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House panel votes to take back unspent 9/11 aid

By Devlin Barrett, Associated Press, 6/9/2005 15:46

WASHINGTON (AP) A House panel voted Thursday to take back some $125 million in unspent Sept. 11 aid to New York, a plan that has lawmakers from the state scrambling to hold onto those funds and $44 million more suddenly at risk.

A House Appropriations subcommittee approved on a voice vote a much larger spending bill that retrieves $125 million originally destined to handle post-Sept. 11 workers compensation claims.

Rep. James Walsh, R-Onondaga, said he was preparing to add an amendment to the bill next week that would allow New York to keep all the workers comp money in question.

After the hearing, Walsh said some lawmakers are resisting his efforts to keep the $125 million for New York, because the lean budget already shifts the money to other programs.

''Trying to take money out of that is like trying to take blood out of a rock,'' said Walsh.

''It's going to require a little finesse, a frontal attack won't work,'' he added.

Rep. Nita Lowey, D-Harrison, told members of the House panel that even though New York has yet to spend the $125 million, ground zero workers are likely to suffer ill effects for years to come from working on the toxic pile of rubble at the World Trade Center site.

''They have not gone away, they are still here,'' said Lowey.

New York lawmakers argue their state should hold onto the money, either to spend on health care for ground zero workers or to keep it in the workers compensation program against any future claims stemming from Sept. 11.

The fight over Sept. 11 aid nearly four years after the attacks stems from a relatively small share of the more than $20 billion approved for New York after the 2001 terror attacks.

As part of that emergency aid package, the government gave $175 million to the state workers compensation board, expecting the agency to be swamped with claims.

Most of the money, $125 million, has still not been spent, and such money is usually retrieved by the government.

A congressional investigation determined Tuesday that the state had mishandled some $44 million of the workers compensation money by giving it to other state agencies which made payments to Sept. 11 victims or their families.

The findings by the Government Accountability Office, the investigative arm of Congress, concluded New York must either give the money back or get Congress to pass a law retroactively allowing the expense.

A New York State official countered that if the government wants the $44 million back, they'd have to go get it themselves from Sept. 11 families.

Walsh and Lowey, who sit on the appropriations committee, found themselves in the odd position Thursday of arguing New York did nothing wrong with the $44 million by giving it to Sept. 11 victims.

''I don't think anyone had any intention to, or did in fact, do anything illegal in the distribution of these funds,'' said Walsh.

A spokesman for the Department of Labor, David James, said Thursday that New York should keep the $44 million the state has already spent.

After the attacks, the state received some 10,182 claims for workers compensation, but did not tell congressional investigators how many claims were denied, saying it did not keep such figures.

The White House estimates it has delivered some $20.8 billion in post-Sept. 11 aid. Rep. Carolyn Maloney, a critic of the administration, charges the actual amount received is about $18.5 billion.