Disaster Recovery Projects in Limbo Despite Senate Budget Deal

FEMA's disaster-relief funding problems will not go away any time soon despite a last-minute budget deal struck in the Senate this week, leaving thousands of residents in neighborhoods across the nation wondering how they will rebuild following a torrent of recent natural disasters.

Without more funding, thousands of long-term recovery projects -- put on hold in August while the Federal Emergency Management Agency shifted resources to cover newer and immediate disaster responses -- could return to the backlog list before the end of the year.

As a result, communities hard-hit by floods, tornadoes, hurricanes and other disasters may be left on their own while Congress works out its budget kinks.

In North Dakota's Ward County, residents still are dealing with badly damaged roads in the wake of epic flooding in June. Some of those projects were put on hold last month as FEMA's reserves dwindled to near-empty.

"We still have roads that have eight feet of water on them," said Amanda Schooling, director of the county's Emergency Management Department.

Schooling said every single township in Ward County is dealing with damages after record snowfall resulted in extensive flooding, something that's happened several years in a row. Without the money to tackle repairs, many local communities are waiting on help from FEMA to get to work fixing the roads. Until then, Schooling said people can't get to their homes and farmers can't get to their fields

"They can't get their tractors to go and harvest. ... Economically, it is a huge impact in this area," she said.

The Obama administration and some lawmakers continue to push for more funding beyond the $2.65 billion for FEMA's disaster fund contained in the Senate-passed bill. An official in the White House budget office said the Obama administration estimates another $5.1 billion is needed for the next fiscal year, which begins Oct. 1, in order to take care of disaster response and the rebuilding that happens after the short-term danger to communities passes.

"What this means, obviously, is they're going to run out of money," said an aide with Sen. Mary Landrieu, D-La., who chairs the Senate appropriations subcommittee that covers FEMA.

The aide told FoxNews.com that FEMA projects current funding for longer-term repairs will last until "around Christmas," presuming the House approves the stopgap Senate budget bill passed Monday.

With FEMA apparently cobbling together enough money to last until the stopgap kicks in Oct. 1, the budget deal would give the agency the funding to resume $450 million worth of projects that were put on hold in August when FEMA diverted and re-prioritized funding to make sure "immediate needs" like individual assistance for victims were met first.

For the time being, projects like those in North Dakota could temporarily be given the green light. But the Landrieu aide said "it's conceivable" FEMA would have to put lower-priority projects back on the backlog list come November without additional funding. That's because FEMA takes emergency precautions and starts putting projects on hold well before its account hits zero.

The types of projects that are backlogged are generally infrastructure-related -- repairs to roads, schools, city buildings and other structures that may have been damaged in natural disasters.

In tornado-stricken Joplin, Mo., Assistant City Manager Sam Anselm said his city should be able to get by regardless of whether FEMA starts putting projects on hold. Anselm said Joplin has been able to marshal federal resources to fix structures like fire stations, but isn't close to being ready to tackle the kinds of projects that could be backlogged.

But in New York's Tioga County, resident John Schumacher said the municipalities are going to have to get to work repairing roads the best they can after this month's flooding, in the hope the federal government will reimburse some of it in the future.

"The municipalities are basically running on empty on their budget as well, but you have to do it," said Schumacher, a former councilman and current judge in the town of Owego.

The on-again, off-again backlog isn't the only disaster-relief problem residents are dealing with. More immediately, Schumacher said residents who lost their homes have found themselves in a bind. He said FEMA was prompt in issuing them checks worth up to about $30,000 after the floods, but that they're only able to use the checks toward repairs -- not toward their mortgages.

A separate buy-out process could take years.

"The houses are gone. They're not worth repairing," he said. "It's a nightmare."

If these were boom years, FEMA's funding situation might be easily solvable. But going forward, the president's request for additional FEMA funding will have to be weighed against everything else in a climate of fiscal restraint.

In a letter to House Democratic Leader Nancy Pelosi on Tuesday, White House Budget Director Jacob Lew  wrote that while FEMA's funding should provide "adequate resources" for the next six weeks, Congress should "turn its attention to providing stable and robust disaster relief funding" for fiscal 2012.

"We regret that vital reconstruction projects across the country have been delayed because of constraints on the fund over the past month, and firmly believe the American people deserve the security of knowing their disaster relief needs will be met in a time of crisis," Lew wrote.

In the wake of the Senate vote, Republicans suggested FEMA could have had more short-term money if Democrats hadn't resisted spending cuts elsewhere.

The House and Senate clashed most recently because Republicans wanted to offset the emergency funding the president requested for the remainder of fiscal 2011. The GOP proposal would have taken some of that money from a loan program that supported now-bankrupt solar firm Solyndra. Senate Majority Leader Harry Reid refused to do that. Rather than support a bill that included partial offsets, he reduced the total amount by $1 billion, with no offsets.

Cantor spokesman Brad Dayspring alleged that Reid and Senate Democrats "would now rather reduce funding for disaster aid by $1 billion rather than reduce corporate subsidies for companies like Solyndra. It's regrettable that the priorities of Senate Democrats are so backward, and it has left very few options."

Fox Business Network's Peter Barnes contributed to this report.