Committee for a Responsible Federal Budget

Let's Pay for Disaster Funding, but Also Budget For It

Aug 31, 2011 | Budget Process

The destruction and devastation caused by Hurricane Irene is of serious concern, and addressing it will come at a real cost. Yet even while both parties agree that more federal money will be necessary to help pay for relief and recovery, some have argued that these additional costs must be offset through other spending cuts.

We agree with this premise. Federal funds will be a crucial element in helping some communities recover from flooding, wind, beach erosion, and other types of damages, but the money isn't free.  Budgeting is about priorities, and if disaster relief is worth the cost (as we believe it is), it's also worth paying for. 

But there's a larger challenge here than finding ways to pay for the federal response to Hurricane Irene. We need a better way to budget in advance for all types of national disasters and emergencies. True, we don't know when the next hurricane, tornado, wildfire, earthquake, or other natural disaster might strike, but in a country as large as the U.S. there are sure to be a constant supply of such occurrences. 

Disaster spending can at times be grossly underfunded, and emergency funding is allocated on top of the funds lawmakers have already accounted for in each year's budget. This is no way to prepare for emergencies.

In the recent debt ceiling deal, emergency spending was defined and affected. First, in the deal, disaster spending, that is non-war, cannot exceed the previous ten year average, excluding the highest and the lowest. Additionally, the bill codified what emergency spending is. The law says that "emergency" is when new budget authority or outlays for the prevention or mitigation response to a loss of life or property, a threat to national security and is unanticipated, which means that it is sudden, urgent, unforeseen and temporary.

One way to proactively budget for emergencies comes from the recommendations of the Peterson-Pew Commission on Budget Reform in their report Getting Back In the Black.

In the report, they recommend lawmakers:

Change the process of budgeting for emergencies, annually outlaying to an emergency reserve amounts sufficient to pay the expected average annual cost of emergencies, with strict rules governing the use of the emergency reserve.

Now is the time for real fiscal reform, and improving the misguided way we budget for emergencies is just one of the concrete ways we can.