Choosing $100,000 electric cars over disaster duding...yep that sounds like caring for the little folks

Leveraging a Hurricane

The real story behind the political theater over disaster relief.

Rahm Emanuel may have decamped to Chicago, but Democrats in Washington still won't let a good crisis go to waste. Their current gambit is to use Hurricane Irene as a pretext to prevent spending cuts to one of Washington's most notorious boondoggles.

This week the left-wing press has been attacking House Majority Leader Eric Cantor for holding disaster relief funding "hostage." A more accurate way to put this is that Senate Democrats won't approve new funding for disasters unless they get the funding they want for corporations that make electric cars.

Here's the story: In June, House Republicans passed the 2012 Homeland Security appropriations bill, which included an amendment adding $1 billion to the Disaster Relief Fund of the Federal Emergency Management Agency (FEMA). In a sensible move for taxpayers, the amendment offsets this new disaster funding by cutting spending on the Advanced Technology Vehicles Manufacturing Loan Program. This may ring a bell with readers as the funding conduit for one of Washington's adventures in crony capitalism.

In 2009, the Department of Energy announced that it would loan more than half a billion dollars through this program to a California-based company, Fisker Automotive, to make luxury electric cars. About a month after the loan package was conditionally approved, CEO Henrik Fisker and Joseph Biden appeared in the Vice President's hometown of Wilmington, Delaware to announce that Fisker would now be making some of its cars at the city's old General Motors factory.

Reuters

House Majority Leader Eric Cantor

At the event, Mr. Biden described many "long talks" he'd had with Mr. Fisker. The Vice President's office later said that Mr. Biden didn't make any direct appeals to Energy before the loan was approved, but Delaware's chief of economic development told the Journal that Mr. Biden was the state's "secret weapon, except there is nothing secret about Joe Biden."

All of this is background to say that the GOP has found the federal program that is arguably the most deserving of a cut to free up funds for disaster victims. But Senate Democrats refuse to pass the House bill and Mr. Cantor has earned their ire this week by continuing to press for cuts in corporate welfare.

Perhaps unwilling to defend the indefensible, some have taken to claiming that the Republican bill cuts cherished liberal entitlements. In an email seeking donations for an anti-Cantor advertising campaign, the group Democracy for America exalted, "We're hitting Eric Cantor hard—exposing his call to hold Hurricane Irene disaster relief hostage to more cuts in vital programs, like Medicare and Social Security—with in-district ads all next week."

In the Senate, Illinois Democrat Dick Durbin seems unwilling to accept even the idea that the government might set priorities and choose to fund disaster aid instead of other claims on the federal fisc. "If [Mr. Cantor] believes that we can nip and tuck at the rest of the federal budget and somehow take care of disasters, he's totally out of touch with reality," said Mr. Durbin.

One reason the House bill has less funding for Democratic priorities is because, even before the hurricane, Republicans had decided that the President's budget didn't have enough money for the Disaster Relief Fund. So they funded it at $850 million above the President's request. Then as they realized that the damage in places like Joplin, Missouri would put additional strain on the fund, the GOP added the amendment that provided still more disaster assistance and cut funding for Mr. Biden's beloved electric cars.

The White House hasn't asked for more funding, though White House budget director Jacob Lew wrote to lawmakers Thursday suggesting it could be well north of $5 billion. But so far Mr. Cantor is being blamed for opposing disaster relief because he has been trying to spend more than the President, and to place that above other spending priorities.

By the way, this political theater is having no impact on victims in need of help. The MSNBC gang may like to pretend that Mr. Cantor is stealing blankets from homeless flood victims, but the Washington debate is largely about funding for construction projects that may be years in the future.

Yes, FEMA has warned that its disaster fund is running low, a warning it issues almost annually. And the agency has said it won't approve new municipal construction projects until it gets more funding. But rebuilding, for example, a bridge in Vermont likely couldn't happen for months or years anyway as the locals debate designs, approve plans and conduct environmental reviews. The agency's emergency assistance—water and generators, or money for new windows or clothing—continues without interruption.

To have any hope of controlling spending, Congress has to make choices. That means having the fortitude to give up more corporate welfare to finance more urgent disaster relief.