A note on this blogs format - I will not hide my drafts until they are ready. All my writing will be displayed as soon as it's down in bits and bytes. Posts will be labeled Draft and Final according to my view on the topic.

Wednesday, December 3, 2008

Urban discrimination in the Stafford Act


Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act) is the law of the land for federal emergency management and disaster relief. The act not only authorizes FEMA's existence, but it also lays out the scope and particulars of the agency and how federal resource may be allocated for national, state, and local response.

There are many problems with FEMA. Some of them are due to personnel, others political, but today's FEMA rant is about policy.  When a disaster hits you and destroys a significant portion of your livelihood and home, the last thing you're really worried about is FEMA's paperwork. All you want to do is recover from the disaster as quickly and wholistically as possible. You don't care where the money comes from, all that matters is that you're able to afford a motel room, some gas for your car, and the plywood and contractors to fix your roof.  FEMA, through the Stafford Act, is even obligated to assist you in those efforts.

The immediate needs- things like food, water, baby formula, and medicine fall into the category of "critical needs" while the longer term fixes to your house, intermediate sheltering, and car repairs/replacements fall under FEMA's Individual and Households program.  The Stafford Act places a cap on combined aid (critical needs+Individuals and Households) going to households at a flat ceiling that is adjusted annually by the National Consumer Price Index (CPI-U) that is calculated by the United States Department of LaborBureau of Labor Statistics.

In 2000, FEMA's cap on individual assistance was set at $25,000 to be adjusted annually based on the National Consumer Price Index. This has resulted, in October 2008, to an adjustment for assistance to $30,300 per household. I have no argument with the base sum of money available via grant. That's not my complaint and it is a valid policy option to have a low grant total so as to incentivize the population to better insure themselves against risk. After more study of the issue, I may ask for a base increase to the funding amount.  That's neither here nor there.

FEMA is in the recovery service business.  By pegging the adjustment of the cap for individual assistance to the National CPI as opposed to the more local Regional or even more local Metropolitan Statistical Area CPI, FEMA is effectively providing more recovery for areas that had been lagging indicators for the CPI. They are able to afford moregoods and services with which to recover as compared to an urbanized environment.  For any absolute value enforced across the board, the urban dweller loses as they have less purchasing power.

FEMA should focus on providing equity in recovery services and stop focusing on dollar for dollar parity.

But I guess this is what happens when the Dakota's get four desks in the Senate.

NOTE - I am working on some calculations to show the disparity between the outliers taken into account by the CPI all urban areas vs. regional vs. Metropolitan Statistical Areas but I'm having some difficulties. I can't seem to recreate FEMA's accounting that created the new $30,300 threshold. The closest I've gotten is $30,494 assuming I perform the calculations using September to September as the base fiscal year.  I'll be re-examing this in the next few days to try to nail down the discrepancies.

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