When Hurricane Agnes whipped along the East Coast nearly nine years ago it left behind more than death and destruction. The record ruin influenced the liberal Congress to boost disaster assistance from a minor budget item to a major network of little-known but far-reaching federal safety nets.
During the 1950s and '60s disaster assistance consisted mostly of constructing temporary wooden bridges for floods and providing temporary housing for disaster victims.
Today, by contrast, the federal government has become a kind of giant insurance agency. But the federal disaster programs may now be facing some minor disasters of their own at the hands of the Reagan administration, which in the course of its budget-cutting is trying to get the government out of the credit, welfare and insurance businesses.
Nearly every federal agency now has a disaster assistance program providing aid that ranges from temporary housing, food stamps, social unemployment compensation and mental health care to legal aid services, low-interest loans, free rent, expedited income tax refunds and temporary help with mortgage payments.
Farmers receive low-interest loans, insurance, technical assistance and special government payments, and individuals and families can receive grants up to $5,000 and consumer counseling. There is flood insurance, riot insurance and crime insurance. One agency even has a fleet of 200 mobile homes to house displaced disaster victims.
Small Business Administration disaster loans, funded this year for $2 billion with interest rates as low as 3 percent, make up about half of a year's disaster assistance, officials said. In addition, the Federal Emergency Management Agency, which coordinates all disaster assistance programs, has the power to demand funds, workers and supplies from all agencies, even the military.
Now, however, the administration is seeking to eliminate some disaster loans, cut others and raise interest rates on still others, as well as revise regulations so that fewer persons are eligible to receive disaster relief.
The exact amount of disaster assistance available is hard to determine because many agencies use contingency and other funds for disaster relief. And expenditures vary from year to year, depending on the number and severity of disasters declared by the president. For example, the influx of Cuban refugees last year cost the government $200 million; Hurricane Agnes cost $2.5 billion.
Anyone hit by a presidentially declared disaster can receive some assistance. After tornadoes flattened tiny Xenia, Ohio, women in fur coats driving Cadillacs received food stamps from federal assistance centers, a disaster official said.
That is one aspect of disaster aid that the administration, which talks of extending the federal helping hand to the "truly needy," wants to change. "Given existing fiscal constraints, the administration believes the federal disaster assistance should be provided only to those who are most in need," the administration explained in its fiscal year 1982 budget revisions manual.
Administration budget-cutter David A. Stockman has proposed ending the SBA's non-natural disaster loan programs, which provide aid for persons such as those who lost jobs or were displaced by the Three Mile Island accident or the withdrawal of the United States from the Moscow Olympics last year. Interest rates on physical disaster loans would be increased to near market rates. In addition, the pending 1981 supplemental funding request of $780 million is being withdrawn, reducing budget authority and outlays by $800 million this year.
Since 1953, 844,343 disaster loans have been disbursed by the SBA for a total of $9.3 billion, according to its officials.
Stockman also proposed tightening up the administration of disaster programs and increasing insurance rates for the subsidized portions of the national flood insurance program, reducing budget authority and outlays by $100 million in 1982.
Disaster officials said that if he wants to save money, the president will also have to declare fewer disasters and the government will have to be more strict in requiring states to kick in their share of disaster relief.
In 1950, when disaster assistance began, FEMA alone spent $2 million to $3 million, mostly to repair bridges damaged by floods, disaster officials said. By the early 1960s that figure jumped to $10 million to $15 million and temporary housing was being provided. Last year FEMA had a budget of $400 million and nearly every federal agency participated in some phase of disaster assistance.
In one case, Alaskan Eskimos were trained as crisis counselors at government expense (through what is now the Department of Health and Human Services) because no psychologists and psychiatrists near the storm-torn island villages understood the Eskimos' language, according to Dr. Calvin J. Frederick, chief of emergency mental health and disaster assistance.
During a blizzard in upstate New York four years ago, private firms were paid by the government to clear roads leading to barnyards because cattle wastes, piled up while the cows were confined inside the barns by drifting snow, threatened to contaminate the animals.
But all this may change. During Senate hearings on the proposed cuts, Stockman said the administration's objective is to "apply sound criteria to economic subsidy programs. We do not believe that the proposed changes will affect significantly disaster victims who are most in need."