The question of when governments should give money to disaster victims, and how much, is a complicated one.
The only clear conclusion one can make is that the September 11 Victims Compensation Fund set up by Congress is a bad way to do it. However, the controversy surrounding this program might prompt us to devise more effective means of caring for survivors generally.
That federal initiative, which will pay from $250,000 to nearly $4 million to survivors of each victim, has encountered a blizzard of criticism since the rules were disclosed last month.
Some victims were widely quoted as saying that the payments were much too small. Others see injustice in the provision that deducts private life insurance proceeds from the payments, arguing that it punishes past prudent action and rewards risk-taking.
Still others object to the structuring of payments along traditional tort-liability lines of lost income. Families of bond traders will get millions, while those left behind by food service workers may get only tens of thousands. A life is a life, such critics argue, and those of humble station in life should be given no less than the already wealthy.
Finally, the contrast with earlier terror victims is pretty stark. There weren’t federal payments to survivors of the Oklahoma City Federal building bombing nor to those killed in the skies over Lockerbie, Scotland nor to those who were harmed by the car bomb attack on the World Trade Center.
So when should government pay money to survivors?
One straightforward case is when government action directly causes death. This happens when military and public safety personnel are killed in the line of duty.
Historically, this involved giving some pension to surviving spouses or children. During World War II, the U.S. government instituted group life insurance payments of $10,00 to the families of any military killed. This did not extend to civilians, including the merchant marine sailors who risked their lives on North Atlantic convoys.
Payments might be warranted when government omission or error causes damages. Interestingly, until very recently, most government entities were immune from regular lawsuits for damages under the doctrine of sovereign immunity.
In Minnesota, people killed or injured when city utility crews broke a gas line or when police cars ran red lights and broadsided innocent drivers had little legal recourse. When not granting complete immunity, most states capped the liability of government bodies.
Historically, governments have given aid when the magnitude of a disaster overwhelms the capacity of charity. If a single farm place is leveled by a tornado, there is little assistance. Local neighbors, churches and welfare agencies are expected to meet any needs.
But when a whole town is leveled and the president declares a disaster area, the Federal Emergency Management Agency and other government bodies step in with funds.
In the past this was done on an ad hoc basis, sometimes with extreme levels of arbitrariness. Now the process is somewhat more standardized, but inequities still occur.
U.S. governments haven’t compensated crime victims for their losses. Now several states have victim compensation programs, but the payments tend to be small, certainly not on the scale of the September 11 fund settlements.
Many skeptics now wonder why children of people killed by foreign terrorists get large settlements get large settlements while the sons and daughters of women killed in domestic violence get little beyond country welfare programs.
One might also argue that governments should act in cases where private liabilities are large but uncertain, and quick resolution may prevent the waste of large resources in protracted litigation. Indeed, this was one justification put forward for the September 11 fund. Anyone accepting payments from the fund must agree to forego litigation.
It seems clear, however, that in contemporary America, there is no way to avoid litigation, and any reduction achieved along these lines by the fund is yet unclear.
The nation might benefit from this whole muddle if we step back and examine this basic question: What should government do to protect individuals and families from the inevitable tragedies of life.
We instituted Social Security just for this reason. The purpose of the “survivors” component was to ensure that surviving spouses and children would have at least minimal income regardless of whether the breadwinner died of injury or illness. We expected that prudent households would take additional measures, through savings or insurance, to go beyond this bare minimum.
Our society clearly isn’t willing to abandon its infatuation with liability suits. But we would be better off if the federal government concentrated its resources on strengthening broad-based protections for all families rather than picking and choosing specific ones to receive multi-million dollar payments while others, equally needy or deserving, get nothing.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.