Better preparation would save taxpayers billions
WITH summer around the corner, Americans have weeks of sun to look forward to. In many parts of the country, however, the season brings a much more threatening force of nature. The Atlantic hurricane season officially begins on June 1st. This year, America’s National Oceanic and Atmospheric Administration expects 10-16 big storms and five to nine hurricanes (a typical year has around 12 storms and six hurricanes). After a record-breaking season in 2017, which brought ten hurricanes that inflicted around $265bn in damage, this year’s rather average forecast may come as a relief. But policymakers would be foolish to ignore the growing risk.
America is much better prepared for hurricanes today than it was when Katrina struck in 2005. But the process for responding to such crises remains wasteful and inefficient. When a hurricane strikes, the Federal Emergency Management Agency (FEMA) uses its Disaster Relief Fund to pay for food, shelter and repairs to infrastructure. In the past eight months, FEMA has doled out over $17bn from the fund (see chart). This pot of money, which pays for about half of all federal spending on hurricane relief and recovery, is often woefully close to empty: it held just $2.2bn when Hurricane Harvey struck last August. It is only after the roaring winds and rising waters have done their damage that Congress allocates new funds to top it up through “supplemental appropriations”.
America’s policymakers would get better bang for their buck if they made greater efforts to prepare for disasters ahead of time. The National Institute of Building Sciences, a trade group, reckons that each dollar spent on disaster mitigation can save as much as six dollars in future losses. Yet such spending has been declining for over a decade. This year Donald Trump, who gave himself a grade of A+ for his responses to last year’s hurricanes, proposed $61m in cuts to FEMA’s Pre-Disaster Mitigation grant programme—a 61% reduction.
Whatever happens this hurricane season, preparation will only become more important in the long run. According to the Congressional Budget Office, damage from hurricanes is expected to grow in the coming decades—in part because of climate change, which will cause sea levels to rise and increase the frequency of the most intense storms. The White House appears to be ignoring such risks for now. Last August Mr Trump rolled back a rule implemented during Barack Obama’s presidency, which required the government to account for climate change in federally-funded building projects. In March FEMA dropped references to “climate change” from its strategic plan. Such denialism delights many of Mr Trump’s hard-line Republican supporters, who doubt that climate change is real. But the costs of natural disasters will ultimately be borne by Democrats and Republicans alike.