As Shutdown Looms, $100 Billion in Disaster Relief Hangs in Balance
The White House has spent weeks pressing Congress to pass $100 billion in disaster relief to refill depleted resources and help communities plowed down by the deadly hurricanes Helene and Milton and other storms.
That money was one of the biggest parts of the funding agreement between Republicans and Democrats that fell apart Wednesday after a barrage of social media messages from Elon Musk disparaging the deal and an insistence by President-elect Donald Trump that the negotiations reopen the fraught debate over eliminating the national debt limit. The collapse is a major defeat for Republican Speaker of the House Mike Johnson, who had cobbled together a deal to avoid a government shutdown just before the Christmas holiday—only to be undercut at the last minute by the leader of his own party and the world’s richest man.
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Now lawmakers are scrambling to pull together a new agreement before Friday night at midnight, when the federal government is set to shut down all but essential functions.
If that happens, hundreds of thousands of federal workers would be furloughed, and would not be paid again until Congress agrees to a new spending deal. National Parks could be closed, and food and environmental inspections could be delayed. Social Security payments would continue to be sent and Medicare will stay in place, but many services they provide would be cut back, including offices that verify benefits and receive new applications.
By working to kill the larger deal, Musk and Trump have also left uncertain the fate of the disaster relief funds, one of the few add-ons to the spending package that has bipartisan support. Republican senators from states hit hard by hurricanes September and October, including Sen. Thom Tillis of North Carolina and Sen. Lindsey Graham of South Carolina, insist those funds need to get passed. After Trump and Musk pushed to kill the deal, Tillis’s fellow North Carolina senator, Tedd Budd, was defiant and wrote on X that there would be “no” stopgap funding bill “without disaster relief for Western North Carolina.”
The White House has piled on, working to blame Republicans for getting in the way of disaster relief and other critical spending. “Republicans need to stop playing politics with this bipartisan agreement or they will hurt hardworking Americans and create instability across the country,” White House Press Secretary Karine Jean-Pierre said in a statement Wednesday night. “President-elect Trump and Vice President-elect Vance ordered Republicans to shut down the government and they are threatening to do just that—while undermining communities recovering from disasters, farmers and ranchers, and community health centers.”
The last time the U.S. federal government shut down was during Trump’s first term. At five weeks, it was the longest shutdown in the country’s history. The Congressional Budget Office estimated that that shutdown, which ended in January 2019, caused about $3 billion in losses to the economy.
When the government shut down in 2013, the GOP’s favorable rating sank and it took the entire year to recover, says Whit Ayres, a Republican strategist and pollster. “Republicans always seem to take the hit during government shutdowns,” Ayres says. “So I’m hoping they figure out a way to keep the government open because Republicans and the incoming new administration are going to take a hit if they don’t.”
For months, the director of the White House’s Office of Management and Budget, Shalanda Young, has been pushing behind the scenes for Congress to pass a standalone disaster package. In a memo sent to lawmakers in November, Young pointed out that Congress hasn’t passed comprehensive disaster funding in two years. More funding is needed to repair communities in Florida, Georgia and North Carolina rocked in September by Hurricane Helene, the deadliest storm to hit the U.S. mainland since Hurricane Katrina in 2005. Florida was then hit with a second deadly hurricane, Hurricane Milton, in October. Money is also needed by communities to rebuild after major storms in Alaska, Connecticut, Louisiana, New Mexico, Virginia, Pennsylvania and Illinois.
Of the $100 billion in disaster funds requested, about $29 billion was to replenish the Federal Emergency Management Agency’s main disaster relief fund that helps with the immediate recovery efforts like removing debris, repairing damaged roads and power lines and delivering financial assistance to people put out of their homes by natural disasters. Another tranche, about $21 billion, was intended for farmers struggling with loss of their crops and livestock after storms. The rest of the funds were set for highway and bridge repair, housing block grants to help communities recover, and low-interest loans for small businesses struggling to rebuild. Without Congressional action, the Small Business Administration will soon run out of money in its disaster loan program. That could have ripple effects on the job market if some small businesses in communities ravaged by recent storms can’t remain open.
When the effort to get a separate bill passed failed, lawmakers agreed to add the disaster funding into the doomed compromise bill that would have kept government spending largely level for federal agencies into March, when Trump will be in office and Republicans will have slim majorities in the House and Senate.