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What the sequester means for hurricane victims

Firefighters respond to superstorm Sandy in Lindenhurst, N.Y. Recovery efforts for Sandy could be defunded if the sequester depletes the Disaster Relief Fund too quickly. (Jason DeCrow -- AP)

Barry Scanlon served as special assistant to James Lee Witt during Witt's tenure as director of the Federal Emergency Management Agency (FEMA) for President Clinton. Today, he is senior vice president for government relations at Witt O'Brien's and was president of Witt Associates, Witt's disaster preparedness, response, and recovery consulting firm. He spoke on the phone Thursday afternoon; a lightly edited transcript follows.

Dylan Matthews: FEMA operates on a different budgeting system than other domestic programs do. Walk me through how that works.

Barry Scanlon: Sure. FEMA’s post-disaster funding — where they support states, and locals, and universities, and people who are eligible — comes out, per the Stafford act, of the Disaster Relief Fund, which is semi-funded on a regular basis, but is replenished in supplementals.

Under the sequester FEMA would take a $1 billion cut in the DRF, and their projections are that they would run out of the money before the end of the fiscal year. If you had a spring flooding season that was higher than expected (which people don’t really think will happen, for what it's worth) or a more active than usual tornado season, that runs out earlier. And as you know, the fiscal year ends September 3.

So you could have a bigger than average, or even a catastrophic, event in the hurricane season in July or August, where they would be thrust back into the same political maelstrom that happened with Sandy, where they waited as long as they could after the event to pass a supplemental. Governors, mayors, other elected officials — they can’t make decisions unless they know they have a federal partner.

The other side is they’re having to cut state preparedness grants by 5 percent and historically, even an objective person, but certainly people in emergency management think those programs are underfunded in the first place. We should be doing more mitigation, more prevention, never mind cutting it. So that is going to mean that they're losing tens of millions of dollars that could be working on preventing damage in the next disaster, which is going to cost hundreds of millions of dollars. Historically, the studies have shown that there’s anything from a 4 to 1, 8 to 1 return to spending on prevention. It’s vitally important to spend on prevention.

Dylan Matthews: So what happens if the Disaster Relief Fund runs out? Do they just keep spending and hope Congress passes a supplemental?

Barry Scanlon: It gets worse than that. We work for a lot of states and localities helping them do recovery. That’s part of what our business does. What FEMA ends up doing, because they’re good stewards, is that they have money to spend for emergencies. Sandbags, removal of hazardous waste — it has to be spent that day. As opposed to rebuilding a hospital or something where you don't want to delay, but you could delay it a week. There is not an immediate health and safety risk.

But what they do is stop paying for the recovery of past disasters. If you got hit by the tornadoes in Joplin, or even by Katrina, and those things are still being worked out, they don’t approve the paperwork. They can’t legally approve it. It slows down the recovery process for all the events of the past several years.

These programs were designed to get people back up on their feet as quickly and efficiently as possible. If the schools aren’t open, people aren’t going to work. If the bridge is damaged, it takes an extra hour to get back to work. Every time you’re slowing down the recovery process, you’re imposing an anti-stimulus on people who are trying to get through the recovery of an event.

Preparedness grants that help communities, like this one in Lancaster, Tex., deal with tornadoes and other natural disasters will be cut in the sequester. (Mike Stone -- Reuters)

Dylan Matthews: But some of the FEMA budget, salaries and such is on the regular budget and will also get cut. What will that do?

Barry Scanlon: I’m not informed about what Obama is going to cut out of the fire assistance grants, I don’t have the information on that. But on the FEMA perspective, it’s a relatively small agency. It’s only a couple thousand people. It will hurt FEMA, but the people who are out working on disasters are funded out of the disaster relief fund, and that’s not being impaired tomorrow. FEMA is not going to be pulling people out of New York and New Jersey, but at some point they will if these things aren’t resolved.

Dylan Matthews: Does this hamper preparatory purchases of things like sandbags that FEMA needs to have to be ready for disasters?

Barry Scanlon: The FEMA disaster programs are designed as reimbursement programs. So I’m Des Moines, I may have people on call to provide these sandbags, so I pay those people and then I go back to FEMA to pay me back for the sandbags. [The sequester] doesn’t affect that as much.

It’s easy to see this as something that doesn’t have an immediate effect. But when you’ve been in areas affected by these events, it’s devastating, and it doesn’t end in a week, and it doesn’t end in a month. Governor Christie has said one of the main roads in New Jersey is not going to be fixed for two years. They’re going to rebuild it in the right way so it won’t wash out the next time. They’re doing the right thing by rebuilding it back to the right standard. So there are these ripple effects. You want as much energy behind recovery as possible. Any time you stifle that, it’ll slow down recovery, and slow down prevention.

FEMA briefed all the state directors and said, “We don’t have any grant guidance because we don’t know what money we have to spend.” Let’s say for sake of argument I'm the state of Illinois, and I’m making up a number, but let's say they’d get $5 million to disperse to locals to do better flood protection, prevention, preparedness. FEMA can’t tell the state what to do, which in turn can’t tell locals what to do. There will be inefficiencies since everyone’s scrambling to get the money out.

Dylan Matthews: Any final comments?

Barry Scanlon: There’s a time bomb going on with the Disaster Relief Fund. Historically, the American people, regardless of party, have stood behind Americans who’ve had to deal with significant events. And this time [Sandy] they made them wait 90 days. You used to say, 'Oh, it’s not that big a deal, they’ll pass a supplemental. That’s how it works.' That trust seems to have been broken. Where they go from here is anybody’s guess.



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