requests. A large portion would be provided in the form of
direct payments to agriculture producers who experienced more than 35%
crop loss in expected production. The payment would be either 45 or 50%
of the market price for any loss depending upon if crop insurance was in
place or available. Producers could choose between either their 2004 or
2005 losses. Producers would be eligible for these payments even if they
had failed to purchase available crop insurance, but they would then be
required to purchase such insurance for each of the next two crop years.
[A farmer would be required to live in a county declared a disaster area
by the President]{.underline}.

These payments would be limited to \$80,000 per producer, and each
producer would be barred from receiving such payments if their income
exceeded \$2.5 million in 2003 -- unless 75% of their income stemmed
specifically from farming. Unlike other farm disaster assistance
proposals, such as the Baucus Amendment to the FY05 Homeland Security
appropriations bill (S.2537), H.R. 5212 ensures that these disaster
payments *would not exceed* 95% of a crop's worth in the absence of
hurricane destruction. (Under the Baucus amendment, a producer could
possibly *exceed* their losses on an expected crop's market worth *if*
the disaster payment is combined with any crop insurance payout and the
sale (at a higher price with lower demand) of any crops that survived.)

H.R. 5212 also earmarks \$100 million for the Emergency Watershed
Protection Program for clean-up and technical assistance and \$90
million for payments to growers of specialty crops (citrus and
vegetables).