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What to Do Next?

January 4, 2013

Washington should prepare for disasters, not just react; Considering the frequency of multibillion-dollar natural disasters such as Superstorm Sandy, the government should devote more resources to preparing for them. LA Times, Jan. 4, 2013.

Congress took an important step to discourage development in risky areas last year when it rewrote the rules for the federal flood insurance program, ending counterproductive subsidies for new buildings in flood-prone areas and for existing buildings that had suffered repeated flooding. Now, it needs to promote the same kind of sensitivity to risk broadly, so that state and local governments take a firmer stance against development that ignores the risk of wildfires, hurricanes, floods and earthquakes.

One way to do so would be to insist that state and local governments match at least part of the federal disaster aid they receive, which would make them more leery of lax building codes and overly permissive zoning. Although federal law currently calls for Washington to pay only 75% of the tab for disaster assistance, Congress often reduces or even waives that requirement in the face of catastrophic losses. That’s a humane response, but it also creates a moral hazard.

Sandy’s victims need federal help today, but in the long run, lawmakers should look for other approaches to disaster preparedness besides writing big checks. A good example is the California Earthquake Authority’s proposal to use federal loan guarantees to reduce the cost of earthquake coverage, encouraging more people to obtain policies and, in the process, make their homes more quake-proof. Another idea is to provide tax incentives for local agencies to sell bonds to raise money for post-disaster repairs, as Congress has done for about a dozen states over the last decade. Rather than debating how much to spend in Sandy’s wake, policymakers at all levels should be looking for ways to reduce the cost of the catastrophes that are sure to follow.

One Comment leave one →
  1. January 4, 2013 5:34 pm

    I’ve said it before, but I think it bears repeating – the federal budget needs to include line item funding for disasters (And, of course, we all need Representatives, Senators, and bureaucrats willing to live within a budget!). It’s all too easy to call for extraordinary funding for “an act of god,” and then have Congress uncritically provide it. And thus the futures of our kids and grandkids are further mortgaged.

    We all know that the Sandy funding requests go beyond recovery and redevelopment needs (and I don’t just mean the pork). Without trying to debate the merits of any one project, someone should have to ask – for each – is this what we want to spend our money on? As a country, we are entering a period in which we either make tough choices or suffer the consequences of our cowardice in not making them. As a grandfather, I want to know – is it too much to ask that we try to balance near term benefits against the long-term costs we’re asking future generations to pay?

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