Hurricane Season Officially Begins

Weekly WastebasketHurricane Season Officially Begins.....and Congress is going to make it rain.

Budget & Tax,  | Weekly Wastebasket
May 31, 2019  | 8 min read | Print Article

The first week of June marks the official start of hurricane season. It’s also likely the beginning of the end for congressional efforts to pass an emergency spending bill dealing, mostly, with last year’s hurricane season. Congress would do well, however, to pump the brakes on this so-called “emergency” spending in order to do it right. Federal taxpayers and communities facing natural disasters this year would be better for it.

The long-stalled disaster supplemental is a microcosm of Congress’ challenge in righting our fiscal ship.  Despite overwhelming consensus of the need for the bill, its passage has been delayed for months. Legislators have hijacked it hoping to add non-emergency parochial carveouts. Most of the “emergency” spending will be doled out over years, even decades, and is only designated as emergency to avoid spending limits. After all that, the bill doesn’t do enough to help communities and individuals better protect themselves against future disasters.

The government’s role.

Helping communities prepare for, respond to, and recover from natural disasters is a federal interest.

There are federal agencies effectively responding to emergencies. The Corps of Engineers is patching levees that fail. FEMA’s Disaster Relief Fund is sending aid to provide shelter, conduct debris removal, and restore critical infrastructure. Individuals, communities, and federal agencies don’t wait for an act of Congress to respond to disasters.

So what’s in the emergency supplemental currently languishing on the House floor? That money will be used to backfill accounts, reimburse state agencies, or get doled out over many years. The bill mostly addresses an “emergency” in the budgetary sense. This allows lawmakers to leverage the urgency behind the emergency spending bill for parochial gain.

For example: The latest version to pass the Senate only occurred after Senate Appropriations Committee Chairman Richard Shelby (R-AL) relented on his demand that the bill unlock billions in additional federal spending on construction and maintenance at the nation’s ports. Having a debate on how the federal government should manage and pay for investments at ports is important. And that debate happened when Congress debated legislation dealing with this issue (WRRDA2014 and WIIN Act 2016) and during every infrastructure week. Hijacking the “emergency” spending bill to achieve a long-held policy goal is just wrong. Ditto for other non-emergency provisions holding up the bill – like extending federally subsidized crop insurance to cover hemp or additional border wall funding.

So what’s next?

The longer this bill stews, the more clearly it becomes an exercise in avoiding accountability. Emergency spending doesn’t have to be offset with spending cuts or revenue increases; it’s simply added to the deficit. The freedom of not having to even try to pay for emergency spending bills creates mission creep in almost every disaster bill, this one included. This package has grown from an $8 billion bill when first introduced in December to $19.1 billion now. With every iteration, it has grown in both size and scope. Some of these expansions are due to new disasters occurring. But much is securing funding for pet projects and about further eroding existing federal policies seeking accountability in federal spending. This is especially true for the $3 billion agricultural subsidy section of the bill.

For decades, federal programs aimed at farming and ranching businesses have made the welcome shift from mandates to markets. Slowly but seemingly surely Washington is on a path to not telling farmers how much they can grow (quotas) or how much they will get paid (price supports). Instead, lawmakers and industry have embraced policies like federally subsidized crop insurance that help producers manage risk. The beauty in this shift is it requires farm businesses to put skin in the game. Not enough skin, but it’s a start.

The emergency supplemental threatens to undo this progress. Farm businesses that chose to roll the dice and not even buy federally subsidized crop insurance will receive this federal aid for up to 70 percent of the revenue they’d hope to make – even though they didn’t buy coverage. The bill directs federal dollars to cover losses for “stored grain,” something the private insurance market already covers. And the one grain of good, a requirement that anyone who cashes a disaster aid check take some personal responsibility for creating their financial safety net by actually purchasing (subsidized) crop insurance for the next two crop years, is undercut by another provision directing the USDA to cover the farmer’s share of the payments. So they’re not really taking any responsibility.

A missed opportunity.

Finally, the focus on parochial pandering and expanding federal responsibilities (and spending) in disaster response is wasting an opportunity to help communities and individuals better prepare for future disasters. The point of federal disaster relief is not to make people, communities, and states whole. It is to help them rebuild. And they should rebuild in a way that “pre-sponds” to future disasters and helps reduce the likelihood that more disaster relief dollars will be needed in the future. So, federal funding should only be used for smart rebuilding outside the floodplain or elevating structures at least two feet above projected future flood levels. Rebuilding smarter and safer must be a part of recovering from a disaster.

The government has a place and a role when disasters hit the nation. But federal cash must do more than help communities survive disaster. And for that, Congress and the president need to make some hard choices to help communities and individuals anticipate and properly manage risk. Maintaining the failed status quo puts people in harm’s way at the taxpayer’s expense. That’s fiscally irresponsible and morally reckless.

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