In Hurricane Harvey Response, Congress Must Avoid the Mistakes of Sandy
By Justin Bogie, Senior Policy Analyst in Fiscal Affairs, Roe Institute for Economic Policy Studies, Institute for Economic Freedom and Opportunity, at The Heritage Foundation.
As the floodwaters of Hurricane Harvey begin to recede, focus will shift to the costs of cleanup and recovery.
There are already rumblings that Congress will look to pass a “Superstorm Sandy” type emergency funding package that could provide billions of dollars in federal aid to affected communities. Anytime a natural disaster or unforeseen crisis occurs, there is pressure on lawmakers to help.
Ensuring the health and safety of those directly impacted by the storm is a top national priority. However, Congress must learn from mistakes of the past and carefully prioritize any additional funding provided for relief and recovery, and take steps to mitigate the costs of future disasters within current budget constraints.
In the aftermath of Hurricane Sandy, Congress approved two separate bills that appropriated $60 billion toward relief efforts. All of those funds were exempted from the constraints of the Budget Control Act by utilizing disaster and emergency designations, meaning billions of additional dollars in deficit spending.
The first $10 billion came through raising the federal borrowing authority of the National Flood Insurance Program. The remaining $50 billion in funding came through a separate supplemental appropriations bill that provided funds to over 20 separate federal agencies.
Congress should be more prudent in its response to Harvey.
The National Flood Insurance Program is drowning in debt, already owing taxpayers nearly $25 billion. This program encourages development in flood prone areas, which ultimately worsens the impact of natural disasters.
The program is set to expire at the end of September, and lawmakers may try to use Harvey as an excuse to appropriate more money and ignore long-needed reforms.
Additional borrowing authority may be necessary in order to cover claims to policyholders in the areas impacted by Harvey, but this should be accompanied by reforms that would initiate to phase-out of the national flood insurance monopoly in favor of a private insurance market.
Congress must also ensure that any federal money provided for Harvey relief truly meets the requirements of emergency designated spending. This means that the need for funds must be necessary, sudden, urgent, unforeseen, and not permanent.
Congress failed to meet this standard during Hurricane Sandy relief. There, only $17 billion out of the $50 billion in supplemental funds were allocated to meet immediate and critical needs. The remaining $33 billion was supposed to fund long-term recovery efforts and infrastructure improvements that would help reduce damages caused by future disasters.
Mitigating the impact of future disasters, where appropriate, should be budgeted for through regular appropriations. But in this case, lawmakers exploited the emergency loophole to skirt fiscal responsibility.
Ultimately, billions in Sandy-labeled funding went toward spending that had no direct link to the storm. Among items funded by the bill were improved forecasting equipment and reconnaissance aircraft for the National Oceanic and Atmospheric Administration, additional weather research programs, and state and tribal assistance grants for clean water and pollution control.
Those initiatives that warrant federal funding should be funded under the full transparency and oversight of the annual appropriations process, not under the guise of an “emergency.”
Congress must make sure that any aid package targets immediate response and relief efforts in those areas directly affected by the storm. If Congress chooses to provide funds that go beyond serving immediate needs, those dollars should be fully offset by reforms to other programs and remain within the Budget Control Act’s aggregate spending cap.
Before appropriating any new funds, Congress should fully exhaust the balance of the Federal Emergency Management Agency’s Disaster Relief Fund, which received an additional $6.7 billion in uncapped funding in the fiscal year 2017 omnibus bill.
Moving forward, Congress should incorporate cost estimates for future disasters into the annual budget process. Congress should also increase the threshold for disasters meriting FEMA funds. This would allow FEMA to retain reserves in the Disaster Relief Fund for national disasters.
Disasters should be budgeted for within base funding, except in cases of true unforeseen, sudden, and disproportional emergencies.
Congress can provide relief for Hurricane Harvey without making taxpayers pay for another pork-laden disaster relief package that wastes billions of dollars and puts the country further into debt.
*To read this piece on The Daily Signal website, click here.