Flooded farmland, Knappa, Oregon. Photo: Jeffrey St. Clair.
The Federal Emergency Management Agency (FEMA) Review Council finally released its recommendations last week, and they were a mix of what most close followers of the agency were expecting, with some surprises. As expected, the recommendations aim to put more responsibilities on states, localities, and tribal governments, with FEMA taking a supporting role. There were also statements about “spending transparency” and “accountability.” At one point, former Mississippi governor Phil Bryant said the council would like to transform FEMA into a “lean organization” that supports Americans first.
More concerning statements involved further leveraging Artificial Intelligence, with no details on what role AI could play, given that the technology is still untested in this area. There was also discussion about realigning federal disaster assistance criteria, including an assessment of the disaster declaration process for simplicity and transparency. The Stafford Act currently determines how disaster declarations are handled, so any changes would require an act of Congress. And yes, the act needs to be amended to include specific, transparent, and non-political criteria for issuing declarations and distributing aid, as there has been clear partisan favoritism under Trump. But that’s not the council’s intent. Their recommendation is to find ways to reduce the number of federal disaster declarations, which is particularly concerning for smaller states and communities that already struggle in the aftermath of disasters.
Finally, the council recommended essentially privatizing the National Flood Insurance Program (NFIP), stating that the program is $22.525 billion in debt and there should be a process to transfer policies back to the private sector. There is an obvious disconnect here; the council is on the one hand saying that flood insurance and its associated risk are too expensive for the federal government, but somehow fine for the private market, which focuses largely on shareholder profits and has been pulling out of risky states. To be clear, there is a private flood insurance market, and there is a reason why NFIP is the largest flood insurance provider in the country, with 4.7 million policies and $1.3 trillion in coverage. Private insurance is unaffordable. And when FEMA adjusted premiums to reflect actuarial risk under Risk Rating 2.0 in 2021, the changes led to higher costs for consumers, prompting a growing number of policyholders to abandon flood insurance entirely. A move toward privatization could affect consumers in states like Florida, Texas, and Louisiana, which have the highest number of NFIP policies in the nation (and not coincidentally some of the highest homeowners insurance premiums).
All in all, the review council is shifting toward a neoliberal framework that prioritizes cost shifting over communities. By framing FEMA’s role as merely “supporting” state and local governments, the council risks leaving smaller communities to struggle independently in the wake of disasters. And a shift toward a “lean organization” and the potential privatization of the NFIP — despite its massive $1.3 trillion in coverage — suggests a move toward individual accountability that may make essential protections like flood insurance unaffordable for many Americans. Given these recommendations, it may have been better for the review council to disband without saying anything.
This first appeared on CEPR.
