NCPA - National Center for Policy Analysis


September 16, 2005

The federal government's track record on spending after disasters is a disaster in itself, says USA Today. Though ample amounts of federal money are needed, a spend-now, plan-later approach is not the answer, except for urgent needs such as caring for evacuees. This creates the potential for waste and leads to bad decisions on rebuilding.

For example:

  • About $62.3 billion has been appropriated for Katrina aid and recovery; however, contracts are being awarded on a "no-bid" basis and the planning for a successful rebuilding campaign is nowhere to be found.
  • According to the Department of Homeland Security's inspector general, $31 million poured into Miami after Hurricane Frances last year, even though that storm passed well to the north.
  • The Associated Press uncovered examples of companies as far away as South Dakota receiving loans for businesses hit on 9/11.

Lawmakers have a fine line to walk: on one hand they should not encumber federal money in so much red tape that they hamper aid; on the other, they must realize these huge logistical tasks require careful planning and competent decision making.

USA Today says this woeful record argues for the immediate creation of a centralized oversight body headed by a reconstruction czar of national stature. This body would decide which tasks are so critical they merit no-bid contracts and which can wait for a more cost-effective and transparent process. It would also have to begin addressing some thorny issues, such as levee improvements, whether the government should help rebuild uninsured facilities, the role of private insurers and whether parts of New Orleans should be rebuilt at all.

And still, the question of who will pay remains. USA Today believes the usual solution of passing the costs along to our children through borrowing would be a further exercise in irresponsibility.

Source: Editorial, "Feds Throw Money at Gulf, but Where's the Oversight?" USA Today, September 13, 2005.

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