The Pitfalls of the Reforming Disaster Recovery Act | Citizens Against Government Waste

The Pitfalls of the Reforming Disaster Recovery Act

The WasteWatcher

At a hearing entitled “Disaster Recovery Assistance-Authorization of the Community Development Block Grant-Disaster Recovery Program,” the Senate Committee on Banking, Housing, and Urban Affairs considered the benefits and pitfalls of the Community Development Block Grant-Disaster Recovery (CDBG-DR).  Several committee members and witnesses at the December 15, 2021, hearing claimed that the passage of S. 2471, the Reforming Disaster Recovery Act, would help to reduce waste, fraud, and abuse and improve effectiveness, equity, and recovery in the CDBG-DR program.  One witness argued that making the program permanent would increase duplication and bureaucracy and give the federal government more control and authority over state responsibilities.

First established in 1993 to supplement Federal Emergency Management Agency (FEMA) and Small Business Administration (SBA) disaster recovery funds, the CDBG-DR program has contributed $90 billion to the states and localities though the Department of Housing and Urban Development after a presidential disaster declaration and an allocation of funding from Congress.  The program has expanded over time as natural disasters once considered to be state and local matters have increasingly garnered responses from the federal government.  As the block grant expenditures have expanded, so have reports of delayed implementation and the potential for widespread fraud.

Sponsors of S. 2471 claim that making the program permanent, rather than subject to presidential disaster declarations and congressional authorization on a disaster-by-disaster basis, would solve these longstanding problems.  As Sen. Pat Toomey (R-Pa.) observed, however, the bill would codify a system rife with waste, fraud, and abuse.  In addition, President of Opportunity Ohio Matt Mayer testified that one of the problems with the CDBG-DR program is that it forces interior states to subsidize the long-term recovery of coastal states.  Rather than codifying CDBG-DR as a permanent program, the federal government should reestablish FEMA as the lead agency for federal emergency management and retain authority for the states to determine where CDBG-DR funds should be spent. 

The Reforming Disaster Recovery Act is another “well-intended” bill that would supplant state resources and undermine state authority during and after natural disasters.  Rather than establishing the “bridge between recovery and long-term planning and housing” promised by proponents, the proposed legislation would increase duplication and overlap in federal disaster assistance and fail to reduce waste, fraud, and abuse.   The CDBG-DR program should not be expanded; it should be restored it to its original limited purpose with fewer opportunities for corruption and waste or eliminated as part of a more genuine and effective effort to consolidate disaster relief programs.

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