Financial and Political Challenges for FEMA

MS. DIANE REHM

10:06:54
Thanks for joining us. I'm Diane Rehm. Spring tornados, devastating droughts and an East Coast earthquake have been costly for FEMA. The Federal Emergency Management Agency has only about $800 million on hand. Following Hurricane Irene's destruction, debate over disaster relief is front and center in Washington spending battles.

MS. DIANE REHM

10:07:30
Joining me here in the studio to talk about the financial and political challenges facing FEMA: Ed O'Keefe of The Washington Post, Jane Bullock -- she is former chief of staff for FEMA -- and Dan Mitchell. He's senior fellow at the Cato Institute. Of course, we'll be taking your calls, your comments throughout the hour. Join us on 800-433-8850.

MS. DIANE REHM

10:08:05
First, we are joined by Vermont Sen. Bernie Sanders. He joins us from Burlington. Good morning to you, sir.

SEN. BERNIE SANDERS

10:08:18
Good morning, Diane.

REHM

10:08:19
Tell us how Vermonters are doing today. What's the extent of the damage?

SANDERS

10:08:26
There are some people, Diane, who are saying that this is the worst natural disaster ever to hit the state of Vermont. I can tell you, as someone who's been around the states, that hundreds and hundreds of roads have been damaged, some severely. Dozens of bridges have been damaged. Some are completely destroyed.

SANDERS

10:08:47
We're talking -- we don't know exactly yet how many. But, clearly, hundreds, if not thousands, of homes have been damaged. Again, some have been destroyed. Our state's largest office building in Waterbury, Vt., where 1,700 people work, that's inoperable right now. Nobody is in that building right now. And I toured it just the other the day. And it's in horrible condition. So we have been hit hard.

SANDERS

10:09:16
I would say that the spirit of our people is extraordinary. I was in Waitsfield, Vt., yesterday. Hundreds of people came out together to start the process of cleaning up their town, but we're a state that is in trouble today.

REHM

10:09:31
What about the National Guard? I gather they've been airlifting food and water.

SANDERS

10:09:39
Absolutely. The National Guard has done an extraordinary job. Our police and fire fighters have done a great job. We've had -- we're a rural state. We have a lot of communities that are separated from other communities, and when a road goes down, it's impossible to get out of that town. And we have about 13 or so communities that were isolated. We're in the process, with the help of the National Guard and the road crews, of making those connections.

SANDERS

10:10:05
And I think, more or less, at least for emergency vehicles or four-wheel vehicles, I think we've connected to every town in the state now.

REHM

10:10:13
What about FEMA? How much has it done in Vermont?

SANDERS

10:10:20
We're very appreciative. The director of FEMA was here. Mr. Fugate was here just the other day, taking a look at the damage. They have their personnel on the ground working with Vermont emergency personnel, and we're appreciative of what they have done. We're also appreciative that the Secretary of Transportation Ray LaHood made available $5 million immediately in emergency road and bridge money.

SANDERS

10:10:48
So we think that the federal government is beginning to respond in a serious way, and we appreciate that.

REHM

10:10:54
And now, there is actually a debate over FEMA and whether -- either it should be funded at all or if its funding should be offset by cuts. What's your reaction?

SANDERS

10:11:10
Well, you know, Diane, the last that I heard, the name of our country is called the United States of America. And the essence of that and what a nation is about is if there is a tornado in Missouri, if there is a terrible hurricane in Louisiana, if there are problems in New England, we are one nation.

SANDERS

10:11:31
And if communities are devastated and people don't have a place to sleep and roads are washed out, we, as a nation, respond to the crisis and the devastation that takes place in another part. We're one people. So the idea that some folks are saying that the federal government does not have a role to play in that, I think, is terribly wrong. We do need the assistance.

SANDERS

10:11:54
Vermont needs the assistance of the federal government. New Jersey right now, just as Missouri did, just as California had in the past -- that's what being a nation is about. Now, on the other hand, we have a $14 trillion-plus national debt. We have a serious deficit.

SANDERS

10:12:10
Those problems, by the way, were caused by two wars that were unfunded, hundreds and billions of dollars in tax breaks to the wealthiest people in this country and a recession at which revenue now is at its lowest peak in 60 years. So do we need and are we having a rational discussion about how you deal with the deficit and the national debt? Sure. How do you go about doing while people disagree?

SANDERS

10:12:37
I think you don't continue Bush's tax rates to the wealthy. I don't think you continue a tax code in which corporations make billions in some cases and don't pay a nickel in federal taxes. I don't think you continue the right of companies to offshore their money to Bermuda or the Cayman Islands so that we lose $100 billion every single year. But that's a debate that has to be taken within the context of deficit reduction. People will disagree.

SANDERS

10:13:05
But in terms of taking care of ravaged communities, I should think that there would not be disagreement.

REHM

10:13:12
What about the argument that many make, that individual states have the responsibility to take care of themselves?

SANDERS

10:13:26
Our state, as most states in this country today, has a very serious deficit. We've been impacted by the recession. And again, what a nation is about is that we come to the aid of communities who are in the midst of a crisis situation. You know, this debate about whether or not we are going to be one country or we're going to be a confederation of different states, I thought was settled way back at the moment when our country was born.

SANDERS

10:13:59
I think, frankly, at the time when China is spending 9 percent of its GDP on infrastructure, building high-speed rail, building roads and bridges and airports, the United States of America will look like a laughingstock in front of the entire world if we cannot rebuild communities and roads and bridges, schools that have been devastated by natural disaster.

REHM

10:14:28
I want to thank you so much for joining us, Sen. Bernie Sanders of the state of Vermont. Thank you, Senator.

SANDERS

10:14:39
Thank you very much. Thanks.

REHM

10:14:40
And turning to you, Dan Mitchell, you argue that FEMA should not have a role. Tell us why.

MR. DAN MITCHELL

10:14:50
For the simple reason that disasters, by definition, are localized events, and if we want to respond effectively, because there's no doubt there's genuine, you know, tragedy and damage and loss of life and property, et cetera, et cetera, what's going to be more effective: the people on the ground, in the states, in the regions who know what's going on, who know the dangers, who know what needs to be focused on?

MR. DAN MITCHELL

10:15:12
Or do we want to play the leaky bucket game of sending money to Washington, having a layer of bureaucracy in Washington, and then having a politicized process for determining where money goes, how fast it goes and when it goes? And, I think, Katrina was probably the perfect case study of why having another layer of bureaucracy in Washington doesn't work.

MR. DAN MITCHELL

10:15:33
You had both the governor of Louisiana at the time and the mayor of New Orleans who basically sat around frozen, waiting for Uncle Sam to come take care of everything when, if they knew from the very beginning it was their responsibility, then I think we would've had a much quicker, better resolution and response to that crisis.

MR. DAN MITCHELL

10:15:52
So, yes, it's a tragedy. No matter what we're talking about, whether it's an earthquake in California or hurricane in Louisiana, flooding in Vermont, all these things are horrible tragedies. I just think that we'll get better, quicker, more effective, more rational responses if the responsibility is at the state and local level.

REHM

10:16:11
Dan Mitchell. He is senior fellow at The Cato Institute. I'd like our audience to know that we did invite Congressman Ron Paul and Majority Leader Eric Cantor to join us this morning. They were unable to do so. Jane Bullock, as former chief of staff of FEMA from '93 to 2001, how do you respond to Dan Mitchell's comments?

MS. JANE BULLOCK

10:16:44
Thank you, Diane. I think it's very important for people to understand that the Federal government, FEMA, and other federal agencies do not come in after a disaster until the local resources and capabilities have been extended and the state resources and capabilities have been extended. The capabilities that the Federal government brings comes at the request of the governor. And that's very important.

MS. JANE BULLOCK

10:17:06
It also isn't 100 percent funding. The localities and the states match our funding for locals and for public roads and things of that sort. And most importantly, the assistance that comes from FEMA does not make people whole.

REHM

10:17:24
What does the assistance from FEMA do?

BULLOCK

10:17:28
For example, in public assistance, it will -- would go in and replace bridges and roads and schools. It's -- that money is matched with funding from the states. For individuals and the individual and household program, there are grants to do home repair. There are grants to do medical problems, funeral costs, to have temporary housing. The largest grant is usually only $25,000.

REHM

10:17:53
And what do you say to Dan Mitchell's point that the governor must make the request, and in the case of Hurricane Katrina, it was a mess, and FEMA did not respond as it should've?

BULLOCK

10:18:13
I think Hurricane Katrina was a unique circumstance. You had political problems between the mayor and the governor. You had a state that did not have a well-developed emergency management capability, and you had a director of Homeland Security who would not make a decision.

REHM

10:18:29
Jane Bullock, former chief of staff for FEMA, Dan Mitchell of the Cato Institute. When we come back, we'll talk with Ed O'Keefe of The Washington Post.

REHM

10:20:03
And we're talking about FEMA, the Federal Emergency Management Agency. It's back in the spotlight now because of the destruction caused by the latest hurricane, Irene. There is, in fact, another hurricane in the works. Katia is off the coast of the United States in the Atlantic. Congressman Ron Paul has called for the agency to shut down.

REHM

10:20:38
House Majority Leader Eric Cantor has called for any future FEMA funding to be offset by spending cuts. Ed O'Keefe of The Washington Post, how much has FEMA been doing on Irene?

MR. ED O'KEEFE

10:20:57
They've been doing a lot. In fact, I had a conversation with some FEMA officials the weekend before last weekend when the storm hit. And they said, look, this storm is coming. It's going to be very big. We know it's going to hit at least some part of the United States, and we've been preparing for days. So, really, more than a week before it hit the East Coast, the agency was already under way with its preparations and getting its people in place.

MR. ED O'KEEFE

10:21:20
Picking up on what Dan and Jane were talking about, about what happened after Katrina, about governors having to wait for Washington, about governors having to make requests, remember, it was six years ago this week that Hurricane Katrina hit New Orleans and ravaged the Gulf Coast.

MR. ED O'KEEFE

10:21:33
Since then, legislation's been passed that allows FEMA now to preemptively deploy people and equipment and resources because they don't want that delay that held up aid after Katrina. So, in that week before Irene, when I was talking to those officials, already, they were on the phone with governors and their state emergency managers.

MR. ED O'KEEFE

10:21:52
They were putting equipment in place in North Carolina, New Jersey and Massachusetts, everything from MREs to blankets, to baby food, to tarps. They were coordinating most, especially these days, with NGOs, the Red Cross, the Salvation Army and other groups around the country.

REHM

10:22:07
So they've changed their approach to be...

O'KEEFE

10:22:10
Absolutely.

REHM

10:22:11
...far more proactive.

O'KEEFE

10:22:12
Proactive and preemptive...

REHM

10:22:14
Right.

O'KEEFE

10:22:14
...and that was the biggest complaint.

REHM

10:22:15
Yeah.

O'KEEFE

10:22:15
Craig Fugate, who's the boss of FEMA right now, was head of Florida's Emergency Management agency back during Katrina, and he saw the problem. And he didn't join the Bush administration after Katrina when they asked him to because they weren't going to let him do it the way that he wanted it to be done.

O'KEEFE

10:22:27
Once that legislation was passed, it allowed FEMA to operate in a way that he feels is much more amenable to preparing for these large situations.

REHM

10:22:37
So Katrina is no longer the model, Dan.

MITCHELL

10:22:41
Well, my complaint has never been about whether FEMA was acting effectively or ineffectively. I'm glad. If it's all true, if they're doing a better job, that's certainly good news. But my fundamental issue is whether or not this could be handled better if it was a state and local responsibility. The state of North Carolina or the state of New Jersey, or whatever state we're talking about, should be perfectly capable of putting in place the MREs, the tarps, the baby food, the blankets and all those things.

MITCHELL

10:23:10
I don't see why we should have this leaky bucket strategy of bringing money to Washington, having a bureaucracy in Washington and then sending a leaky bucket back to the states whenever there's an emergency. I think this goes against what served our nation so well for a long time, which is to have the innovation, the diversity, the local and state responsibility and control of these issues.

REHM

10:23:34
Jane Bullock.

BULLOCK

10:23:35
Except, Diane, it didn't work. That's how the system worked all through the '70s until we had Hurricane Camille. We had Betsy, and then we had Agnes. And the states themselves were the one who requested that there be an organization at the federal level to help them. Growing out of Three Mile Island, growing out of the problems with off-site preparedness around nuclear power plants, the state directors came to Congress and came to President Jimmy Carter and said, we need help, we can't do it.

REHM

10:24:05
Because the need was for coordination for a systematic approach.

BULLOCK

10:24:12
Correct. So that all of the agencies of the federal government that had some level of responsibility -- for example, Department of Labor with disaster unemployment assistance, Department of Commerce with EDA -- so all of these federal agencies could work with the states through one coordinating agency. And that was FEMA.

REHM

10:24:30
Ed.

O'KEEFE

10:24:30
And one other point to pick up on -- and Dan and Cato Institute should be able to appreciate this -- once Craig -- and I don't serve here as the agency's defender. I'm just telling you what I've learned through my reporting, that once the -- once Craig Fugate came to Washington, one of the first things he started to do was he brought in some of the nation's largest retailers: Target, Best Buy, Big Lots, Home Depot.

O'KEEFE

10:24:52
The reason being is he's so terribly impressed with the retail infrastructure and their delivery networks, and he realized that a lot of these retailers were also preparing for disasters. They, too, were getting food and supplies into their stores. They needed it where customers were going to come.

O'KEEFE

10:25:06
And what he said is that when he used to run emergency response in Florida, often, his state folks would show up in a parking lot at a shopping center and start distributing water that a retailer was already doing. So he said, why don't we just figure out where you can go, and we'll go where you're not? So what was also going on in the last 10 days was there were meetings going on with Macy's, Target, Best Buy, Big Lots, Home Depot.

O'KEEFE

10:25:28
They were discussing how many of their stores might close and where they were sending supplies. And, in turn, the agency was saying, well, look, here's what we're sending people. Here are the watches and warnings. And, again, this is the administration's attempt to sort of say, it's not just the federal government. It shouldn't just be the federal government. It's got to be the local and state governments.

O'KEEFE

10:25:44
It can be private companies, and it can be NGOs. And to their credit, so far, at least, in the early days of this, the governors, the mayors have all said, things are going well. And there doesn't seem to be any real example yet of delay.

REHM

10:25:57
Dan Mitchell, we have a tweet from Ryan, who says, "So if it's state's responsibility and they cannot afford it, what do they do, fire every state worker, dissolve the state? What about the fact that states have been so short on funding?"

MITCHELL

10:26:20
Well, considering that state spending is at record levels, I'm not exactly sure that they're having problems affording things. I think state governments themselves are far too big. But here's something that you're not going to hear someone from the Cato Institute say very often. I think we should use the FDR approach.

MITCHELL

10:26:34
When FDR went into World War II, or, for that matter, when Harry Truman went into the Korean War, they reduced domestic spending to help fund the war effort. And wars, obviously, in some sense, are a form of natural -- or, I guess, not natural, but manmade disaster. But I think their approach of, okay, we have this emergency, we have this unexpected expense, we're going to reduce some of our outlays elsewhere.

MITCHELL

10:26:57
I think that was a very responsible approach. And, I think, ever since LBJ's guns-and-butter strategy of having the Vietnam War and expanding the welfare state, that's what got us into trouble. And Sen. Sanders said it, you know, not me, $14 trillion in debt. We have a government that has more than doubled in size during the Bush-Obama spending binge.

MITCHELL

10:27:16
Why on earth do we want to maintain this policy of endless debt, endless expansion of government? Putting it on the state level, where at least they'll make the tradeoff -- something that we've seen Washington is completely incapable of doing -- I think, would be good fiscal policy and good disaster preparedness policy.

REHM

10:27:33
So if it were up to you, you would dissolve FEMA.

MITCHELL

10:27:38
I think we would be much better off. We'd have much better responses to disaster if we didn't have states and local governments sitting around, paralyzed, waiting for the federal government to take care of everything. I think that infantilizes the responsibilities of state and local officials.

REHM

10:27:53
But -- no, a yes or no question. If it were up to you, you would dissolve FEMA?

MITCHELL

10:27:58
Oh, I thought I was perfectly clear in saying my answer is yes on that.

REHM

10:28:02
Okay.

MITCHELL

10:28:02
I might put getting rid of the Department of Housing and Urban Development, Department of Energy and Education before getting rid of FEMA. But, by God, FEMA's on my chopping block as well.

REHM

10:28:10
All right. Jane Bullock.

BULLOCK

10:28:12
I think that the people of the United States believe that the government has a right to keep them safe and secure in their homes and their communities. Ron Raul may be right, that the Constitution does say the public safety is the responsibility of state and local governments. However, the federal government only comes in when state and local capacity is exhausted.

BULLOCK

10:28:34
We do preposition, but we don't preposition, as Ed was talking about, unless the state asks us to. The other thing that, I think, is really important to know, one of the other major factors of having a agency like FEMA is to promote improved building practices, to promote mitigation so that the states and localities that go through a disaster will not be faced with the same disaster again. Look at the Northridge earthquake.

BULLOCK

10:29:01
Look at the work we did with the state of California and L.A. to rebuild those buildings with mitigation in it. If the same earthquake were to hit L.A. at this -- of the same strength, you would not see the devastation.

REHM

10:29:15
All right. Ed O'Keefe, how low on funds is FEMA?

O'KEEFE

10:29:22
Right now, they're somewhere around $800 million in what's called the disaster relief fund. And this is the pool of money that's used to pay out for reconstruction projects and to pay individuals who are expecting those payments to help rebuild.

REHM

10:29:34
Is it a yearly allocation of funds?

O'KEEFE

10:29:37
Yes.

REHM

10:29:38
Okay.

O'KEEFE

10:29:38
And usually they like to leave about $1 billion in this fund. But because of the spring tornadoes that ravaged Alabama, Mississippi and Missouri, because of other natural disasters earlier in the year, including snow storms, because of previous disasters in other years so -- whether it was hurricanes last year, you know, Katrina-related damage still from six years ago, there is a lot more money being spent.

O'KEEFE

10:29:58
Washington has this way of not giving FEMA enough money at the beginning of a fiscal year. And for years, the assumption has always been, if the money starts to run out, Congress will put together a supplemental funding bill, and we'll give it to you again.

O'KEEFE

10:30:10
Problem is, in a year when there's no money to be spent, when Washington's not eager to really have any more discussions about spending, or if they are going to have spending conversations, they also want to talk about cutting. There's the potential that when Congress comes back next week, money isn't going to be given to FEMA fast enough because they're going to be having a conversation about what to cut.

O'KEEFE

10:30:29
Whether you like it or not, elections have consequences. And for years, people like Ron Paul has been saying that we shouldn't be giving FEMA money unless we cut somewhere else. It just so happens that there's a lot more people who agree with him now in the House and, to some extent, in the Senate. And so we very well may see the issue of disaster funding become a proxy war and the bigger conversation about federal spending.

REHM

10:30:47
And on Sept. 6, the House appropriations bill for the Department of Homeland Security is going to go before the Senate Appropriations Committee. What will that bill say?

O'KEEFE

10:31:05
Well, what it has in it is an extra billion dollars to go on top of the $700 million that's sitting in the fund right now, and that billion is needed to pay for everything that happened in Joplin.

REHM

10:31:14
Already?

O'KEEFE

10:31:15
Already. This isn't necessarily enough...

REHM

10:31:18
Letting go...

O'KEEFE

10:31:18
...to help pay for Vermont and New Jersey and North Carolina, Virginia and upstate New York, so you're probably going to have to see a conversation yet again, maybe by the end of this fiscal year, maybe not, where you tack on a few hundred million more to start paying for the money that's going to be needed in New Jersey, Vermont and other places.

O'KEEFE

10:31:34
Right now, for fiscal 2012, which begins at the beginning of October, you've got about $2.65 billion allocated to go into the fund right away at the beginning of the fiscal year. But, again, conceivably, you could see them up that amount knowing that they're going to have to pay for Irene.

O'KEEFE

10:31:47
They might also have to pay for this Hurricane Katia. There could be another earthquake here along the East Coast. You never know. And that's what Homeland Security Secretary Janet Napolitano said earlier this week. There's no crystal ball at the beginning of the fiscal year. We don't know what we're going to need.

O'KEEFE

10:31:59
But if we continue this tradition of putting in some and then adding a little more later, as has been done for years, that should, at least for now, be sufficient to continue funding disaster relief.

BULLOCK

10:32:11
It's always been a political game as to how the disaster relief fund would get reimbursed. And the $2.65 billion figure used to be the 10-year average from the '90s, and that's where that figure came from. But what we're seeing -- you know, we're seeing, increasingly, storms more frequent, more severe, impacting a larger area. And the 2.65 figure is, frankly, just unrealistic.

BULLOCK

10:32:35
And until now, the disaster relief fund and the supplementals that supported it were off budget. They were not offset. This is the first time there's going to be an attempt to do that.

REHM

10:32:47
Jane Bullock, former chief of staff for FEMA. We're going to open the phones, 800-433-8850. Send us your email to drshow@wamu.org. Join us on Facebook or Twitter. Let's go to Dallas, Texas. Good morning, Tim. You're on the air.

TIM

10:33:14
Thank you so much for taking my call.

REHM

10:33:16
Sure.

TIM

10:33:16
I just have a quick question. You know, considering the economic disaster that we find ourselves in right now, these numbers that are being bloated regarding FEMA's budget, I'd like to know what percentage that actually represents for our entire budget and then how that, in turn, factors in with our entire economic situation.

TIM

10:33:36
It seems preposterous to me that we -- even with our economic situation, we find ourselves the most -- the richest country in the world, and we're bickering about these minute amounts of money when it's all placed into context, when we're actually talking about helping people who have been thrown into disaster. It's just laughable to me.

TIM

10:33:54
And on a personal note, I would like to just say that the gentleman who tried to make a comparison between a natural disaster, in which people have no way to prepare themselves for other than their own means, and the idea that that is comparable to a war? War, sir, is always planned. War, sir, is always made -- there is a decision made to go to war.

REHM

10:34:18
All right.

TIM

10:34:18
So to try and make some type of comparison between the two is utterly pathetic.

REHM

10:34:23
All right. Thanks for your call. Dan Mitchell, you have a moment to respond.

MITCHELL

10:34:30
I think he's a charter member of the Dan Mitchell fan club there. Well, first, to answer his question, we have a federal budget of $3.8 trillion, give or take. And I don't know the FEMA budget. The disaster part, I guess, as you were saying is $2.65 billion, Jane. So, obviously, we're talking about a very tiny share of the federal budget. But this is the same thing that comes up with every argument about every budget.

MITCHELL

10:34:53
Oh, this is just 1 percent or one-half of 1 percent or 2 percent of the budget and, therefore, we don't need to worry about controlling that share of the budget. But you add up all the different programs where exactly this same argument takes place. And guess what? We get a $3.8 trillion monstrosity and America on a path to becoming another bankrupt welfare state like Greece.

MITCHELL

10:35:15
And that's already baked in the cake because of demographics and things like that. Now, in terms of the question about wars and natural disasters, I was simply making the point, which, I think, the caller probably understood but didn't want to appreciate, that when you have an unexpected additional expense, FDR and Truman cut other spending.

MITCHELL

10:35:38
And that's what Eric Cantor is trying to do, is use the FDR approach. And the people who want more FEMA spending want the LBJ approach. And I have to choose between FDR and LBJ, I'd go with FDR.

REHM

10:35:50
Ed.

O'KEEFE

10:35:51
Just real quick. As we talk about funding for FEMA, it's very confusing, and listeners should keep this in mind. Private insurers are going to pay for most of this. The state and local governments are going to pay for a big chunk of it. People are going to be able to afford to rebuild to some extent. The $2.65 billion or -- whatever it's going to be.

O'KEEFE

10:36:06
Chris Christie has suggested it could be tens of billions that the federal government would need to pay. That only comes after all other funding sources have been exhausted. And, remember, private insurers help pay for this. So only then would the federal government be asked to spend money. The federal government isn't going to pay for every single cent of this disaster.

O'KEEFE

10:36:23
It's people who don't have flood insurance, for people who don't have homeowner's insurance. It's state governments who are taxed. It's cities who are broke.

REHM

10:36:30
What about the argument, that I'm sure Dan would make, that the presence of FEMA encourages people to build in risky areas?

BULLOCK

10:36:44
That is just simply not true. The National Flood Insurance Program is one of the best mitigation programs that exist. In return for low-cost flood insurance, a community has to pass an ordinance that minimizes any new development in the floodway or the floodplain, so that we're not building -- we're not supporting building in dangerous areas.

BULLOCK

10:37:07
The other thing that I wish Congress would consider when they talk about offsetting the disaster relief fund, to look at what benefits. Tax benefits come from the redevelopment that is fostered by rebuilding bridges, rebuilding schools funded by the federal government. The federal government gets back that money in taxes.

REHM

10:37:26
Jane Bullock, former chief of staff of FEMA. Also here in the studio, Dan Mitchell of Cato, Ed O'Keefe of The Washington Post. More of your calls, comments when we come back.

REHM

10:40:03
And we'll go right back to the phones. Let's go to New Albany, Ind. Good morning, Ruth Ann .

RUTH ANN

10:40:12
Good morning, Diane. Thank you. I just wanted to say that when I heard your guest, I think Mr. Mitchell, say that the first agency he would like to eliminate would be HUD, Housing and Urban Development, it just made my blood boil because I am a commissioner on the best loan housing authority in the state of Indiana. And I want him to know that 46 percent of our residents are 17 years old and younger.

RUTH ANN

10:40:37
Many of these families -- of course, you know, a lot of them are single-parent families -- actually are -- were living in their cars before they came to us. And we're -- our staff works very, very hard to get people independent, to get them into -- you know, how to manage their funds and how to, you know, get back in school and do things. And I'm just furious, really.

RUTH ANN

10:41:00
We already are cut to the bone. And I just felt -- I think this whole kind of Ayn Rand ideology is very cruel and heartless. And, you know, we're going to be -- it's just so (word?), we're going to be swatting beggars off our windshield.

REHM

10:41:16
I want to pick up on Ruth Ann's and Bernie Sanders' comments about we are a united state. We do help each other. And there are federal agencies in existence meant to help each other. Where are you on that thought, Dan Mitchell?

MITCHELL

10:41:43
Well, I would actually cite Tocqueville, rather than Ayn Rand, although I certainly did read "Atlas Shrugged" at one point in my Libertarian upbringing. But I think that Tocqueville had it right. Americans are great at coming together and working to help solve problems in their communities. My concern is not whether something should be done, but whether or not the federal government is the most effective way of doing it.

MITCHELL

10:42:07
And, Ruth Ann, who -- by the way, she should get together with the guy from Dallas to form this Dan Mitchell fan club. Ruth Ann said her housing agency is the best managed in the country -- all the more reason to get rid of all the regulations, the mandates and the interference from Washington. Let Indiana be responsible for whatever Indiana wants to do on public housing.

MITCHELL

10:42:26
It's the same -- we're obviously getting a little bit a far afield from disaster relief. But the underlying principle is the same. Do we really want the additional layer of bureaucracy and intervention and regulations from Washington, not to mention the leaky bucket?

MITCHELL

10:42:40
And if we're talking about what fundamentally, at the end of the day, is compassionate for making people better off, having America become another Greece is not the right approach. And that's what's happening with the federal government today.

REHM

10:42:50
All right. To Cambridge, Mass., for another view. Good morning, Steve.

STEVE

10:42:58
Good morning, Diane. I think America is great. And I think that we can help each other and that states can help people within their state, and different states can help each other without everything having to be put -- done by some new federal agency whose director is constantly lobbying for more and more money and insinuating themselves in every possible way to justify their budgets.

STEVE

10:43:35
So, yes, I do think we're a united state. And I do think we can take care of each other. But we don't need the federal government to create increasing dependency on it.

REHM

10:43:44
Jane Bullock.

BULLOCK

10:43:45
Well, first of all, I do think it's nice to acknowledge that, having been in disasters, it's enormously gratifying to see how the American people pull together and to see how the private sector works with the -- with the voluntary agencies. And once again, the federal government comes in when the circumstances is extraordinary.

BULLOCK

10:44:04
And when the circumstances at the local level and state level just can't be met, state -- a lot of states used to have their own disaster relief funds. But in this economic environment, they just can't do that. People believe it's not going to happen here. You need an agency that coordinates it, that helps people build back better to reduce future impacts and works with the other parts of the government and the private sector to help people get back on their feet.

REHM

10:44:34
Dan.

MITCHELL

10:44:34
Actually, one quick point, Jane mentioned that states used to have disaster or relief funds of their own. There's been some academic research showing that states have scaled back their involvement in the area precisely because FEMA's there. And this is part of what I call the infantilization -- if I could even get the word out -- where everyone just sits around, thinks that Uncle Sam should take care of everything.

MITCHELL

10:44:55
I do worry, in the long run, that that is not healthy for a democratic society.

REHM

10:45:02
Ed, have we reached that point where we, as citizens, have become -- have regrets to infancy in our dependence on the federal government?

O'KEEFE

10:45:16
I mean, I'm no budget expert. But, I mean, I think you have seen FEMA, in the last few years, you know, reject a healthy number of requests from states for aid, you know? Most recently, most notably, considering the campaign, Texas didn't get the disaster declaration that it sought for wildfires earlier this year. FEMA gave them an emergency declaration, which meant that it provided funding to the firefighters.

O'KEEFE

10:45:40
But it wasn't going to come in and provide extra funding for people who lost their homes because they said it wasn't a big enough disaster. Rick Perry, the governor, wasn't very happy about this, obviously fought it. Virginia, to the same extent, asked for a bigger disaster declaration after some storms earlier this year. FEMA said, no, it wasn't a big enough disaster.

O'KEEFE

10:45:57
The state can pay for it. So, for all of the high-profile examples of federal aid being given out, there are examples of states not getting funding or it taking very long for them to finally get a yes or no answer from the federal government.

REHM

10:46:09
But here's the question Kevin sends, an email from Lynchburg, Va., saying -- and perhaps this is what you're pointing to. He says, "This debate about funding is simple. It's about politics. If there were a different administration in the White House, we would not be having this debate." Ed.

O'KEEFE

10:46:35
That may be the case. And, certainly, there were accusations that the White House was rejecting money from the Republican Rick Perry and the Republican Bob McDonnell in Virginia. But FEMA's argument was simply that, look, these were not big enough disasters to warrant more federal aid, that the states were able, in those situations, to pay for it.

REHM

10:46:54
How does FEMA prioritize, Jane Bullock?

BULLOCK

10:46:58
Well, there is no set criteria for when a presidential declaration is made. They look at a range of things, such as, has the area had a disaster before? Has the -- what's the percentage of low income? What's the percentage of unemployment? What's the percentage of insured properties? You know, if you have a community where everything is ensured, then that's a reasonable thing to think we won't need federal grants.

BULLOCK

10:47:22
But it's a broad look at what is going on at any given point in that state, in that county.

REHM

10:47:29
And here's an email from Julie, who says, "If FEMA is dissolved, then states are required to deal with disasters themselves. What happens to the poorer states? Do their citizens simply suffer because they happen to live in a poor state?" Dan Mitchell.

MITCHELL

10:47:53
I'm not a big believer of redistribution. I think there's plenty of money. I guess Mississippi is the poorest state. On average, Mississippi's budget is plenty big enough to cover a natural disaster. One thing I want to focus on is -- Jane was just talking about the process for making these declarations. Well, way back, you know, years and years ago, there'd be a couple dozen a year. And then they went up to a couple hundred a year.

MITCHELL

10:48:17
And now, we're over 1,000 a year. So, obviously, there's some bureaucratic mission creep with more and more things being declared as being the responsibility of the federal government. And, again, this gets at my fundamental point, which is once you get the federal government involved, even -- you know, okay, you know, I suspect Chris Christie is probably a pretty good governor.

MITCHELL

10:48:35
I don't really know much about New Jersey. But here he is, you know, going, you know, as one of the governor of one of the richest states in the nation, going cup in hand to Washington, saying, please, please, give me some money. Well, this is a fundamentally corrupting process. Chris Christie is the chief executive of his state. He should be responsible for making sure that the state is protected in natural disasters.

MITCHELL

10:48:57
He shouldn't be passing the buck to Washington and to the taxpayers of other states who don't have anywhere near the average income of New Jersey.

REHM

10:49:05
All right. To Connie in Derwood, Md. Good morning.

CONNIE

10:49:10
Hi there, Diane. I had a funny conversation yesterday. I'd been trying to reach my banker. Their headquarters are in New Jersey -- no answer for two days. And when I finally got through to him, he told me a really sad story about losing his basement and bailing out for two days and mentioned that there was raw sewage pouring into the neighborhood. And I just read that morning that Christie had cut 2,900 public employee jobs in New Jersey.

CONNIE

10:49:37
And I know this is a lovely man. I know he's a Republican. We don't talk politics. But I had to say, you know, I sure hope those public employees didn't include your water resource protection agency, the lab techs, the people who come in and take water samples because the reality is, you know, everyone hates to pay taxes.

CONNIE

10:49:58
But when a disaster strikes, you expect your government to be there to help you and the more vulnerable people in your family. And, you know, you fire a professional helper, whose whole mission as a public employee is to help citizens, you get -- you eliminate that position, and then they're not there when you have a disaster. So I'm wondering about these cuts to the state.

CONNIE

10:50:26
I'm wondering what it means to eliminate FEMA and require states who we know have to balance their budget every year, who can't prepare for disasters because a disaster may happen once every 100 years. I mean, what governor is actually going to pour resources into that preparation? It just makes sense to let the Feds take care of it, create that infrastructure so they can get it there in eight hours instead of having to create a whole new agency because you fired the competent people last year to satisfy the people who hate taxes.

REHM

10:50:59
Dan Mitchell.

MITCHELL

10:51:01
What you're complaining about is something that the rest of us call democracy. And if you think that your local community in New Jersey -- or, I guess, you're from Maryland or -- but if you happen to think that the government in New Jersey isn't being operated well, get involved in the political process. If you think there should be higher taxes and more spending, which, of course, is -- New Jersey has plenty of those.

MITCHELL

10:51:20
But, you know, if you don't think taxes are high enough there, then move to California. Well, they're in really great fiscal shape with that whole approach. Fundamentally, this is an issue about responsibility. And whether you believe in big government or small government, I think we're much better off and much more likely to get good results if these decisions and responsibilities for disaster relief were at the state and local level.

REHM

10:51:45
Ed.

O'KEEFE

10:51:45
The only point I'll make about this is that, remember that since 9/11, as the 10th anniversary nears, all of these state governments have had to rejigger their funding and their structure because they've had to somehow address the issue of homeland security. So they now all have Homeland Security directors, and they have bolstered, to some extent, their emergency management offices.

O'KEEFE

10:52:02
Whether you like that or not, that has come at the expense, obviously, of other areas in the state government.

MITCHELL

10:52:06
But some of that is being dictated and driven by federal dollars.

O'KEEFE

10:52:10
That is true.

MITCHELL

10:52:10
I mean, there's no reason why Wyoming should be spending any resources about terrorism attacks. Terrorism attacks, we all know are going to be focused, if they happen -- knock on wood -- they won't -- will be New York and Washington and places like that.

MITCHELL

10:52:23
So the fact that we have this grant-making process in Washington, where you have state and local governments, where terrorism is -- the chances of it ever being an issue are about the same as me playing center field for the New York Yankees. And yet they're rejiggering precisely because they want to stick their snouts in the federal trough.

BULLOCK

10:52:40
I think we also have to look at a catastrophic natural disaster such as the New Madrid earthquake fault going -- would become more than just a natural hazard. It could be a national security issue. And there is a role for the government national security. None of us will question that. You have to look at the big picture.

REHM

10:53:00
And you're listening to "The Diane Rehm Show." Let's go now to Sarasota, Fla. Good morning, Elliot.

ELLIOT

10:53:10
Yes, good morning, Diane. I would like to question the credibility of Mr. Mitchell, who would like to destroy the U.S. government and all of the people that -- the poor people. The federal government plays a role, as far as he's concerned, only in granting large tax cuts to the very wealthy, but denying unemployment benefits to the poor. I'd like to correct one thing that Mr. Mitchell said about JFK and HST.

ELLIOT

10:53:37
During the war, the taxes were raised. He only mentioned cutting services. What FDR did is he stopped making automobiles in order to make tanks. He just -- he didn't just cut services, in case you're not familiar with history. Another thing is the credibility of the CATO Institute and the radical right wing...

REHM

10:53:57
Excuse me, Elliot. I'd rather not hear any particular commentary against Dan ad hominem. You can disagree with him. You can disagree with his organization, but let's stop right there. Dan.

O'KEEFE

10:54:17
Send those letters care of the CATO Institute.

REHM

10:54:19
Yeah. Right.

MITCHELL

10:54:20
No, actually, I have to readjust myself from my seat because these puppet strings from the Koch brothers are really getting uncomfortable for me. We obviously have a fundamental disagreement between me and the caller about the size of government, the role of government. I don't want to destroy the federal government. I want to restore the federal government to its competencies, where we're more likely to efficiencies.

MITCHELL

10:54:43
And I think our Founding Fathers had a pretty good idea about what were good responsibilities for the federal government compared to state and local governments.

REHM

10:54:51
Okay. So, Ed, you've got governors of both parties now asking for help from FEMA. Where is this argument going?

O'KEEFE

10:55:02
Well, you have three major disaster declarations so far: North Carolina, New Jersey, New York, and in Puerto Rico as well. You're likely to see similar requests and perhaps approvals made in the coming days. It usually takes a few days because the states have to go out and get specific examples and get a specific sense of which counties and cities actually need the funding.

O'KEEFE

10:55:22
At some point, probably in the next 10 days, the White House will be able to add it all up and say, Congress, look, we have this amount of money. We need Y. Can you give it to us? And then some kind of discussion will go on. The problem is, of course, it's coming in the month of September, which is usually one of the busiest months for Congress because the fiscal year is ending, the new one is beginning.

O'KEEFE

10:55:40
And there are already debates going on about appropriations bills to fund fiscal year 2012, which begins in October. So again, it becomes a question of, where is this going to fit into that larger discussion about federal spending? And, I think, this is a phenomenal example of what Washington is going to have to start to think about.

O'KEEFE

10:55:56
Like Jane said, you need government when you need government, when something happens or when you need somebody to help you. And, you know, I think we haven't had a really good real world example of that in the last few months as the debt ceiling debate went on. And now we do. And Washington is going to have to have a conversation about it.

O'KEEFE

10:56:12
Do we just continue the way it was, which is you give FEMA more money when it needs it, or are you going to have a more thoughtful discussion about, you know, do we have to cut somewhere else to pay for this?

REHM

10:56:21
And we'll end with two postings on Facebook, each representing the discussion we've had here. First, from Ted, "A commitment to constrain a metastasizing, suffocating, corrupt and inefficient federal government that can no longer be afforded is grown-up compassion." That's from Ted. Vera says, "We are all Americans. We help each other when we need to and don't ask, what's in it for me.? That's not who we are."

REHM

10:57:00
Ed O'Keefe, Jane Bullock, Dan Mitchell, thank you all so much.

MITCHELL

10:57:05
Thank you.

O'KEEFE

10:57:05
Thank you so much.

BULLOCK

10:57:05
Thank you, Diane

REHM

10:57:06
Thanks for listening. I'm Diane Rehm.

ANNOUNCER

10:57:09
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