How a Smart Conservative Would Reform FEMA

By Jordan Weissmann

Hurricane Sandy has focused attention on Mitt Romney's comment that we should shrink the Federal Emergency Management Agency and give states more responsibility for dealing with natural disasters. Is he right? Could conservative reforms actually save FEMA -- and save lives? To get a sense of what a thoughtful Republican plan for the agency might look like, I called Matt Mayer, a former Bush administration official in the Department of Homeland Security and visiting fellow at the Heritage Foundation. The interview has been edited for length and clarity.

What did you make of Romney's comments about FEMA?

He didn't artfully state the point I think he was trying to make.

I think his thrust was that there is an appropriate role for states and local governments, and there is an appropriate role for the federal government. And we've kind of lost sight of that in terms of disaster response. We've nationalized so many of the events over the last few decades that the federal government is involved in virtually every disaster that happens. And that's not the way it's supposed to be. It stresses FEMA unnecessarily. And it allows states to shift costs from themselves to other states, while defunding their own emergency management because Uncle Sam is going to pay. That's not good for anyone.

When FEMA's operational tempo is 100-plus disasters a year, it's always having to do stuff. There's not enough time to truly prepare for a catastrophic event. Time is a finite quantity. And when you're spending time and money on 100-plus declarations, or over 200 last year, that taxes the system. It takes away time you could be spending getting ready for the big stuff.

Nobody is taking the position, that I know of, saying get rid of FEMA, the federal government should have no role responding to disasters. The position is, no no, we need to save FEMA and the Federal Government for the big stuff: Sandy, Katrina, Northridge. But states should be charged to take care of the other, more routine stuff that happens every year. There are always going to be Tornadoes in Oklahoma and Arkansas. There are always going to be floods in northwest Ohio and Iowa. There are always to be snowstorms in the Northeast. There are always going to be rain storms, fires in Colorado. They happen every year. There's no surprise here. And they don't have national or regional implications, economically or otherwise. If they do, that's a different question.

Why do you think Washington has assumed so much responsibility for dealing with disasters?

I think the first real change was when James Lee Witt was put in charge of FEMA during the Clinton administration, and for the first time it wasn't a Washington Bureaucrat or a former military person. For the first time, it was someone who came from the states and spent most of their career in the states. And so he brought a very state-centric position. And it was also the first time a former politician was put in charge of FEMA. He ran for office seven times in Arkansas, and he brought a very political mindset to FEMA. One of his famous quotes was: "Disasters are inherently political events." And I think that created the opportunity to start using FEMA as an entity that could get involved in things in a way that would have political outcomes. And I think you saw that in 1996, when FEMA eclipsed any record it had previously set and issued 158 declarations in an election year. It was just unprecedented. And it's not like there was just some flurry of activity. They just got involved in lots and lots of different disasters.

So that's one area. I think another issue is some people see the failed response to Hurricane Andrew as the reason George H.W. Bush lost Florida to Clinton. So now, you have presidents who are very concerned about the potential impact, from an election standpoint, of disasters. That created an incentive to nationalize things. Governors also quickly figured out that, hey, if we can get FEMA to issue a declaration, 75 percent or more of our costs get shifted from our state to the other 49 states. So that's a way for them to save money. And then they can divert that money they would have used for disasters to schools, bridges, and other things that get votes more routinely for them.

And I think the final piece is the failure to adjust the monetary threshold for states for inflation.

So you think FEMA's decision-making process is outdated?

There are two thresholds for FEMA to get involved in a disaster. First, there's the Stafford Act. What it says is: "of such severity and magnitude that it overwhelms state and local resources." Very few of the disasters in the last twenty years have been of such severity and magnitude that they truly overwhelm state and local resources. That gets ignored routinely. Then, from a regulatory standpoint, each state has a dollar figure based on population and total damage. And if you hit this number, then that makes you qualified to get the major disaster declaration and the costs shift and everything gets triggered. That number has not been adjusted in over two decades. I've written about this, and so has the Office of the Inspector General, who has said, "Hey, this is kind of crazy!" A huge number of declarations that were granted, if we just adjusted that dollar figure for inflation, would never have met the threshold.

How would you reform FEMA?

Let's adjust that dollar figure for states. Let's get that up to current numbers and let it reset for inflation. That way, we don't have thresholds that are grossly too low and virtually anything qualifies. That's number one.

Number two, I would say there are certain things we're going to take out of FEMA eligibility unless -- you've got to have an exception -- it has an economic impact that is broader than the state, or it's close to that severity and magnitude threshold, which should exist. So let me give you an example. There are very few tornadoes that overwhelm state and local resources. There just aren't that many. Now, you could say an exception would be the one that hit Alabama. If that created, let's say, $3 billion in damages, that may be where we have an exception. But broadly, tornadoes aren't going to qualify for FEMA declarations unless they hit a certain threshold that is a hard threshold. Tropical storms aren't going to be eligible for FEMA declarations. Snow storms aren't going to be eligible, unless a very hard threshold gets hit that makes sense from an economic standpoint. We remove these things from FEMA's portfolio and stop governors being able to essentially chase those dollars. That will allow state and local governments to take the responsibility that they should have seriously, and allow FEMA to focus its time and money on making sure that when a big event happens, none of us are going to be doing after action reports about what went wrong with FEMA, because it had the time and money to prepare for catastrophic events.

But at this point, is it realistic to trust the states to fully prepare for disaster relief, especially places like Louisiana and Texas that are really disaster prone, but like to keep their taxes low?

Let's look at it from a different way. From an Ohio perspective, I sure think so. We have very few disasters. If we don't force Texas and Louisiana to spend their own money on their own issues, then Ohioans have to subsidize it. Because fundamentally, when you talk about FEMA and nationalization, that's what you're saying. It's not as if the money coming from nowhere. That money comes from the 50 states that fund FEMA. So if Texas and Louisiana are allowed to not fund these things and they're allowed to essentially federalize them, all that really means is Michigan, Indiana, Ohio, and Illinois, which have very few disasters in any given year, are subsidizing the bad decision making down South. The only way we're going to get that to change is if we get FEMA out of the routine and force states to actually allocate funds accordingly. Because if they don't, believe you me, Bobby Jindal and Rick Perry will be held accountable by their voters if they fail to adequately respond to what is a state based disaster and not a federal disaster. That's the only way we're going to get that accountability.

How well do you think FEMA is doing its job these days?

We'll get a good picture out of Sandy in the next few weeks. But that will only give us part of the story. The other part is an event where we don't have a chance to see it coming. We've yet to see FEMA tested with a 7.5 or an 8 point Richter Scale earthquake in California, or a massive terrorist attack, or some type of volcano. Something that is a no-notice event. You can see the Hurricane coming and move things into position. What we have not yet seen is how will FEMA do when a no-notice event hits, and we don't have the luxury of pre-positioning supplies like we've been doing since Katrina.That's where we'll truly find out if, in the years since Katrina -- or 9-11 or Northridge -- FEMA has put in place the kind of capabilities needed to handle those types of events.

Romney seemed to suggest we should give the private sector more of a role in disaster relief. How would that work?

I'm not quite certain that what they're saying is privatize this stuff as we would, let's say, a toll booth. I don't think that's what people mean. I think what they mean to ask is, "Is there a greater role we can have for private sector actors, who, because they're driven by the profit motive, can get things open more quickly, then respond?"

Look, if Walmart's open and has water, why are we trucking water to give out for free? If victims can go into a store that is open to get water or food, why are we handing it out for free? All that does is undermine the private sector businesses out there, whether it's a Waffle House or a local hardware store. By providing tarps, providing water, providing food, we're displacing the private sector, harming the private economy, and putting greater strain on FEMA to deliver things when those things may be available right across the street.

So you think FEMA's role could shrink. But do you really trust our current Congress to cut it in a smart way?

You can't blindly cut without having making sure we have the dialogue about roles and responsibilities among the three levels of government. But if we say we're going to change FEMA's portfolio -- so save FEMA for the big stuff and make sure it has the funds for those --and we're not going to provide funds for the things states and locals should be doing for themselves, I think that's the right analysis. A fact based, data based view rather than just blindly cutting. 

You want to be responsible about it. We don't want to gut FEMA. But we want to make sure it's right sized. Look, Obama's budget cut FEMA. So it's not like it's a partisan issue. We have finite resources. We're in fiscal crisis. We should figure out who should be doing what and how much they need to do it and figure out who should be paying for it. I don't think we should be paying for tornadoes in Oklahoma.

This article available online at:

http://www.theatlantic.com/business/archive/2012/10/how-a-smart-conservative-would-reform-fema/264367/