New York fund whittled down from $20b to $8b

Two days after the September 11th attack, New York Democratic senators Charles Schumer and Hillary Rodham Clinton met President…

Two days after the September 11th attack, New York Democratic senators Charles Schumer and Hillary Rodham Clinton met President Bush in the White House to plead for emergency federal aid for their stricken city.

Senator Clinton had already mentioned a figure of $20 billion on the Senate floor.

"You need 20 extra billion for New York?" asked Mr Bush of the Senators in the Oval Office.

"Yes," said Mr Schumer.

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"You've got it," said the President.

But it turns out New York hasn't got the money. Late on Tuesday night, after months of wrangling on Capitol Hill, Congress agreed to provide New York with only $8.2 billion in emergency aid to finance recovery efforts and other emergency spending in the aftermath of the September 11th attack on the World Trade Centre.

With nearly $3 billion in federal assistance already spent on rescue and recovery at Ground Zero, the package now totals $11.2 billion, a little more than half of what the President promised.

Senator Schumer called the $8.2 billion aid package just one more step.

"Every day, we make a little progress," he said. "It's like the Battle of Stalingrad. You fight house by house, but eventually you win."

Within hours of the initial request being made in the Oval Office in September it seems the White House was already backing away from the $20 billion promise. The same day, after the two New York senators departed, Mr Mitch Daniels, head of the White House Office of Budget and Management, instructed leaders of the Republican-dominated House of Representatives to appropriate much less than the $20 billion, according to the New York Times.

Republican senators, Don Nickles of Oklahoma and Phil Gramm of Texas, threw their weight against it, taking their cue from the White House.

The Battle for New York had held up passage of a far-reaching $317.5 billion defence legislation for days. The $8.2 billion was all that the Senate and House of Representatives would jointly agree to as the final deals were done. A compromise of $16.5 billion for New York was removed when the White House threatened to veto the bill.

While members of the New York congressional delegation declared a victory of sorts, they also vowed to press on for the rest of the money they believe is necessary. Both the White House and Congressional leaders promised to make up the $20 billion at some time in the future, However the case for the city has grown weaker with the passing of the time and the emergence of new priorities for federal dollars in the current state of emergency.

The $20 billion was calculated on the need for extra spending on security measures, intelligence, recovery and aid for the areas hit hardest by the attacks.

At play in the wheeling and dealing in Washington was the underlying perception in the Republican White House of New York as a Democratic holdout and a mistaken belief among some Congress members that New York already received more federal aid than it paid in taxes.

Also working against Senators Schumer and Clinton was the fact that construction could not begin in New York until after the end of the fiscal year in mid-2002.

A massive stimulus package, still not agreed but which could consume $60 billion in nationwide spending, has weakened further the prospect of New York ever receiving the full amount requested. Local New York officials have estimated that the city's losses from the attack might ultimately top $100 billion.