Congress weighs federal funds for Gulf cleanup

Federal funding could be needed to clean up the oil spill in the Gulf of Mexico as well as to help the region's devastated fisheries and blunt the effects on the economy, leading lawmakers and Democratic aides said Tuesday. And one vehicle for such funds could be the upcoming supplemental funding bill for military operations in Iraq and Afghanistan.

BP PLC has said it would pay for cleanup costs, but Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, said he thinks the cost to clean up the spill could exceed the firm's ability to pay, a scenario which could require federal funds.

"BP says they are going to pay for it, but I doubt that they can cover that," Inouye said.

The cost of the cleanup is still being assessed, Adm. Thad Allen, the Coast Guard commandant and now National Incident Commander of the Gulf Coast oil spill, said after briefing lawmakers Tuesday.

"We are still putting estimates together," Allen said, adding, "we will have access to the resources we need."

One resource is the Oil Spill Liability Trust Fund, which is supported by industry fees. But that only contains $1.6 billion, which will likely not be enough to cover expected costs. Also, under current law, there is a $1 billion cap per incident on claims against the fund. Current law also limits BP's liabilities to $75 million.

Sen. Robert Menendez, D-N.J., is pushing legislation to lift the liabilities limit to $10 billion, eliminate the $1 billion per-incident cap and give community responders access to the fund immediately instead of making them wait to be reimbursed. Also under the bill, if damage claims exceed the amount in the fund, claimants could collect from future revenues with interest. It would also eliminate a $500 million cap on natural resources damages.

However, Senate Energy and Water Appropriations Subcommittee Chairman Byron Dorgan, D-N.D., said it was too soon to tell whether federal funds would be needed or not.

"It depends on the extent of the damage," Dorgan said, who added that, ultimately, he believes BP should pay the costs.

According to one Senate Democratic aide, federal funds could be needed to provide aid to fishermen and others affected economically by the spill because lawmakers would not likely wait for the lengthy court battles to settle disputes over damage to their livelihoods.

None of the lawmakers ruled out including funds, if needed, in the upcoming supplemental war appropriations bill, but they stressed that no decisions have been made.

Lawmakers are increasingly looking at the must-pass supplemental as a legislative vehicle for other programs they want funded.

House Homeland Security Appropriations Subcommittee Chairman Rep. David Price, D-N.C., said that measure could include funding for border security.

"We have had requests from members who represent border areas, as well as others to consider an enhanced Border Patrol presence and other measures on the border, both for the supplemental and for the [fiscal 2011 Homeland Security appropriations bill]. All I can say is that we are considering those," Price said. "It's in the mix with other things that we are trying to sort out."

He added, "There are things ideally we would like to do to enhance the border security. We've done a lot of things; there's more, no doubt, that we could do. We'll just have to see what the traffic will bear in terms of available resources. It's not been resolved at this moment, either for the supplemental or for the 2011 bill."

Chris Strohm contributed to this report.

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