Disasters become big chunk of U.S. deficit

As Congress moves to prepare another emergency funding bill to help people hit by Hurricane Michael, budget watchers are crying foul. 

The level of funding needed to cover disasters each year, they say, is largely predictable, but Congress only includes a fraction of that funding in its annual appropriations.

The rest of the money provided nearly every year to pay for the nation’s natural disasters just adds to the deficit, regardless of what promises or commitments the government has made to keep its spending down.

{mosads}“Disasters aren’t anomalies — they are unfortunately a sure thing, and they are getting more costly every year,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

She says funding to pay for the disasters should be part of a regular budget process, or the nation will unsustainably add to its debt.

Congress approved $15 billion last September to help pay for the damages from Hurricanes Harvey and Irma. The following month, after Hurricane Maria devastated Puerto Rico, it approved another $36.5 billion. It went on to approve about $90 billion of aid in additional aid in February.

The total of $140 billion over a six-month period is nearly triple the amount appropriated for the Department of Homeland Security, and about double the Education Department’s budget. 

It also amounts to 18 percent of the total deficit for fiscal year 2018.

Conservatives have long argued that disaster relief should be offset with spending cuts. 

“Hurricane aid shouldn’t be added to the debt. That’s akin to going to the Emergency Room after an injury, putting the charges on a credit card, and then pretending that the Visa bill is never going to arrive,” Rep. Mark Walker (R-N.C.), chairman of the Republican Study Committee, wrote in a Wall Street Journal op-ed on the subject.

But there are several reasons that the problem is likely to only get worse.

The first is that natural disasters are becoming more frequent and more costly.

According to the National Oceanic and Atmospheric Administration (NOAA), Harvey, Irma and Maria were three of the top five most costly hurricanes in the nation’s history, and all of them occurred in just one year.

From 1980 to 2017, there were an average of 6 events each year that wreaked over $1 billion in damage, adjusted for inflation. But from 2013 to 2017, the average was 11.6 events per year. As of last week, 2018 already saw 11 weather events that cost over $1 billion.

The second reason has to do with the current system for allocating disaster funds.

When Congress adopted the Budget Control Act in 2011, which set limits for annual defense and non-defense spending, it included a provision to allow Congress to ignore the spending limits to pass disaster relief.

Using a formula that averages the cost of certain disaster spending over the previous years, Congress is allowed to allocate a certain level of disaster relief that does not count toward the caps.

That policy had an upside and a downside, according to studies by the Congressional Research Service.

On the upside, Congress could set a healthy amount at the beginning of the year for the Disaster Relief Fund (DRF), the main fund that the Federal Emergency Management Agency (FEMA) uses for disaster relief. 

“By making the majority of the DRF eligible for funding outside discretionary spending limits, the BCA removed that incentive, and it became easier to request and appropriate more budget authority for the DRF on an annual basis,” the CRS report noted. 

More money in the DRF meant there was money ready in the immediate aftermath of a hurricane or wildfire, and those affected didn’t need to wait for Congress to act immediately.

On the downside, the policy meant appropriators wouldn’t have to grapple with the costs of annual disasters when they consider how to spend money each year, because the cost largely doesn’t count toward their budget limits.

When big storms such as 2012’s Hurricane Sandy struck, exhausting the allowed level of off-cap funding, Congress found a workaround anyway. 

“In FY2013, Congress provided $41.6 billion in supplemental disaster assistance in the wake of Hurricane Sandy in excess of the allowable adjustment — assistance that was designated as emergency spending rather than disaster relief —  and therefore not included in the annual disaster relief total,” a separate CRS report noted.

Budget watchdogs say it would be better to include the expected amount of disaster cost in the caps each year, and leave a healthy amount of extra room.

“We need a better way to budget in advance for all types of national disasters and emergencies,” the CRFB wrote in a post last year. 

But there’s another reason Congress may not soon want to amend the way it pays for disaster relief: politics.

Politicians running for reelection want to show their constituents that they are actively rushing to their relief in the aftermath of a devastating disaster. Voting on a new set of funds to help is an easier sell than simply telling constituents that it’s all been taken care of already.

“FEMA will use its resources immediately available but we’ll have to come back and do an emergency funding bill to give FEMA more money,” said Florida Sen. Bill Nelson (D), who is fighting a tough reelection campaign against governor Bill Scott, in an interview with Sinclair this week. 

Senate Finance Committee Chairman Richard Shelby (R-Ala.) said that there’s little question that more funding will be coming down the line, despite the $25 billion level of funding currently in the DRF.

“We will respond at the right time, the Congress will. We always do. For earthquakes, for droughts, tornadoes, I’m going to do everything I can. We won’t turn our backs on our own people,” he said.

Sylvan Lane contributed to this report.