Know-It-All Feds

With Washington a ghost town for the end-of-year holidays, the Inspector General of the Department of Homeland Security quietly released the results of a devastating investigation of the Federal Emergency Management Agency citing severe management and financial problems that documented its deeply flawed response to Hurricane Katrina.

The report by HHS Inspector General Richard Skinner found “an unprecedented opportunity for fraud, waste and abuse” in FEMA’s and DHS’ loose administration and oversight of FEMA grant and contract programs, which represent the overwhelming proportion of their responsibilities. Earlier, of course, Michael Brown, the head of FEMA was forced to resign in the face of the obvious failures of the Federal response.

During the same slow news days, the Small Business Administration Inspector General, Peter McClintock, issued a report on its Katrina loans for adversely affected businesses. He found that for 85 percent of the loans he could not verify that the firms qualified for the loan. Many companies told investigators they did not know the loans were for Katrina and claimed they were not told that this was a condition.

Did any of this humble Federal attitudes regarding emergencies following Katrina? As Hurricane Wilma approached in October, the head of the newly-established Northern Command, Adm. Timothy Keating, told Congress that active duty forces should be given complete authority for responding to catastrophic domestic disasters, apparently following a statement by President George W. Bush that such an approach should be investigated.

Florida Gov. Jeb Bush had other ideas. “I can say with certainty that federalizing emergency response to catastrophic events would be a disaster as bad as Hurricane Katrina. If you federalize, all the innovation, creativity and knowledge would subside.” As the reporting at the time demonstrated, the security controls instituted by FEMA in the early hours after Katrina severely interrupted both local and voluntary efforts to assist the victims, including efforts offered by his state of Florida.

A new Federal procedure, the National Incident Management System, was created by President Bush following 9/11 to force federal, state and local officials to work together, presumably under a designated Principal Federal Officer. As Wilma approached, DHS fought with local officials to allow Secretary Michael Chertoff to name one of his Coast Guard uniformed subordinates to lead response efforts. Florida National Guard chief Gen. Douglas Burnett later expressed his feelings at the time, “Did we need a three-star general from Texas to come to direct our response, No we did not.” At the critical October 20th video-conference meeting, however, Florida state FEMA head, Craig Fugate, announced the NIMS committee but staffed it with a majority of Florida officials and declared its chairman to be Gov. Bush, outmaneuvering the Feds who were not ready to fight the president’s brother.

Where was Congress as these critical issues of federal verses state power were being discussed? It did vote to spend $63 billion but then left matters pretty much up to those spending it. Even FEMA, which after all is primarily a grant-making agency with no particular expertise in street-level emergencies, pretty much redirected the funds to state, local and private contractors. Even DHS’ management experts are program officers without direct emergency responsibilities, which are overwhelmingly local, voluntary, state and National Guard staffed and operated. There was some discussion of freeing FEMA from DHS’ heavy-handed oversight but that soon died out in the flight to recess.

Congress’ only direct response was to haul the private Red Cross, which is extensively relied upon by Federal officials in the light of their few direct resources, before the Senate Finance Committee. Rather than clean its own government’s act, Sen. Charles Grassley, chairman of the powerful committee, opened an investigation into Red Cross’ management structure.

Ever since the New Deal, the national government has been declaring that some domestic problem exists and that no one else can solve it. From dam maintenance, to health care, to education, to toilet-bowl intake levels, to garbage, the Feds simply assumed responsibility. When things got worse, as they often did under centralized management, the response was always to demand additional federal powers.

That old snake oil is becoming less palatable as the most crucial and largest federal programs fail in ways the public can no longer ignore. A national disaster of the scope of Katrina cannot be hidden as so many of the government failures are every day. Even 9/11 was a spectacular failure of the basic government function to protect its citizens against attack and murder. Rather than focus on its basic functions and transfer the rest back to the states, localities and private resources as the Constitution intended, the Feds continue the know-it-all poise and try to run everything.

The results show. The final data are just in for 2004 and the Feds were bragging spending was up “only” five percent. It has been rising at seven percent so one can be thankful for small favors. No one mentioned the preliminary 2005 figures showed an eight percent spending hike, although 2006 will probably be somewhat smaller. The 2004 final increase still totaled $2.2 trillion, $1 trillion of which was for entitlements, the later of which will explode over the next few years. Unfortunately, no one in Washington will even raise the subject for fear of elderly votes.

As futurist Joel Garreau recently noted half in jest, the coming bankruptcies—and what is better evidence of Federal failure-- of the two largest federal entitlement programs, Medicare and Social Security, will require the federal government to transfer other programs back to states and people, perhaps vindicating the long-neglected 10th Amendment. Federalism would have triumphed through the back door but taxpayers cannot afford to be choosey.

Donald Devine, Editor.

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