More than a decade of budget cutting and a rash of government job vacancies are taxing Washington’s ability to cope with a one-two punch of epic storms.
The fiscal belt-tightening has coincided with an American migration to job-abundant coasts, where people are building bigger houses and taller condos while shunning flood insurance. Storms, fires and other disasters are hitting with more frequency and fury, forcing the federal government to cope with overlapping catastrophes.
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Over the weekend, federal first responders were decamping from the Hurricane Harvey havoc in Texas to head for Florida. Hurricane Irma is hitting the state just as rebuilding aid for last year’s Hurricane Matthew begins arriving from Washington.
“After years of austerity politics, it’s not clear that the government is adequately staffed or prepared to address the catastrophe on the Gulf Coast and whatever happens in Florida,” said Joe Brusuelas, chief economist at McGladrey, a consultancy. “Priorities need to be set.”
Harvey and Irma could be a breaking point. At $556 billion, the Houston metropolitan area’s economy is bigger than Sweden’s. New Jersey could easily fit inside the region’s sprawling footprint, where Harvey dumped 34 trillion gallons of water, as much as the three costliest floods in Texas history combined. The Harvey response alone eventually could double the $136 billion in government aid spent after Hurricane Katrina flooded New Orleans.
And as of Friday, an estimated $1.73 trillion worth of real estate was in the path of Irma’s hurricane-force winds, according to the University of Wisconsin’s Cooperative Institute for Meteorological Satellite Studies.
Even if the federal government opens its wallet, it’s not evident it has the long-term capacity for multiple mobilizations. On Friday, as President Donald Trump signed a bill approving more than $15 billion in storm aid, Hurricane Jose churned off the coast of Puerto Rico. In the West, wildfires blazed in Oregon, Washington, Montana and California.
“The federal government should be able to walk and chew gum at the same time,” White House homeland security adviser Tom Bossert told reporters. “I’m pretty comfortable in our ability and capacity as leaders and also as institutions.”
But while Congress can appropriate emergency aid, the federal government’s catch-as-catch-can approach to disasters and the austerity demanded by fiscal conservatives have given short shrift to preventative measures and emergency-response training.
In the long run, that increases costs to taxpayers and makes disaster recoveries dicier as key agencies such as FEMA and the Department of Housing and Urban Development deal with shrinking resources.
On Sept. 1, HUD put a temporary stop to new mortgage insurance on apartment construction in Houston as it mobilized staff from across the country to assess damage to more than 50,800 units in the Harvey zone, including nearly 21,000 units of assisted housing.
At FEMA, funding woes have left flood maps out of date and a precarious insurance program is running on fumes. Last week, the agency was down to its last few days’ worth of emergency funding. Treasury officials told lawmakers they wouldn’t be able to pay claims to Harvey victims without an immediate increase in the debt ceiling.
With the National Flood Insurance Program nearly $25 billion in debt, FEMA this year took the pricey step of paying the private market to backstop the fund: The agency bought a $150 million reinsurance policy to offset about $1 billion in risk at a time when government borrowing costs are near historic lows.
Harvey alone could blow through that reinsurance. With about 30 percent of federal flood insurance policyholders in Florida, Irma could be even more expensive.
“There’s simply not enough bandwidth or resourcing that can handle the stress and strain of what we’re facing,” said Anita Chandra, a senior policy researcher at the nonpartisan RAND Corp. “Passing off to later was never smart, but it’s really not smart now.”
The disasters are arriving with greater frequency. Counting Harvey, the U.S. this year has experienced 10 weather-related events each costing $1 billion or more. The country averaged fewer than six big-dollar storms, flood, fires and freezes a year between 1980 and 2016, according to the National Oceanic and Atmospheric Administration. Between 2012 and 2016, however, weather catastrophes occurred almost twice as often. This year, the Trump administration rolled back Obama-era proposals on climate change and flood resilience.
Still, property owners have come to expect that the government will deliver after a disaster. Budgeting for such events would avoid “unwelcome surprises or having to make substantive financial outlays under duress,” reinsurance brokerage firm Guy Carpenter wrote in a 2015 report to Congress. The firm has warned of “significant and systemic economic risk” to governments that are underinsured and ill-prepared for disasters such as storms and earthquakes.
“There are two kinds of insurance: You can pre-fund the insurance on things like flood-control systems and better sewers to get rainwater out and shelters prepared,” said Douglas Holtz-Eakin, president of the American Action Forum. “The other kind of insurance is, ‘OK, it’s happened, now write a check to cover it.’”
Economies typically bounce back quickly from disasters, but the government footstep lingers for years. Before the Harvey relief bill even hit the president’s desk last week, HUD staffers were dusting off language from an old federal register notice, which they’ll adapt and rush to publish in the coming weeks to get rebuilding money flowing as quickly as possible.
Congress gave the agency $10 million to pay for travel and short-term staff to administer the $7.4 billion in aid it will start distributing in the coming months. But managing that money is a long-term project and disasters are piling up. As its budget has shrunk, HUD’s community development office is overseeing a growing portfolio of disaster funds dating back to Sept. 11, 2001.
The housing agency has a deep bench of experienced career employees, but key positions, including the deputy secretary, are vacant. Trump’s nominee for the No. 2 slot, Pam Patenaude, led the agency’s Katrina effort and has broad support but has been sidelined by Senate Democrats in the midst of back-to-back disasters.
“HUD is understaffed and draining resources,” said Jerry Howard, chief executive officer of the National Association of Home Builders. “It’s going to be really tough.”
As Irma bore down, Alan Rubin was boarding up his house in Kings Bay, Fla., south of Miami, and remembering when Hurricane Andrew hit in 1992. A self-described “master of disaster,” the Blank Rome lobbyist makes a living advising municipalities to prepare for the worst.
If Irma lives up to its threats, neighbors’ boats will be in living rooms, he predicted.
“We’re faced with potentially three natural disasters,” he said. “The government isn’t prepared at this particular time to keep writing checks. It won’t work.”
Zachary Warmbrodt contributed to this story