Two days after the 9/11 attacks, New York Sens. Hillary Clinton and Charles Schumer, both Democrats, consulted with Giuliani and Pataki on how much they should ask for in federal aid. They came up with the round figure of $20 billion. Meeting that afternoon in the White House, Schumer, as he has told the story, expected Bush to counter with an offer of $5 billion. Instead the president never flinched at the $20 billion request and told the New York delegation, "You got it." (The final figure was closer to $21 billion.)

Two years later though, the disaster-relief money has been slow to flow. "I didn't realize how difficult it would be to get money released from Washington," says Rep. Carolyn Maloney, D-N.Y.

"You'd think with a Republican governor of New York and a Republican mayor, it would have helped greased the skids, but it has not," adds Weiner, who suspects politics is behind the White House's lackluster response. "Because [political advisor] Karl Rove made the correct assessment that Bush isn't going to win New York, so why waste the capital?"

To date, approximately $5.5 billion has gone to the city and its entities, according to Adam Blumenthal, the city's first deputy controller. "Most of that has been for reimbursement for direct expenses in cleanup and some support for residents, as well as small and midsize businesses."

Meanwhile, $11.5 billion remains in the pipeline, tied to long-term projects such as rebuilding the transportation and city infrastructure. That money will be released when various construction ventures begin.

But the controller's office warned last week that the remaining $4 billion is "at risk" and may go uncollected, in part because of how the federal aid package was crafted.

The $20 billion parcel was quickly passed by Congress in the wake of the attacks, but not before its physical form was negotiated with the White House. "At first we wanted cash," says Maloney. "But the administration negotiated Liberty Zone tax incentives."

The idea was to stabilize the economy of New York City and keep jobs in Lower Manhattan, by enticing people to return to the devastated area through tax breaks, such as a $5,000 tax credit to residents who pledge to stay in the area, and a $2,400 per year tax credit for each job created or retained. The Liberty Zone represents $5 billion of the $20 billion aid package, but comes in the form of potential tax cuts, not an infusion of cash.

The problem is that the zone was based, in part, on overly optimistic projections about the demand for commercial property downtown, says Blumenthal. He explains that developers face a deadline of December 2004 to begin selling bonds for construction projects in order to qualify for the tax incentives. As a result, nearly $4 billion may go uncollected and essentially evaporate from the city's coffers.

"We're extremely disappointed," says Blumenthal. "We're not questioning anybody's good faith. But at the end of the day there was $90 billion worth of economic damage done to the city."

Maloney is upset that small grants handed out to 9/11 victims, such as the $37,000 payment to the owner of a hair salon located inside the World Trade Center, are not tax free. She says the IRS's after-the-fact decision to tax the grants came as a surprise to New York's congressional delegation.

Maloney has written to the president, the secretary of the treasury and the speaker of the House; and she has tried, unsuccessfully, to introduce an amendment in the Republican House to get rid of what she claims is an unfair tax that has cost recipients $265 million. "I find it hypocritical for this administration to call for permanent tax cuts, yet they've finally found one tax they like -- taxing grants to victims of 9/11."

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