In brief, current law centralizes most disaster recovery funding in federal hands. Essentially, when hitting a small trigger amount – about $6 million in the case of Louisiana – federal aid of at least 75 percent of costs kicks in for almost every kind of recovery spending, with some of an emergency nature paid fully by the federal government. Potentially, by law federal policy-makers could pay for it all. Moreover, the process for making states eligible – a disaster declaration of any of several kinds – relies on almost total subjectivity. This low threshold and leaving a declaration ultimately in the hands of an elected official, the president, has led to an exponential increase over the past nearly quarter-century in declarations and amount paid out. From typically two or three dozen declarations a year under Pres. Ronald Reagan, Pres. Barack Obama now issues hundreds a year.
This lumping in of the small with the highly consequential drains money that otherwise could go to assisting states with truly disruptive disasters that weigh heavily on their purses. However, from a political standpoint this makes sense, as some states like Louisiana, because of their geographies and climates, disproportionately suffer natural calamities. By having federal aid kick in at such low levels, proportionally more money becomes available for the majority of states that don’t have many and/or costly disasters befall them.
The same reasoning guides presidential decision-making on these. The more disasters a president declares, the more he can spread around federal tax dollars, buying favors from members of Congress and inviting voters to look favorably upon him and/or his party in future elections.
The funding system makes matters even more politicized. Current law budgets regularly for disasters, but at a base level more and more inadequate to cover the mushrooming number of disasters declared. Past that, Congress can add authorize up to a certain level, currently about 10 times the base (that calculated as spending for a “normal” year) in the regular budget process for drawing out if needed.
Yet because of the run on funds, the account which was designed to carry over surpluses from year to year never does and cannot come close to handling catastrophes. In these instances, Congress passes emergency supplemental appropriations. As opposed to the normal budget process, where the amount given to disaster relief represents but a tiny sliver of the whole and partially counts against overall spending ceilings (the base, not the disaster designated appropriations) that does not make it part of political calculations, emergency supplemental appropriations stand alone with no limitations that end up rolling more logs than Capt. Henry Shreve busted up on the Red River by 1839.
For example, the $50 billion bill passed to deal with the aftermath of Hurricane Sandy in 2012 contained tens of billions in spending that had nothing to do with the disaster (more in its original version) spread out all over the country. A decent-sized portion did address future flood mitigation, but was non-emergency in nature and therefore inappropriate to the bill. Such larding had everything to do with either or both of taking advantage of the situation to circumvent regular spending rules and/or of buying enough support for it to pass from congressmen in unaffected states, which it did with the majority of Republicans objecting precisely because it contained so much pork.
And so this leads to the current politicized atmosphere, where liberal media elites cynically call Louisiana congressmen inconsistent for voting against the bloated Sandy bill while pursuing federal aid for the flood disaster at present (and not even in the form of an emergency appropriation, yet), when they had wanted offsets for the unrelated spending by reducing it elsewhere in government. This broken process needs reform, by raising the minimum threshold to trigger federal aid, by using a sliding scale from 100 to 0 percent a state must pay upon acceptance that depends upon the amount given rather than subsidizing heavily small disasters and leaving it to the political whims of a president or Congress to pay all of big ones, and by defining what constitutes a qualifying disaster in much narrower terms than presently used that would concentrate federal monies on large disasters.
But that’s not the current process, so watch for politics to interfere mightily with Louisiana’s attempt to dry out and recover from some of the largest flooding in American history.