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FEMA To Demand That Hurricane Katrina Victims Return Aid Money

Dees Illustration

Michael Kunzelman and Ryan J. Foley
Associated Press

NEW ORLEANS -- Nearly six years have passed since Hurricane Katrina drowned New Orleans in misery, but many residents haven't forgiven the Federal Emergency Management Agency for its sluggish response to the storm. Now another delayed reaction by FEMA – a stop-and-start push to recoup millions of dollars in disaster aid – is reminding storm victims why they often cursed the agency's name.

As a new hurricane season begins Wednesday, FEMA is working to determine how much money it overpaid or mistakenly awarded to victims of the destructive 2005 hurricane season. The agency is reviewing more than $600 million given to roughly 154,000 victims of hurricanes Katrina, Rita and Wilma and is poised to demand that some return money.

FEMA already has sent letters to thousands of victims of other disasters, asking them to return more than $22 million. Letters to victims of the 2005 hurricanes could go out in a matter of months, but it's too soon to tell how many people will be told to repay or how much money is at stake.

The effort isn't sitting well with victims who spent the money years ago and who could need help again if another powerful storm hits. It's of little consolation that FEMA says procedural changes since 2005 mean future disaster victims aren't likely to have to deal with large recalls of cash.

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Political theater clouds US debt ceiling vote

US lawmakers Tuesday hold a certain-to-fail
vote on raising the government's borrowing limit
© AFP/File Shawn Thew

AFP

WASHINGTON (AFP) - US lawmakers Tuesday hold a certain-to-fail vote on raising the government's borrowing limit, revealing political posturing on a issue the White House warns could have "calamitous" economic consequences.

The Treasury says that unless Congress votes to raise the $14.29 trillion debt ceiling by August 2, Washington could be forced to default on its obligations, in a move that would send shockwaves through the global economy.

Opposition Republicans, who won the House of Representatives last November amid a public mood of steep anxiety over the ballooning size of government debt, will only back raising the debt limit in return for steep cuts in the deficit.

US deficit up 15.7% in first half of fiscal 2011

US deficit up 15.7 % in the first 6 months of fiscal 2011
US Treasury Building © AFP/File Karen Bleier

AFP

WASHINGTON (AFP) - The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011, the Treasury Department said Wednesday as political knives were being sharpened for a new budget battle.

The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace.

The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.

IMF urges US to address debt now

Debt clock/Wikimedia image

AFP

WASHINGTON (AFP) - The International Monetary Fund on Monday urged the US to begin addressing its yawning budget deficit this year rather than putting off the pain and missing G20 fiscal targets.

In its semi-annual measure of global economic health, the IMF said the US will likely grow more slowly than originally forecast in January -- 2.75 percent instead of 3.0 percent.

It said that slack domestic demand, high unemployment and still-depressed housing prices will continue to dog the world's largest economy, and that the huge government deficit will limit its ability to address those problems.

White House warns of debt 'Armageddon'

The White House warned Republicans of
"Armageddon-like" debt consequences
© AFP Mandel Ngan

AFP

WASHINGTON (AFP) - The White House warned Republicans on Monday that failing to raise the $14.29 trillion US debt limit would spark "Armageddon-like" consequences for the slowly recovering US economy.

As a new political showdown looms over the economy following a defused budget row, aides also said President Barack Obama now "regrets" his vote as a senator against raising the debt ceiling in 2006, calling it "a mistake."

"The consequences ... of failure to raise the debt ceiling would be Armageddon-like in terms of the economy," said White House spokesman Jay Carney.