How the federal government responds to natural disasters may not be the most pressing issue on the national agenda, but it is one we should address. Unfortunately, a politically shame-based overreaction to 2005’s Hurricane Katrina pushed back the issue rather than advancing it.
Now, the tempest over whether Mitt Romney really wants to “get rid of FEMA” will make broader questions of disaster response policy even more toxic. That is unfortunate because disasters will continue to occur and — sooner or later — we will face an event that will make Katrina and Sandy look minor.
Let’s get Romney’s position out of the way first. The charge that he wants to get rid of FEMA dates to a primary debate on June 13. In it, he made his standard argument that the size of the federal government should be reduced. The moderator responded by bringing up disaster relief and FEMA’s dwindling budget in the aftermath of the Joplin, Mo., tornado. Romney replied that, yes, he would not exclude this from functions that should be reduced or passed to state and local governments or the private sector.
He did not say, however, that he would try to abolish FEMA entirely or how much he wanted its budget cut.
One can easily come up with scenarios in which FEMA’s budget could be maintained at the cost of other programs. The candidate can rightly be faulted for delusional budget assumptions, but he has never called for abolishing all federal disaster relief. Yet that is all we will hear in the few remaining days of the campaign.
Moving to broader issues, consider what we did in the wake of Katrina. The Bush administration’s response was inept. Democrats were glad to appropriate billions for reconstruction, and Republicans went hand in hand. But New Orleans, however well or poorly rebuilt, remains highly vulnerable to a reprise over the longer term.
There was no real discussion of the more basic problem of the shrinking Mississippi River delta and disappearing coastal wetlands. There was no discussion of how a major city at such a low elevation will be affected by the rising sea level, whether it results from climate change or simple climate cycles.
Nor did anyone ask, “If we spend tens of billions of dollars in the aftermath of a major hurricane, shouldn’t we be spending something to reduce the scope of disaster damage in the future? If so, what spending where would have the highest expected payoff? And what measures could be taken without any federal spending per se that would reduce future damages?”
As an example, a few years ago, New York’s Con Ed power utility identified feasible physical improvements that would reduce its system’s vulnerability to flood damage. These would cost $250 million. But an immediate outlay on such a large project would require a rate hike that customers would object to and that regulators thus would be reluctant to approve. So they started to do it piecemeal at $25 million per year.
Now Con Ed will spend some multiple of $250 million to restore damage from Sandy, and the economic costs to businesses and households from days without power will increase the cost to society as a whole. There are many other situations, across the country, where relatively small investments in infrastructure resiliency could have big payoffs later. But the federal government is doing nothing to foster this or even raise the issue.
Yes, it is difficult to plan for things that are sure to happen that may not take place for decades or even centuries. There eventually will be another large quake near New Madrid, Mo., and when it does, Memphis, Tenn., will be devastated and St. Louis will suffer great damage. Eventually, Mount Rainier will erupt and mudslides will cover swathes of suburbs to the south and east of Tacoma, Wash. A major tsunami someday will hit somewhere along the Pacific Coast.
All of these could occur next year or might not occur for a millennium. Simple studies involving various probability assumptions and the “time value of money” may show we should spend nothing now. And yes, states and localities are doing some things. But we are doing very little at the national level to do such assessments of these major events or myriad probable smaller ones.
We have done a bit to reduce the moral hazard resulting from federal flood insurance that has caused greater economic damage to occur than would have otherwise, but perverse incentives still exist. We have not addressed the moral hazard created when the federal government takes over levees originally constructed to protect farmland but that then encouraged construction of high-value housing in areas where it never should be built, such as in California’s Sacramento delta.
Nor have we updated the flawed procedures used to determine whether federal aid will be forthcoming. With designation of specific counties as “disaster areas,” the taps open. Without it, nothing. Above a certain threshold of damage relative to the size of a state’s economy, a 75-25 percent federal-state split is used — below it, nothing. We have not even adjusted the statutory dollar values that trigger federal action for inflation.
Disasters are not going to go away, and as population densities in disaster-prone areas increase, death tolls and monetary damages will increase.
We are likely to have more Irenes and Sandys in the next decade or so. And there are geologic events that are overdue. We can spend some money now on preparation or we can spend a lot more, even adjusted for interest and inflation, later.