— The Washington Post, March 26, 2019
President Trump has been complaining about the cost of the recovery effort for Puerto Rico after Hurricane Maria. In a private meeting with Republican senators he tossed out a number — $91 billion.
The figure is significantly higher than what is known about appropriated funds for Puerto Rico. But administration officials say he has a basis for using it.
Getting a full picture on federal government spending for Puerto Rico so far is difficult because it’s spread across different agencies and spending bills. But here’s the best possible estimate we received, as of March 27, after communications with officials in different agencies.
- Federal Emergency Management Agency: $15 billion obligated ($9.9 billion in outlays)
- Army Corps of Engineers: $2.5 billion approved ($3 million in outlays)
- Community Development Block Grants-Disaster Recovery (Housing and Urban Development): $20 billion approved, of which $1.5 billion has been obligated
- Small Business Administration: $1.95 billion for homes/business loans obligated ($1.1 billion in outlays)
- Education Department: $710 million obligated ($28 million in outlays)
- FEMA community disaster loans: $294 million obligated ($128 million in outlays)
- Various other agencies: $266 million approved (lesser amounts in outlays)
That adds up to nearly $41 billion in announced funding. But notice words like “obligated” and “outlays”?
Here’s an explanation:
- Outlays = money has been delivered
- Obligated = spending has been identified but money not delivered
- Approved = A budget allocation has been made, but money has not been obligated or disbursed.
About half of the money scheduled for Puerto Rico comes from the HUD grants. But virtually none of that funding has been spent yet. HUD in July said it had approved spending $1.5 billion but the funds had not been drawn down yet, according to a Government Accountability Office report released this month. About 50 percent has been earmarked for home repair and reconstruction.
A HUD official said Puerto Rico has the $1.5 billion in hand, but has spent just $42,000. “It should take Puerto Rico approximately two to three years to spend the $1.5 billion,” the official said. “Following Superstorm Sandy, the state of New Jersey disbursed $1 billion over the course of two years.”
Another $8.2 billion of the $20 billion HUD allocation was approved in February but not yet delivered. That still leaves about half of the $20 billion untouched.
In other words, depending on how you do the math, only about a quarter of the total pot of money has actually been spent on the island — $11.2 billion.
So how does Trump come up with $91 billion?
Officials told The Fact Checker that the president was referring to an internal Office of Management and Budget estimate of the potential liabilities over the life of the disaster that would need to be committed under the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988. The estimate was described as a high-end estimate subject to change year by year.
Currently, the estimated Stafford liabilities amount to $50 billion. Adding the $41 billion in announced funding to the $50 billion in Stafford liabilities gets you to $91 billion.
Notice that we said the additional $50 billion was “over the life of a disaster.” That means it’s a long-term figure, beyond the traditional 10-year budget horizon. Indeed, one congressional aide estimated that Stafford payments will continue for 20 years in Puerto Rico. The government is still paying for the damage from Hurricane Katrina almost 14 years after it struck New Orleans.
Texas has been allocated $25 billion, but its estimated Stafford liabilities are much smaller -- just $4 billion, according to the OMB estimate. Together, that adds up to $29 billion.
What apparently caught Trump’s attention was the relative scale — with the estimated long-term cost of Puerto Rican repairs potentially three times larger than the cost of Hurricane Harvey in Texas.
The Pinocchio Test
Without a direct, verified quote, we cannot evaluate the accuracy of the president’s statement. His remarks were interpreted by senators as money already committed or spent. But administration officials said he was talking about future liabilities, especially in relative terms to other recent disasters.
The president sometimes speaks about future spending as if it’s already taken place. But if he’s comparing various Stafford estimates, it could be reasonable to use 20-year figures as long as he indicated that this did not reflect current obligations.
But at least now the mystery is solved about the source of the $91 billion number.
Update: On March 28, Trump put it this way in remarks to reporters: “We have $91 billion going to Puerto Rico. We have $29 billion to Texas and $12 billion to Florida for the hurricanes.” He did not indicate that he was talking about long-term, 20-year estimates.
Update, April 2: In a tweet, the president claimed “Puerto Rico got 91 Billion Dollars.” That’s simply false. As explained above, this is a 20-year estimate subject to change. The island so far has only received about $11 billion.
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