Imperfect Calculus for the Value of Lives

Nearly three years after it was created, the Sept. 11 Victim Compensation Fund has finished its work. About 2,880 families that lost a loved one on Sept. 11 (97% of those eligible) signed up for tax-free public compensation; in addition, more than 2,600 physical-injury victims received checks. The total cost to the taxpayers was more than $7 billion, a unique, unprecedented response by the American people to fellow citizens in need (as well as undocumented workers and foreign nationals from 75 nations). I was the administrator of the program, appointed by the president two months after the attacks to oversee the fund and to navigate both the moral and practical pitfalls that seemed sure to arise. It was an enormous and difficult task, and I found myself awed by the randomness of death and the imperfect nature of any solution.

In hindsight, I believe the work we did brought out the best in the American character. But it is clear that the process -- established by a federal statute hastily enacted within weeks of the tragedy -- also raised important and fundamental questions for the American people.

First, was the Sept. 11 Victim Compensation Fund a good idea? I have agonized over this question; clearly, the issue is a close call. The program was structured such that families agreed not to sue the airlines, the World Trade Center or others allegedly at fault and in return would be allowed to apply for federal aid. Yet no such program exists for the families of the Oklahoma City bombing. Nor will a Treasury check be sent to those who lost a loved one in the attacks on our embassies in Africa and the U.S. destroyer Cole or even in the first World Trade Center attack, in 1993. In our egalitarian democracy it is hard to justify singling out one group of victims for special treatment.

From the perspective of the ineligible victims, any distinction rings hollow. But not so from the perspective of the nation. The Sept. 11 Victim Compensation Program was a unique response to an unprecedented historical event, a foreign attack on domestic shores causing the deaths of thousands. Sept. 11 stands with Pearl Harbor, the American Civil War and the assassination of President Kennedy in its devastating effect on our national life. One response from the American people was to rally around the victims and go to their aid. The 9/11 attack was different, and this difference, in my view, justifies the program.

Second, even if the program can be justified, did Congress do the right thing in requiring that each eligible family receive a different amount of compensation depending on the victim’s estimated future earnings? Or would it have been better, and more equitable, for all to receive the same payment? This too is a close call. Every day throughout the United States, juries take into account the financial circumstances of victims. The stockbroker injured in a fall receives more than the waiter or laborer injured in an auto accident. This is the American way. Even in such a sacrosanct entitlement program as Social Security, benefits are based upon what you earn.

But extending this approach to a public compensation scheme is problematic. Such economic distinctions fuel divisiveness among the very families seeking assistance. Why should the firefighter’s family receive less tax-free compensation than the family of the banker, especially when the money is supposed to reflect the compassion and generosity of the taxpayers? Do we as a nation really view these people so differently?

The fund also required that one person alone -- the fund administrator -- gaze into a murky crystal ball and try to predict what the victim would have earned over a lifetime. Distinguishing hard fact from mere speculation would indeed tax the wisdom of Solomon. Asking a single person to do these calculations -- to be both economist and sage -- guaranteed an emotional challenge by 9/11 families that the victim’s life had been undervalued. And many families did argue exactly that.

But if Congress had required that every eligible family receive the same compensation, would that have been fairer? And how much compensation would Congress provide? Flat payments engender their own controversies. One size rarely fits all.

Perhaps the best solution -- however imperfect -- would have been a series of tiered payments, with eligible families being classified in three or four groups depending upon their range of incomes. Not exactly the same compensation for everybody, but, rather, an attempt to avoid the practical and philosophical problems associated with the imperfect calculation of individual awards.

Finally, there remains the obvious question: In the unfortunate event of another attack by foreign terrorists, should Congress enact another public compensation program? The Sept. 11 is now an established precedent; will Congress be compelled to do the same thing again? I doubt it. The Sept. 11 fund was unique to time, place and circumstance. Of course, some unforeseen, monstrous attack may require a similar response. But even then it is likely that any compensation scheme will differ markedly from the tailored, individualized awards that characterized the fund. But for now at least praise is due the Sept. 11 fund, a unique experiment in American democracy.