Two Democrats on the Senate Finance Committee who represent storm-damaged states, Schumer and Menendez, above, would allow for a full deduction of cleanup expenses and waive penalties for early withdrawals from retirement plans.
Senate Democratic appropriators are writing this week what amounts to an opening bid in negotiations that will lead to a relief package for areas damaged by superstorm Sandy.
Appropriators Mary L. Landrieu of Louisiana and Frank R. Lautenberg of New Jersey held hearings last week to be ready to produce an aid package once a White House request was in hand. On Dec. 7, the administration asked for $60.4 billion to aid the rebuilding of transit systems, boardwalks, homes, businesses and public buildings damaged by the late October storm.
An aide said Lautenberg expects a supplemental appropriations measure to be introduced this week. Senate leaders may bring the aid package to the floor next week using the House-passed fiscal 2013 Military Construction-VA spending bill (HR 5854) as a vehicle. If the Senate passes the amended bill and returns it to the House, the House can quickly call for a conference to work out a final version.
The Federal Emergency Management Agency Disaster Relief Fund has spent $2.6 billion this year and has $4.6 billion left in its account.
House Republicans will likely want to scale back whatever emerges from the Senate. Some in the GOP, including House Appropriations Chairman Harold Rogers of Kentucky, would prefer to move a smaller initial bill and then revisit the issue in the 113th Congress.
But the White House pleased many Democrats by outlining a broad response to Sandy. The administration suggested that Congress address regulations that might hinder the recovery, such as potential penalties for public housing authorities as a result of disruptions caused by the storm. The White House also requested almost $13 billion for projects intended to reduce damage and disruption by future storms.
Many of the most costly pieces of the proposal are intended to help people and businesses that took the hardest hits from Sandy. The White House requested $15 billion for the relatively flexible Community Development Block Grant program and $6.2 billion for repairs and restoration of service for public transit systems in the metropolitan New York area.
The White House also wants money for areas touched by the storm, but not in the way that New York and New Jersey were hammered. The proposal seeks $2 million to repair roofs on Smithsonian Institution buildings in Washington — including the Museum of Natural History, National Museum of American History, National Air and Space Museum and National Zoological Park — and to support buildings in the District of Columbia, Maryland and Virginia.
Two Democrats on the Senate Finance Committee who represent storm-damaged states, Charles E. Schumer of New York and Robert Menendez of New Jersey, are also looking ahead to an effort to help constituents through tax relief. They would allow for a full deduction of cleanup expenses and waive penalties for early withdrawals from retirement plans.
Some lawmakers may prefer to move a disaster relief package now and consider further appropriations and tax proposals later. That scenario would follow a pattern used in response to earlier catastrophes, including the recovery effort after Hurricane Katrina in 2005.
It remains unclear whether a Sandy recovery package will ultimately move as stand-alone legislation or as part of a larger measure. Congressional leaders might try to attach Sandy relief to a year-end bill addressing taxes and automatic spending cuts.
Dan Coats of Indiana, the top Republican on the Senate Homeland Security Appropriations Subcommittee, said last week that how Sandy recovery legislation is handled could indicate how well talks on the fiscal cliff are proceeding.
“Clearly it is up to the leadership how they want to address it, whether they want to wrap it into a final package that we deal with or do it separately,” Coats said of the aid package. “That might be a pretty good indicator of whether they think we are going to get a deal or not.”
Alan K. Ota and Geof Koss contributed to this report.