This perverse incentive of significant federal money with a very low threshold has sparked a significant increase in the number of disasters that are federalized. The Reagan administration issued an average of 28 disaster declarations a year. George H. W. Bush averaged 43.5, Bill Clinton 89.5, and George W. Bush 129.6. Barack Obama issued about 107 declarations a year.
In addition to giving states the wrong incentives, these policies harm FEMA’s ability to do its job effectively. As FEMA worked to support recovery efforts after Superstorm Sandy and last year’s Hurricanes Harvey, Irma, and Maria, the Disaster Relief Fund (DRF) ran out of money and required supplemental appropriations.
Most years, the DRF has enough funding to cover FEMA’s ongoing obligations from past disasters as well as small- and medium-sized disasters that arise during the fiscal year. But when a big disaster strikes, the DRF often finds itself overleveraged. Congress is then called on to replenish the fund. These supplemental appropriations are political must-pass pieces of legislation. And politicians, being politicians, seldom miss the opportunity to tack all sorts of additional spending onto these bills. The result, too often, is a fiscally irresponsible “disaster relief” bill, packed with spending on completely unrelated issues that should be debated in the traditional appropriations process.
The proliferation of federal disaster declarations overwhelms more than just FEMA’s funding. It overwhelms the agency’s limited attention, as well. Each request for disaster funding must be adjudicated, FEMA officials deployed, and grants reviewed and overseen—all while navigating a minefield of regulations and rules on grants and government spending. This process can spread FEMA thin when it would prefer to focus on preparing for, and responding to, the biggest disasters.
FEMA’s current administrator, Brock Long, is looking for ways to incentivize state and local preparedness and return more responsibility to lower levels of government. For example, the agency is experimenting with turning over to Texas the responsibility for running the housing-recovery programs working to rebuild Houston. While the feds would continue to fund most of the work, the shift in management frees up FEMA officials to work on other issues.
Similarly, under the Obama administration, FEMA considered charging a “disaster deductible” to encourage states to be better prepared and more financially invested in disaster recovery. Long, like other FEMA officials before him, recognized that expecting FEMA to be engaged all the time, everywhere, and also fully prepared for a major catastrophic disaster is simply unrealistic.
But reform via administrative action is difficult because in many areas, FEMA’s hands are tied by legislation. The Stafford Act compels it to pick up the tab whenever a state is unprepared. FEMA can and should continue to look for ways to incentivize state and local preparedness, but Congress should fix the perverse incentives created by the Stafford Act and instead advance shared responsibility among federal, state, and local governments.