Disaster Assistance

Information on Federal Costs and Approaches for Reducing Them Gao ID: T-RCED-98-139 March 26, 1998

This testimony discusses several approaches to lowering the costs of federal disaster assistance. For several years, Congress has expressed concern about the rising costs of federal disaster assistance provided by the Federal Emergency Management Agency and other agencies. GAO discusses (1) the components and the magnitude of federal disaster assistance costs and (2) the approaches that could potentially lower these costs in the future.

GAO noted that: (1) federal disaster assistance costs billions of dollars annually; (2) according to data compiled for the Senate Bipartisan Task Force on Funding Disaster Relief, federal agencies obligated about $119.7 billion (in constant 1993 dollars) for disaster assistance during fiscal years (FY) 1977 through 1993, the majority of which was for post-disaster assistance; (3) the Federal Emergency Management Agency accounted for about 22 percent of this amount, with the remainder spread across many federal agencies, including the Small Business Administration, the Army Corps of Engineers, and the Department of Agriculture; (4) the federal government provided assistance for an average of nearly 37 disasters or emergencies annually from FY 1977 through FY 1997; (5) the growth in disaster assistance costs in the 1990s has been attributed to a number of factors, including: (a) a sequence of unusually large and costly disasters, for which the federal government has occasionally borne a larger-than-usual share of the costs; (b) a general increase per year in the number of presidential disaster declarations; and (c) a gradual expansion of eligibility for assistance, through legislation and administrative decisions; (6) approaches for lowering federal disaster assistance costs include: (a) establishing more explicit or stringent criteria for providing federal disaster assistance; (b) emphasizing hazard mitigation through various incentives, and (c) relying more on insurance; (7) within these approaches, specific proposals vary; and (8) the extent to which implementation of these proposals would lower the costs of federal disaster assistance is unknown.

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