Next time the television news is full of flustered vacationers and coastal residents fleeing another massive hurricane, just imagine if this caption were to scroll across the bottom of the screen:
"This disaster is brought to you in part by government policies."
In the last two decades, about 40% of federal flood insurance payments have gone to a tiny fraction of chronically flood-prone properties in places such as the Gulf Coast states (menaced last week by Hurricane Earl) and North Carolina's Outer Banks (damaged in late August by Hurricane Bonnie).
Now the government is under pressure from critics who contend that flood insurance encourages foolhardy people to build in exposed locations and that no-strings-attached relief has grown too costly.
Critics say federal generosity helps perpetuate a cycle of natural destruction and subsidized reconstruction. The government becomes an unwitting accomplice to risk-taking that only ends up costing taxpayers money.
" 'Facilitator' is an excellent term," said Orrin Pilkey, a coastal geologist at Duke University. The "major villain" in the hurricane-prone parts of the country, he added, is a boundless human passion for the seashore. "People are in heat to live near the water."
Looking to staunch the flow of disaster dollars, federal officials are considering limits on what the government will rebuild. "It's pretty hard to justify locating in a flood plain as a public policy," said Sam Peltzman, an economist at the University of Chicago Business School.
But getting cheap with disaster relief is hardly a political winner. Making disaster victims whole is a cherished American tradition and, given demographic trends, not likely to recede.
For example, the number of people living in the path of hurricanes is projected to double to 72 million by 2010. They're not the only ones who count on Washington to be a guardian angel. So do Midwesterners near major rivers and Californians living on seismic faults.
Indeed, the government poured more than $10 billion into Southern California after the 1994 Northridge earthquake.
Over the years, federal relief programs have grown willy-nilly and continue to run on automatic pilot without any comprehensive assessment of the government's risk exposure. There are no fixed rules for a presidential disaster declaration, which starts aid flowing.
Consider the flood insurance program administered by the Federal Emergency Management Agency. Homes can be insured for up to $250,000; furnishings and belongings for up to $100,000. The average annual premium: $320.
According to data ferreted out by the National Wildlife Federation this summer, nearly 40% of flood insurance payments from 1978 to 1995 went to about 2% of properties that repeatedly flood.
Among them were about 5,600 properties whose owners received cumulative payments in excess of what their homes were worth. In Houston, a single house valued at $114,480 was flooded 16 times from 1989 to 1995. The owners collected payments totaling $806,590, about seven times the value of their home. In California, Sonoma County had 544 properties that repeatedly flooded; the city of Malibu had 125.
David Conrad, a senior policy analyst for the wildlife federation, said that for years the information on these flood-prone properties was closely held by FEMA. Now that it's out in the open, the agency is working on recommendations to Congress for controlling the costs. The conservation group believes the government should offer to buy some of the homes and let the land revert to nature.
"We need to move to greater sharing of responsibility at all levels so we aren't inducing development into risky locations," Conrad said. "It's an unintended consequence."
Flood insurance isn't the only disaster program receiving scrutiny.
FEMA also runs a "public assistance program" that pays for local communities to rebuild their infrastructure after a disaster. "Infrastructure" originally meant things like roads and bridges. But in 1974, Congress expanded that to include recreational facilities, reasoning it would help restore "normalcy" to ravaged areas.
As a result, the well-to-do California community of Indian Wells, near Palm Springs, received $872,000 from the feds to repair a golf course damaged in 1993 flooding. According to the FEMA inspector general, the city-owned golf course was running a surplus of about $1 million a year and had its own disaster reserve.
The inspector general also criticized $88 million in federally funded repairs to the Los Angeles Coliseum after the Northridge quake and $5.7 million to fix the quake-damaged scoreboard at Anaheim Stadium. Such revenue-generating facilities should not be repaired at federal expense, he said.
FEMA Director James Lee Witt, who has built a reputation as an effective administrator, rejects the view that government, as insurer and rebuilder, is a facilitator of risk in disaster-prone areas.
"I would challenge you on that," Witt said. "Critics don't see the good things about [the flood insurance program]. Communities that join the program have to adopt stricter building codes. If they want to be in this program, they have to build stronger and better."
But Witt acknowledges that he is concerned about the balance between incentives and risks. He plans to make recommendations to Congress this fall on how to tighten things up so the government doesn't keep bailing out people whose homes are always flooding.
The cost of federal disaster relief has skyrocketed during the '90s--partly because of calamities like the Northridge quake and Hurricane Andrew and partly because of program expansions and, according to critics, lack of oversight.
Relief responsibilities are spread out across several agencies. In addition to FEMA, the Small Business Administration makes low-interest, long-term loans to homeowners, renters and businesses in disaster areas. The Army Corps of Engineers tries to prevent disasters, and the Agriculture Department helps farmers with crop relief. But according to the congressional General Accounting Office, an up-to-date accounting of combined disaster spending by these agencies does not exist.
Sen. Christopher S. Bond (R-Mo.) has pressed for tighter controls on disaster spending, without much luck. Bond believes the criteria for the president to declare an emergency should be spelled out in law. And he wants to restrict the kinds of rebuilding that FEMA can pay for. So far, all he's been able to get is committee approval of an amendment that would bar the agency from fixing golf courses.
That illustrates the political difficulty of clamping down on disaster relief: No legislator wants to choke off a source of funds that could be available to their constituents at a time of great need. For example, Bond believes the U.S. paid too much to repair and reinforce Los Angeles area hospitals after the Northridge quake. But to California senators, getting nearly $900 million for the hospitals was a major accomplishment.
Howard Leiken, a senior administrator at FEMA's flood insurance program, said disaster programs can only be changed slowly.
"You can't argue that people should be left on their own," Leiken said. "If you want solutions that are viable politically and socially, it gets complicated. Traditionally, people have not been cut loose" in the wake of disasters.