Hurricane Sandy has resurrected a debate about the proper role of government in disaster relief. Some argue that the disaster response proves the effectiveness of big government. Others say a federal role should be reserved for only the largest disasters, and, in some ways, federal government policy has done more harm than good.
An ideological split on the proper role of the federal government is illustrated this week in the debate over disaster relief by the editors of two of America's leading newspapers: the conservative Wall Street Journal and the liberal New York Times.
"A big storm requires big government," the NYT editors wrote Monday. They excoriated Republican presidential candidate Mitt Romney for suggesting in a June 2011, primary debate that state governments and private organizations could provide effective aid at a lower cost than the federal government.
"Disaster coordination is one of the most vital functions of 'big government,' which is why Mitt Romney wants to eliminate it," they chided.
The WSJ editors, on the other hand, complained Tuesday that liberals are using the storm to argue that America needs bigger government. It's "absurd," they wrote, "to argue that a once-in-a-century storm means you can't block-grant Medicaid" (a possible reference to this op-ed by liberal Washington Post columnist Eugene Robinson).
The WSJ editors also wondered why liberals are attacking Romney when Obama sought a 6.02 percent, or $641.5 million, cut for the Federal Emergency Management Administration (FEMA) in his 2013 budget.
The response to Hurricane Sandy so far illustrates, they argued, that a devolutionary approach to disaster response is workable and prudent because state governors and city mayors have led the effort.
"Energetic governors and mayors are best equipped to handle disaster relief because they know their cities and neighborhoods far better than the feds ever will, and they know their citizens will hold them accountable. The feds can help with money and perhaps expertise," the WSJ editors wrote.
Due to the way federal disaster aid is structured, state governments have incentives to seek federal aid, notes Tracy Gordon, a fellow in the Economic Studies program of the Brookings Institution, a left-of-center think tank.
While the $18 billion or so spent on disaster aid is small compared to the rest of the federal budget, "it is perhaps the ultimate example of 'particularistic' government spending, or spending that benefits a small area but whose costs are borne generally. When these conditions apply, incentives abound, especially in the heat of a crisis, to spend freely," Gordon wrote Tuesday.
Gordon also pointed to research showing that governors are more likely to request federal aid in presidential election years, especially in swing states, and they are less likely to seek federal assistance if they cannot run for re-election. A request for an interview with Gordon had not been returned at the time of publication.
Matt Mayer, a visiting fellow at Heritage Foundation, a conservative think tank, and a former Department of Homeland Security official, argued in a Thursday interview with The Christian Post that the federal government should only be involved in disasters that are so catastrophic that they overwhelm the capabilities of state and local governments.
"We need to reserve FEMA for the big events, like Hurricane Sandy, but get FEMA out of the business of routine disasters that are perfectly within the capability of state and local governments to handle," Mayer said.
One of the problems, Mayer contends, is that when the federal government is involved it pays 75 percent of most of the costs of disaster recovery efforts. This creates an incentive for state governors to request aid for even small disasters.
Mayer believes that the cost-sharing proportions should be reversed – the federal government should pay 25 percent while state governments pay 75 percent – to discourage abuse of the system (though with flexibility for extreme situations like Hurricane Sandy).
George Zanjani, associate professor of Risk Management and Insurance at Georgia State University, has argued that federal disaster aid is like a "stealth entitlement" because Congress does not budget for the amount the federal government can expect to spend on average per year. He calculated that the federal government can expect to spend between $90 billion to $240 billion beyond what has been budgeted over the next decade if current trends continue.
Another concern about government involvement in disaster recovery is that it encourages risky behavior for individuals and corporations when deciding where to build houses or other buildings.
Government aid for rebuilding and government subsidized insurance encourages people to build in areas that are at greater risk for damage during a disaster, argued Jim Hilliard, assistant professor of risk management and insurance at the Terry College of Business at the University of Georgia, in a Thursday interview with The Christian Post. When people live in high risk areas, it also places a greater burden on governments that must then act to save them when natural disasters strike.
"If everyone was forced to bear the full cost of their decision, these would not be the places people would choose to live," Hilliard argued.
A 2010 study by professors Mark J. Brown, University of Wisconsin – Madison; Carolyn A. Dehring, University of Georgia, David L. Eckles, University of Georgia; and William D. Lastrapes, University of Georgia, for instance, showed that the National Flood Insurance Program encouraged excessive development in flood prone areas.
"Other than immediate humanitarian aid, is there any reason to shift the costs of living near the ocean, or a river, or in a fire-prone desert area to taxpayers who choose not to inhabit places that are so risky and expensive?" Nick Gillespie asked rhetorically in a Wednesday article for Reason, a libertarian publication.
Gillespie also cited a 2011 report from the Government Accountability Office stating that FEMA "has not followed sound management practices to design, administer, and evaluate pilot programs that advance and integrate state and federal catastrophic planning efforts."
Like Romney and the WSJ editors, Gillespie argued that state and local governments are better equipped than the federal government to respond to disasters.
"For all sorts of reasons – the foremost being the immutable law of geography – first responders will always be largely drawn from local and state sources," Gillespie wrote. "Those are the people who will not only be most numerous but will also have the best knowledge of a given area."