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Why Ending FEMA Will Improve Disaster Response

November 18, 2014 in Economics

By Chris Edwards

Chris Edwards

Under the U.S. Constitution, the powers delegated to the federal government are “few and defined,” as James Madison noted in Federalist 45, while the powers of the states “will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people.”

That decentralized structure of government has served America well, but it has been rapidly eroding as Washington grabs ever more power over domestic policy. One troubling area of federal expansion is the preparation and response for natural disasters, such as hurricanes. The interventions of the Federal Emergency Management Agency (FEMA) and other federal agencies are increasingly displacing the activities of the states and private organizations.

In decades past, individuals, businesses, and charities took the lead on disasters. After the devastating San Francisco Earthquake of 1906, for example, the private response was huge. Aid poured in from across the country, with millionaires such as Andrew Carnegie making major contributions. Southern Pacific Railroad evacuated 200,000 people from the city at no charge. Home-products company Johnson and Johnson rushed in free supplies. Insurance companies paid out the vast majority of claims for the 90 percent of all property owners who had policies. The Red Cross and other charities also provided relief.

In recent decades, these sorts of private responses are being replaced by federal intervention. President Jimmy Carter created FEMA by executive order in 1979, and Congress created the current legal structure for disaster relief in the 1988 Stafford Act. The Act allows for federal intervention only if disasters are of “such severity and magnitude that effective response is beyond the capabilities of the state and the affected local governments.” But the government often violates that limit by intervening in emergencies that could be handled locally.

The number of federal disaster declarations — which authorize federal spending — has soared from an average of 29 a year in the 1980s to 139 a year so far in the 2010s. FEMA spending has grown from an average $0.7 billion a year in the 1980s to $13 billion a year in the 2010s. The huge and often wasteful federal spending after Hurricane Katrina in 2005 and Superstorm Sandy in 2012 could become the norm as politicians clamor for subsidies and ignore constitutional and statutory limits on federal power.

In a new Cato Institute study, I describe problems caused by growing federal intervention:

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