Summary

The Environmental and Energy Study Institute (EESI) held a briefing about the bipartisan PREPARE Act, which seeks to improve our nation’s ability to withstand and recover from the impacts of extreme weather and reduce the financial impact on taxpayers. Over the past four years, the United States has been hit by 42 major weather disasters across 44 states, resulting in 1,286 deaths and $227 billion in economic losses. In its two latest High Risk Lists, the U.S. Government Accountability Office (GAO) cited extreme weather as one of the greatest threats to the federal government's balance sheet. To improve federal agencies’ ability to plan and prepare for extreme weather events, Rep. Matt Cartwright (D-PA) and Rep. Leonard Lance (R-NJ) reintroduced the Preparedness and Risk Management for Extreme Weather Patterns Assuring Resilience and Effectiveness (PREPARE) Act this year on July 23. The bill (H.R. 3190) currently has 18 cosponsors from both sides of the aisle.

Highlights

  • Joe Thompson, Assistant Director, Natural Resources and Environment, U.S. Government Accountability Office (GAO) explained that in its nonpartisan role as a government watchdog, GAO is concerned about financial risks to taxpayers and the federal government’s fiscal exposure. Topics for GAO studies and reports come from Congressional requests as well as legislative mandates. To assess the government’s fiscal exposure, GAO identifies risks and groups them into categories, which are listed on the Key Issues pages of the GAO website and compiled into the bi-annual GAO High Risk List.
  • In its 2013 High Risk List report, and again in 2015, GAO listed extreme weather as one of the highest risks facing the federal government. Specifically, GAO studied the fiscal impact of observed changes in the frequency and intensity of extreme weather and other climate-related issues such as sea level rise and temperature extremes.
  • The federal government’s fiscal exposure to extreme weather is viewed and analyzed through five lenses:
    • (1) Whether or not there’s a strategic plan for dealing with risks, including preparing and budgeting for weather-related disasters. Progress has been made, for instance with the development of agency-specific climate adaptation plans.
    • (2) How the government will protect its own assets from natural disasters, including public lands, research facilities, and the thousands of buildings it owns and operates. To reduce weather-related damages and costs, the federal government should make these assets more resilient and consider how they are—or will be—exposed to weather disasters or other events (e.g., navy bases that are exposed to sea level rise).
    • (3) How the government will manage the substantial fiscal exposure that results from the crop and property insurance it provides. The National Flood Insurance Program (NFIP) alone owes at least $20 billion to the federal government. The government needs to examine federal insurance programs to determine long-term fiscal exposure from extreme weather events and how it will manage these risks.
    • (4) How the government will provide better technical assistance to state, local and private-sector decisionmakers. Twenty-five percent of the $300 billion spent annually on transportation and water infrastructure comes from the federal government. Decisions by local actors building this infrastructure will affect the federal government’s fiscal exposure. The federal government should prioritize helping state and local decisionmakers increase their resilience to reduce future fiscal exposure.
    • (5) How the government can best provide disaster assistance. The federal government does not fully budget for weather-related recovery activities and disaster assistance. As a result, most of the money spent for extreme weather events is borrowed, creating a large fiscal exposure. The federal government should help state and local agencies plan ahead of time and invest upfront to control the impact of future extreme weather events. “We can either be controlled by the future, or [do what we can] to control the future," stated Thompson.
  • Daniel Greene, Legislative Fellow, Congressman Matt Cartwright (D-PA), noted that, despite extreme weather events being a grave concern and listed as a major threat by GAO, the federal government is not addressing the threat appropriately. Extreme weather events can affect many environmental and economic systems simultaneously, including agriculture, human health, natural ecosystems, and infrastructure.
  • In the past four years, there have been 253 presidential major disaster declarations, 42 events that each inflicted at least $1 billion in damage, over 1,000 fatalities, and $227 billion in economic losses.
  • Even if a district is not directly affected by an extreme weather event, it will still suffer some of the financial burden resulting from federal recovery spending. For example, Hurricane Sandy required $60 billion in recovery aid and, although it hit the Mid-Atlantic region, financial assistance came from taxpayers from all across the country.
  • The federal government should take every step possible to protect the public from this financial burden. For every $1 spent in disaster preparation and planning, the taxpayer saves $4 in recovery costs after an extreme weather event.
  • To address the lack of planning and preparedness, the PREPARE Act [reintroduced by Rep. Matt Cartwright (D-PA) and Rep. Leonard Lance (R-NJ) in July 2015] will create an interagency council to oversee the implementation of resilience and risk management initiatives and ensure their proper funding. The federal government will work with local and state planners to identify regional issues and facilitate the adoption of such initiatives. Finally, the bill recommends establishing regional coordination plans to promote greater coordination among regional, local, and sectorial decisionmakers and stakeholders.
  • Andrew Moylan, Executive Director, R Street Institute, highlighted the role his think tank plays in promoting natural disaster preparedness and response. The R Street Institute believes the federal government currently provides too many subsidies (primarily in the form of government-financed flood insurance) to coastal areas that are more prone to extreme weather and sea-level rise. The federal government should stop subsidizing at-risk infrastructure and should better inform people about the risks they face where they live.
  • R Street Institute works to enhance the role of the private market in preparing for and mitigating extreme weather events. The PREPARE Act would be a great, cost-effective, and simple way to better coordinate existing resources to reduce federal spending.
  • Although his organization promotes limited government spending, Mr. Moylan remarked that the R Street Institute would still support the PREPARE Act even if it involved modest spending because preparedness and resiliency pay off in the long-run and it would be a commonsense thing to do.
  • Moylan commended the bill’s third title (inventory for a regional coordination plan) because it would help designate the appropriate personnel responsible for disaster response. The PREPARE Act will allow for more multi-level and interagency collaboration, thus improving communication across government levels and sectors.

According to GAO, the government is at risk from extreme weather on several fronts: as an insurer, as a property owner, and as the leading provider of disaster aid. The federal government is the insurer of last resort for much of the nation's crops (through the Federal Crop Insurance Corporation), and it runs the National Flood Insurance Program, which is particularly exposed to weather-related losses. The federal government is also the nation's main property owner, with hundreds of thousands of facilities—many of which are at risk from extreme weather.

Building off GAO's findings, the PREPARE Act creates an interagency structure to ensure that all agencies implement resiliency and risk management priorities; directs agencies to work closely with local and state planners to facilitate the adoption of best practices; and instructs agencies to establish comprehensive regional coordination plans to react quickly and effectively when weather disasters strike. Because the legislation calls for better intra- and interagency planning, it does not require any new spending. On the contrary, it could save billions of dollars in the long run, by helping citizens and communities better prepare for extreme weather and by better coordinating federal action.