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Report: U.S. Must Prepare for Rising Cost of Disaster Relief

Source: Washington Post

Posted on 30 Apr 2013 by Neilson

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Disaster planningHurricanes, floods and droughts are putting an increasingly large strain on the federal budget. A new report released Monday from the Center for American Progress finds that Congress spent at least $136 billion on disaster relief between 2011 and 2013.

That works out to a per-household amount of $400 annually. And those costs are likely to rise in the years ahead - especially if climate change leads to more frequent extreme weather, according to the study.

But the most striking part of the report, according to its authors: No one in the government - not the Federal Emergency Management Agency or the Office of Management and Budget, for example - knew exactly how much the country had been spending on disaster relief, they said. This information isn't easily accessible anywhere.

The authors had to sift through appropriations bills and disaster relief supplementals that Congress had passed between fiscal 2011 and fiscal 2013 to make an estimate.

"If we don't even know how much natural disasters are costing us, then Congress is going to keep underbudgeting for disaster relief and recovery," said Daniel J. Weiss of the Center for American Progress, who co-authored the study with Jackie Weidman. "And lawmakers will end up doing deficit spending to pay for it."

The researchers from the liberal think tank closely aligned with the Obama administration found that a variety of federal agencies have had to spend money in response to natural disasters during the past two years.

There are the big-ticket items: FEMA spent $55 billion on general relief and flood insurance. The Department of Agriculture spent $27 billion on crop insurance after an unusually severe drought in the Midwest in 2012. And the Army Corps of Engineers has spent about $7 billion on flood control.

But disaster relief spending pops up in unexpected places, too, the report noted.

The Department of Justice received $10 million to repair a federal prison damaged during Hurricane Sandy.

"If anything, this was a conservative estimate," Weiss said. They couldn't track down precise numbers for emergency food stamps or the Internal Revenue Service's disaster assistance fund, so those weren't included in the final tally.

Costly natural disasters have become more frequent in the United States during the past few decades. The number of weather events that inflict at least $1 billion in damage has risen from an average of two a year in the 1980s to more than 10 a year since 2010, according to the National Oceanic and Atmospheric Administration.

There are a variety of reasons for that, NOAA has said: The U.S. population is growing, so more people live in coastal regions, on floodplains and in other high-risk areas. Pricier homes are getting damaged in storms. And climate change has begun to alter at least some weather patterns. A January draft assessment by the federal government's U.S. Global Change Research program found that heat waves, heavy downpours and even severe droughts have become more frequent in certain parts of the country over the past 50 years.

Add it all up, and extreme weather events now cost the United States more than $80 billion a year, on average, the report said.

The federal government has picked up about half that tab since 2011, with states and private insurers covering much of the rest. (Sometimes the damage is paid for through lost economic activity. A recent study by the National Federation of Independent Businesses found that 30 percent of small businesses fail to reopen after a disaster or emergency officially declared by the president.)

Those costs could rise in the years ahead.

The federal government's National Climate Assessment warned that a great deal of U.S. infrastructure is vulnerable to "phenomena associated with climate change, including sea level rise, storm surge, heavy downpours and extreme heat."

The report's authors make a variety of recommendations for preparedness.

For instance: The federal government should start keeping a precise tally of the costs of natural disasters. Congress should invest in "resilience" programs that allow communities to better withstand the damage from extreme weather - paid for by a small fee on fossil fuels. And the report argues that the Obama administration should do more to reduce carbon dioxide emissions and address climate change.

Otherwise, the report warns, "we are flying blind into a future with more costly disaster relief and recovery spending."