Republicans and Democrats seek a deal on FEMA spending

A soldier walks past a Federal Emergency Management Agency (FEMA) truck in Prattsville, N.Y., after flooding caused by Hurricane Irene destroyed the town.

Steve Chiotakis: There's an October 1st deadline for a new federal budget. And here's a surprise: Republicans and Democrats are at an impasse over funding. This time the issue that threatens to shut down the government is disaster aid for the Federal Emergency Management Agency, FEMA.

Here's Marketplace Washington bureau chief John Dimsdale.


John Dimsdale: FEMA's disaster fund is running out of money. Senators have approved $7 billion to replenish the federal disaster relief fund. But Republicans say the government should be scaling back its response to storms, droughts and earthquakes. They say $3.5 billion is plenty, and it should be paid for -- not borrowed, like most emergency spending in the past.

The parties are trying to reach agreement on a budget to keep the government in business for seven weeks, which means more budget brinksmanship to come. Budget analyst Stanley Collender with Qorvis Communications says before the November 2012 election, Republicans will insist on approving only short-term spending plans.

Stanley Collender: Could be the Republicans are going to just fund the government one month at a time so they continue to have leverage with these shutdown opportunities. It's going to be a very ugly year.

Economists say any interruption of government spending could tip the economy back into recession. Collender says expect the next budget impasse right around Thanksgiving.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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