[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


 
                  REBUILDING AFTER THE STORM: LESSENING 
                       IMPACTS AND SPEEDING RECOVERY

=======================================================================

                                (114-2)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 27, 2015

                               __________

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                             Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey        CORRINE BROWN, Florida
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
CANDICE S. MILLER, Michigan          ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California            RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
BLAKE FARENTHOLD, Texas              DANIEL LIPINSKI, Illinois
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
DANIEL WEBSTER, Florida              DONNA F. EDWARDS, Maryland
JEFF DENHAM, California              JOHN GARAMENDI, California
REID J. RIBBLE, Wisconsin            ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky              JANICE HAHN, California
TOM RICE, South Carolina             RICHARD M. NOLAN, Minnesota
MARK MEADOWS, North Carolina         ANN KIRKPATRICK, Arizona
SCOTT PERRY, Pennsylvania            DINA TITUS, Nevada
RODNEY DAVIS, Illinois               SEAN PATRICK MALONEY, New York
MARK SANFORD, South Carolina         ELIZABETH H. ESTY, Connecticut
ROB WOODALL, Georgia                 LOIS FRANKEL, Florida
TODD ROKITA, Indiana                 CHERI BUSTOS, Illinois
JOHN KATKO, New York                 JARED HUFFMAN, California
BRIAN BABIN, Texas                   JULIA BROWNLEY, California
CRESENT HARDY, Nevada
RYAN A. COSTELLO, Pennsylvania
GARRET GRAVES, Louisiana
MIMI WALTERS, California
BARBARA COMSTOCK, Virginia
CARLOS CURBELO, Florida
DAVID ROUZER, North Carolina
LEE M. ZELDIN, New York
                                ------                                7

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                  LOU BARLETTA, Pennsylvania, Chairman
ERIC A. ``RICK'' CRAWFORD, Arkansas  ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of 
MARK MEADOWS, North Carolina             Columbia
SCOTT PERRY, Pennsylvania            ALBIO SIRES, New Jersey
RYAN A. COSTELLO, Pennsylvania       DONNA F. EDWARDS, Maryland
BARBARA COMSTOCK, Virginia           DINA TITUS, Nevada
CARLOS CURBELO, Florida              PETER A. DeFAZIO, Oregon (Ex 
DAVID ROUZER, North Carolina             Officio)
BILL SHUSTER, Pennsylvania (Ex       VACANCY
    Officio)
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               WITNESSES
                                Panel 1

Hon. W. Craig Fugate, Administrator, Federal Emergency Management 
  Agency:

    Testimony....................................................     4
    Prepared statement...........................................    53
    Responses to questions for the record from Hon. Lou Barletta, 
      a Representative in Congress from the State of Pennsylvania    59

                                Panel 2

Francis X. McCarthy, Analyst in Emergency Management Policy, 
  Government Finance Division, Congressional Research Service:

    Testimony....................................................    24
    Prepared statement...........................................    71
Hon. Robert David Paulison, Former Administrator, Federal 
  Emergency Management Agency:

    Testimony....................................................    24
    Prepared statement...........................................    80
Bryan Koon, Director, Florida Division of Emergency Management, 
  on behalf of the National Emergency Management Association:

    Testimony....................................................    24
    Prepared statement...........................................    90
Brian Fennessy, Assistant Fire Chief for Emergency Operations, 
  San Diego Fire-Rescue Department, on behalf of the 
  International Association of Fire Chiefs:

    Testimony....................................................    24
    Prepared statement...........................................    97

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Andre Carson, of Indiana....................................    50

                       SUBMISSIONS FOR THE RECORD

Hon. Lou Barletta, a Representative in Congress from the State of 
  Pennsylvania, submission of the following documents:

    Interlocking Concrete Pavement Institute, written testimony..    42
    National Concrete Masonry Association, written testimony.....    45
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 REBUILDING AFTER THE STORM: LESSENING IMPACTS AND SPEEDING RECOVERY

                              ----------                              


                       TUESDAY, JANUARY 27, 2015

                  House of Representatives,
              Subcommittee on Economic Development,
        Public Buildings, and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:32 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Lou Barletta 
(Chairman of the subcommittee) presiding.
    Mr. Barletta. The subcommittee will come to order.
    I would like to thank Chairman Shuster for the opportunity 
to serve again as chairman of this subcommittee.
    Ranking Member Carson, welcome back.
    Mr. Carson. Thank you, Chairman.
    Mr. Barletta. I look forward to building on our bipartisan 
record of accomplishments from last Congress.
    Mr. Carson. Absolutely.
    Mr. Barletta. Let me welcome the new and returning members 
of the subcommittee to our first hearing.
    Last Congress, we saved $2.2 billion on GSA projects and 
passed the Sandy Recovery Improvement Act. These were major 
accomplishments, and I thank everyone who was involved in them.
    This Congress, my two top priorities are going to be public 
buildings reform and disaster legislation.
    I think that we can exceed the GSA savings from last 
Congress, and we have some important reforms to tackle in the 
emergency management world. I hope that we can have disaster 
legislation and a GSA reform bill ready for the committee to 
consider in the first half of this year.
    Now, the purpose of today's hearing is to launch a public 
policy debate about the growing human and financial costs of 
disasters and to review if we, as a Nation, are responding in 
the most appropriate and cost-effective way.
    The private sector and Government are spending an ever-
increasing amount of money on disasters. FEMA alone has 
obligated more than $178 billion since 1989, over 1,300 
Presidential disaster declarations. Those numbers are going up, 
and I don't believe we fully understand why or what can be done 
to reduce those losses and protect our citizens.
    Over the past 8 years, Chairman Shuster and this committee 
made critical emergency management reforms through the Post-
Katrina Emergency Management Reform Act and the Sandy Recovery 
Improvement Act. These bills and the hard work of FEMA and our 
State and local partners have made tremendous improvements to 
our disaster response capabilities since Hurricane Katrina. Now 
is the time to take a look at how the Nation responds to 
disasters and where we want to head in the future.
    There has not been a comprehensive assessment of disaster 
aid and trends in at least 20 years. In recent years, 
specifically in reaction to Hurricanes Katrina and Sandy, 
significant disaster aid has been provided outside the standard 
disaster relief programs.
    There are many questions we should try and answer. For 
example, how much do we really spend on disasters? Where is the 
money going, and what are the key drivers of those cost 
increases? How have disaster programs evolved over time? Are 
they still targeted at the greatest need, and are they cost 
beneficial? What are the principles guiding Federal assistance, 
and how is it used to rebuild in the wake of a disaster? How 
can we bend the growing cost curve and ensure there is less 
damage and fewer people hurt in the future?
    Some of the answers may surprise you, as they have 
surprised me. I noticed in Mr. McCarthy's testimony, only a 
handful of disasters account for over 90 percent of all 
disaster spending since 1989. So if we want to understand why 
Federal disaster costs are growing, we need to understand why a 
handful of mega-disasters cost so much.
    Right after I became a Member of Congress, my district was 
hit hard by Hurricane Irene and Tropical Storm Lee. I remember 
in Bloomsburg, a family stayed in their home and tried to move 
their possessions to an upper floor, but Fishing Creek rose too 
quickly. The house next to theirs was knocked from its 
foundation. Water started gushing through their front windows 
as they called for help. They had to be saved by a helicopter. 
The woman there told me that she can never live in that home 
again.
    I will never forget that preparing for natural disasters is 
about more than the loss of possessions. It is our friends' and 
neighbors' lives that could be at stake if we do not plan in 
advance.
    As we were rebuilding, I was amazed that much of the 
Federal assistance was to rebuild in the same place in the same 
way, leaving people vulnerable to the next storm. We have to be 
compassionate and responsive to our citizens, but we also have 
a duty to be good stewards of the taxpayer dollar.
    I am committed to establishing a framework to tackle these 
issues and come up with solutions that are driven by facts and 
data rather than the emotion that inevitably follows a 
disaster. I don't have all the answers, but we will put 
together the right people to get them.
    The first step is this hearing, where we have brought 
together some key people to launch this discussion. I am also 
excited to announce that following this hearing, on February 
26, we will host the first of several roundtables on this 
topic. The first roundtable will look at disaster losses from 
all levels of Government and the private sector. I look forward 
to the ongoing conversations starting with hearing from our 
witnesses here today, and I want to thank you all for being 
here.
    I ask unanimous consent that members of the full committee 
not on the subcommittee be permitted to sit with the 
subcommittee at today's hearing and ask questions. Without 
objection, so ordered.
    I now call on the ranking member of the subcommittee, Mr. 
Carson, for a brief opening statement.
    Mr. Carson. Thank you, Chairman.
    Good morning, and welcome to the first subcommittee hearing 
of the 114th Congress.
    I am very pleased to return as ranking member of the 
subcommittee and, like Chairman Barletta, I look forward to 
continuing the good working relationship that we both share. As 
my friend Chairman Barletta stated, we were able to partner on 
several items before the subcommittee in the last Congress.
    And on a very personal note, I am deeply thankful that the 
chairman is back and ready for warfare. He is looking good and 
he is looking fit as always.
    And also, I would be remiss if I didn't mention a legend 
and a true American icon in our midst, and that is the 
Honorable Eleanor Holmes Norton.
    So among the many issues we will consider this Congress, I 
am very interested in examining the training programs available 
to our first responders. Ensuring timely and efficient 
emergency response whenever and wherever disaster strikes is 
critical.
    Now, some of the emergency managers in the great Hoosier 
State of Indiana have reached out to me regarding the limited 
accessibility of FEMA's training centers. In order to ensure 
ready responders, we must make certain that adequate programs 
are available and that sufficient access is available to those 
training programs.
    Further, after a disaster, we very sadly hear stories about 
elderly and disabled individuals having to fend for themselves 
because they were not adequately informed prior to the storm or 
they were unable to access resources after the storm. This was 
particularly the case after Hurricane Sandy. We must ensure 
that emergency preparedness and response systems are inclusive 
of vulnerable populations and those with language barriers.
    Moreover, in their written testimony, NEMA discusses 
concerns about the level of support services that States should 
be required to provide. I understand their concern, but it is 
2015 and no one should be left behind, especially our most 
vulnerable neighbors. So I think it is very imperative that we 
revisit some of those same issues in this Congress to ensure 
that everyone has access to the same information and resources.
    And thank you, Mr. Chairman, I look forward to working with 
you.
    Mr. Barletta. Thank you, Ranking Member Carson.
    Now, we will have two panels of witnesses today.
    On our first panel we have Administrator Fugate, the 
current Administrator of FEMA, who brings tremendous emergency 
management experience as well as successes in implementing key 
reforms and driving progress at FEMA.
    On our second panel we will be joined by Mr. Francis 
McCarthy, an expert at CRS, that will show us the trends in 
disaster assistance and how assistance has evolved over time.
    Mr. Bryan Koon, the Director of the Florida Division of 
Emergency Management, is here to talk with us about his 
experience, as well as help us see things from a State 
perspective.
    Administrator David Paulison who led FEMA in the wake of 
Hurricane Katrina and through the implementation of the Post-
Katrina Emergency Management Reform Act. He will discuss the 
changes he has seen in disasters and provide some thoughts on 
ways to address the rising cost of disasters.
    Finally, we are joined by Chief Brian Fennessy, Assistant 
Fire Chief for the Emergency Operations in San Diego, who will 
share his experience in emergency management, specifically the 
alarming trends in wild fire activity in this country.
    I ask unanimous consent that our witnesses' full statements 
be included in the record. Without objection, so ordered.
    Since your written testimony has been made a part of the 
record, this subcommittee would request that you limit your 
oral testimony to 5 minutes.
    Administrator Fugate, you may proceed.

   TESTIMONY OF HON. W. CRAIG FUGATE, ADMINISTRATOR, FEDERAL 
                  EMERGENCY MANAGEMENT AGENCY

    Mr. Fugate. Well, thank you, Chairman Barletta and Ranking 
Member Carson and other members of the committee. In my written 
statements, I talked about some of the things we have been 
working on since the Sandy Recovery Improvement Act passed. Mr. 
Chairman of this committee, I have to say, you helped us 
address many issues that have come up repeatedly.
    First off, I have to recognize the fact that you provided 
us the authority to recognize the tribal governments as an 
entity that could deal directly with the President in 
requesting disaster declarations, something they had sought for 
a long time. This committee ensured that became part of the 
legislation, and we have implemented it.
    You have also given us tools that we had identified through 
pilots and lessons learned in managing debris, but also in 
making sure that as we begin the process of rebuilding, we are 
able to speed up the process of identifying those large 
projects, obligating monies, and allowing more discretion to 
State and local officials on how to build back better. That was 
an important tool that we began using as far back as some 
damage from Hurricane Irene with the State of Vermont, and it 
has given us flexibility that States and local governments have 
asked for in building back better and building back to the 
future.
    The trends and disasters are not surprising to me. With an 
aging infrastructure, a concentration of populations in highly 
vulnerable areas that fortunately don't have a lot of 
disasters, but when they do occur, the costs are substantial. 
Particularly, when you look at what happens when the number of 
public buildings that are under or uninsured are damaged or 
destroyed. I think things such as dealing with individual 
losses that weren't insured, dealing with debris cost, dealing 
with response cost are always going to be part of the formula.
    But when you look at, most recently in Sandy, the billion 
dollars and more in some projects we are having to pay to 
rebuild structures, it is important for us to make sure that in 
the future we have built back those structures to where they 
are insurable and look at making sure that the insurance 
provisions are more strenuously applied and less opportunities 
to allow structures to come back for repeated assistance 
because they weren't insured.
    We firmly believe that we should do more diligent work with 
our State and local partners to ensure that when we build back 
we just don't look at old data, we just don't use cost-benefit 
analysis, that don't account for the future. But we also think 
we need to engage the private sector more strongly in ensuring 
risk. And in those areas where the private sector cannot insure 
that risk, ask hard questions, as you have pointed out, should 
we build back where we were, should we build back the way it 
was, or do we need to change? Because if anything, we know that 
many areas are subject to repeated disasters.
    I personally went into Arkansas last year to see damage 
from a tornado. I saw a school, fortunately not occupied, 
nearly completed, that was destroyed. I was informed by our 
staff from the regional office that that school was being 
rebuilt from a 2010 tornado where it had been destroyed. It was 
destroyed again.
    What really troubled me was we did not have an opportunity 
or did not seek the opportunity to make sure that school had 
safe rooms in it. And we have committed to and have now 
established that in tornado-prone areas, when we are dealing 
with schools and other public structures, that we will find a 
way to make sure that we fund safe rooms to protect children 
during tornadoes.
    So you have given us a lot of tools, many of which are 
still in the implementation phase. Some of them have not gone 
as fast as I would like. Part of it was the implementation and 
getting buy-in from our partners at the State and local level, 
but I am seeing early success. And I think it will be a good 
discussion to have with you and the committee over our 
findings, our challenges, and where success is taking place.
    I firmly believe that the role of the Federal Government is 
to support and not supplant our local officials, that FEMA is a 
support agency, and the cost of disasters is a shared 
responsibility. But I do think it is appropriate that when 
disasters exceed the capabilities of State and local 
governments that we must be there to support them, not only the 
initial response but to ensure successful recovery.
    Thank you, Mr. Chairman.
    Mr. Barletta. Thank you, for your testimony Administrator 
Fugate.
    I will now begin the first round of questions limited to 5 
minutes for each Member. If there are additional questions 
following the first round, we will have additional rounds of 
questions as needed.
    We all know disaster costs are going up dramatically. What 
do you think are driving those costs, and can we do anything 
about them?
    Mr. Fugate. Well, one way that people have said to look at 
disaster cost is reduce eligibility or erase thresholds for 
declaring disasters. But as I think you see, the smaller 
disasters are not what drives the majority of the big-ticket 
items; it is these larger events.
    And I think it comes back to the many cases in which we 
have aging infrastructure; dense, populated areas in vulnerable 
zones, whether it is from hurricanes, flooding, earthquakes; 
and those costs, I think historically, were things that we 
looked at, such as insurance and other tools to manage that 
risk. But that risk has now, I think, moved more towards the 
Federal taxpayer in the FEMA programs.
    I think over time it was the unintended consequences of 
these programs that again were seen as, instead of being a 
support of last resort, oftentimes the first resort for the 
coverage of insurable property that was not insured and those 
losses. Again, it is really a decision that we have to look at, 
how do we best ensure communities are able to rebuild, but at 
the same time, don't support or continue growing the risk?
    I think we have to understand there is a certain amount of 
risk out there right now. We have modeled some of these 
disasters and they are actually bigger than Sandy. The exposure 
for just south Florida for a repeat of the Great Miami 
Hurricane would be in the hundreds of billions of dollars in 
Federal cost, exceeding both Sandy and Katrina. So it is, I 
think, something we need to look at.
    But I think more importantly, we have to make sure that as 
we go in after disaster, we are setting the stage for the 
future not to come back and repeat it over and over again.
    Mr. Barletta. We continue to see new disaster aid programs 
emerge ad hoc in reaction to disasters. They all seem to have 
different rules and requirements and do not seem well 
coordinated or focused on obtaining the best outcomes. Is this 
something Congress should take a look at so that we can 
streamline these programs and ensure that they are cost 
effective?
    Mr. Fugate. Mr. Chairman, I would go back to the Post-
Katrina Emergency Management Reform Act.
    One of the things you directed FEMA to do--we were slow in 
doing it, but it is now in place--is to build a national 
recovery framework to take all of those various programs and 
look at it more holistically when working with our State and 
local partners.
    I think Congress needs to know what the total cost of 
disasters are. There shouldn't be hidden costs buried in other 
appropriations. But I will also caution that the flexibility of 
those programs and the fact that we deal so oftentimes with 
preexisting conditions that FEMA's programs aren't going to 
deal with, that flexibility is oftentimes accessory building.
    And let me give you one example of community block 
development grant dollars. When we deal with housing issues in 
a disaster, it is generally the affordable housing base that 
was heavily damaged, not insured, but we are not the program 
that rebuilds permanent housing. We deal with a temporary 
response.
    So if we are not able to partner with HUD, the risk you run 
into is a rebound effect. We meet immediate needs but there is 
no solution long-term.
    This is why you saw in Hurricane Katrina people in travel 
trailers for years after that disaster because we did not 
approach this in the beginning holistically. For example, if we 
have these many houses, we are going to have to start looking 
at affordable housing. We need to start these programs almost 
simultaneously to the recovery programs.
    So I would say the flexibility and the ability to take 
these different programs are important tools we should not just 
discard. But I do think it is important to have a total 
accounting of what the real costs of disasters are, not just 
what the Stafford Act under the disaster relief fund may be 
providing.
    Mr. Barletta. What incentives do you think the Federal 
Government could provide the States to encourage better 
disaster preparation planning, budgeting, and smarter 
rebuilding to reduce future losses and costs?
    Mr. Fugate. Well, the State, NEMA will present to you--and 
I think again if I put my State hat on, I would look for more 
Federal participation early in that process.
    One of the things that I have heard from both the 
Government Accountability Office and from the IG is we ought to 
be raising the thresholds for disasters. I am against that for 
several reasons: One is, I think it penalizes large population 
States because it puts them into almost intolerable levels of 
disaster to get assistance; at the same time, smaller States 
would have little impact on them.
    Many States have developed their own public assistance and 
individual assistance programs, but they only apply them 
generally after they have been denied for Federal assistance. 
There is almost a disincentive for a State to manage smaller 
disasters for fear that if they do that it may not make them 
eligible for a FEMA disaster declaration under the President's 
authorities.
    So what we have been looking at is--our current model--once 
you reach the threshold the President has declared a disaster, 
we cost share back to the first dollar. We have been exploring 
what if you didn't raise the threshold but you looked at how 
far back do we go and give States more predictability about how 
much they are responsible for before we do come in with Federal 
assistance and base it just on per-capita factors but look at 
the exact State, the economy, the budget reserves, the capacity 
of the State.
    But I think some States have been very progressive in this 
area. However, other States and their State legislators have 
oftentimes seen that the Federal Government will come in, go 
back to that first dollar, and having resistance to building 
their own capacity. And I think, again, if we could build more 
capacity for the recurring routine disasters at the State and 
local level, it would allow us to focus on those large 
disasters.
    I don't think it necessarily brings the big-dollar ticket 
items down, but it does start growing and building more 
capacity across the States for a lot of the recurring events 
that we find ourselves involved in.
    Mr. Barletta. Thank you.
    I will now recognize each Member for 5 minutes of 
questions, and I will start with Ranking Member Carson.
    Mr. Carson. Thank you, Chairman.
    Thank you, Administrator Fugate. The International 
Association of Fire Chiefs notes that FEMA does not fully 
reimburse fire departments for their firefighting efforts when 
called to service. In addition, FEMA does not cover full wages 
required by the Fair Labor Standards Act or the back-filled 
costs of replacing a firefighter dispatch on a mutual-aid 
agreement.
    Sir, is FEMA prohibited by statute from fully reimbursing 
fire departments for these costs? If not, why is FEMA not fully 
reimbursing the fire departments?
    Mr. Fugate. I would need, Congressman, specific 
information. I would have to look at the cases. FEMA funds 
those extraordinary costs above and beyond what was budgeted. 
So if you were already budgeted to respond to fires and you do 
get declared, that does not necessarily become eligible.
    But overtime cost, cost of backfill, where you are 
supporting mutual aid under the emergency management assistance 
compact going across State lines, and it really comes back to 
what the mutual-aid agreements are ahead of time.
    One of our challenges has been, unless there is an 
obligation to pay just because you have a disaster declaration 
doesn't make it eligible. So we do try to look at the 
nonbudgeted extraordinary costs. We try to be very aggressive 
in identifying those costs. They are right; we don't go back 
and do 100 percent. Our cost share is 75/25 percent and then 
the State and locals determine how to do that.
    Under fire management assistant grant cost, we, again, do 
not go back to the first dollar because each State has an 
annualized budget for wildland fire fighting. And so, again, we 
look to determine if there is an extraordinary cost. So if your 
office will share with us the specific details, we will go back 
and research that.
    But my position has always been if it is eligible, it is 
eligible, and we look at all those extraordinary costs above 
what they budgeted for the day-to-day activities should be 
reimbursable, but specifically to what case and how much. If 
they can give me examples, we will look at it and try to make 
sure that we were doing the right thing during that timeframe.
    Mr. Carson. Thank you, sir.
    Mr. Barletta. I will now recognize Mr. Curbelo.
    Mr. Curbelo. Thank you, Mr. Chairman.
    Administrator Fugate, thank you for your presence here this 
morning, and thank you for your service to the people of 
Florida over so many years. We remember you very fondly and we 
miss you at times, so thank you very much.
    I represent south Florida where a large portion of my 
district lives on or near the coast. One of the constant 
worries I hear from my constituents back home, especially in 
the Florida Keys, is the need to reform the National Flood 
Insurance Program. I am a cosponsor of the Flood Insurance 
Premium Parody Act, a bill which would extend the recent NFIP 
reforms to business properties and owner-occupied second homes. 
And I feel it is critical these properties receive the same 
relief already provided to residential properties and single-
family homes afforded to them under the Biggert-Waters Act of 
2012.
    Can you share your thoughts on what best can be done to 
provide affordable flood insurance for my constituents? Do you 
feel that we should apply to commercial properties and second 
homes the same formula for yearly rate increases received by 
residential properties?
    Mr. Fugate. Well, first of all, you all may miss me, but 
you have got a great guy in Bryan Koon, so the State is in good 
hands.
    You just opened up a very good philosophical debate and a 
can of worms of how far the flood insurance program should go. 
Here is my question: If the private insurance companies can't 
insure it, is it something that the Federal Government should 
assume the risk? Because we are doing risk transference.
    Any time the private sector can't cover the risk and we 
take on that responsibility, you, the taxpayers, are backing 
it. That may be good policy. That may be the desire and the 
intent of Congress, which I would support if that is the 
desire, but I must always caution that in transferring that 
risk back to the flood insurance program, which is over $20 
billion in debt, we have to understand that it is not an 
actuarially sound program. It will not be able to pay back its 
debt. And growing that exposure may be good policy, but I think 
it is one we need to go forward and understand what that risk 
is.
    The challenge is, understanding the built infrastructure 
and how we protect that, but also, how we enforce the future 
and ensure that we don't continue to grow that risk. And that 
does not mean we cannot build in coastal areas. It does mean we 
have to build differently.
    So I think the question that I would narrow back down to 
is, we have got a lot of businesses. We have a lot of homes. We 
have a lot of property that is exposed. Insurance is not 
available or not affordable.
    It will be a huge economic loss to local jurisdictions from 
tax-based losses, business losses, jobs loss. If it makes sense 
to insure that, then we will implement it. But I also caution 
that we have to make sure we don't set up an unfair system that 
continues to grow risk by allowing people then to build in 
areas without taking the steps, which can be more costly but 
then transfer that risk back to us, the Federal taxpayer.
    It is a shared responsibility. It is an interesting debate, 
we will be more than willing to engage in it, but I think we 
have to be upfront that there are many people, both in Congress 
and outside, that do not want to grow the flood insurance 
program and that exposure and others who think they do. We 
would be interested in participating in that debate, but we 
really think this is the sense of Congress when we really need 
the guidance from Congress on what this should be.
    Mr. Curbelo. Thank you, Mr. Fugate.
    And the State of Florida has learned a lot since 1992 and 
has changed a lot. Do you feel that the State is adequately 
prepared today for a potential storm? You referred to one 
earlier, a Great Miami Storm. Do you feel that we have done 
enough, from your perspective, to prepare and to mitigate 
potential damages?
    Mr. Fugate. I will leave it to Bryan to talk about what 
under leadership he and Governor Scott have been able to 
achieve. But I want to point out one thing that Florida did. It 
was a hard, painful lesson. It was hard fought. And there is 
always attempts to take and walk back. But under Governor Bush, 
it was the establishment of statewide mandatory building codes, 
learning the lessons of south Florida but across the State.
    Probably the one thing that is saving taxpayers more money 
and making sure that you still have commercially available 
insurance for the wind pools is the fact that Florida did 
strengthen its building codes and the State does enforce it 
across all counties and cities. It was a courageous step given 
that many people said it would make homes unaffordable. The 
reality was, without that building code they would have been 
uninsurable.
    And as we continue to see more people buy into the Florida 
market, I think that's a testament to better built homes for 
the environment they are in, and this is a lesson I think all 
States should pay attention to. When you have the right 
building codes and land use to manage risk, that risk can come 
down to the point where it is insurable, and the private sector 
can do a better job of managing future risk without it 
defaulting back to Federal programs.
    Mr. Curbelo. Thank you.
    Thank you, Mr. Chairman.
    Mr. Barletta. Thank you, Mr. Curbelo.
    And I would like to recognize Ms. Norton for 5 minutes.
    Ms. Norton. Thank you very much, Mr. Barletta. I am glad to 
see you back in the chair.
    Mr. Fugate, the Nation's Capital barely escaped Sandy. We 
were very grateful, just like we escaped the snowfall this 
time. All the scientists tell us that we are headed for major 
disasters. They tell us that there is no longer debate about 
whether there is climate change but only about how to manage 
climate change. And so I am interested in issues, and I will be 
talking to the next panel about predisaster mitigation. The 
Member was asking about Florida. I noticed that they are 
building right in the ocean virtually but trying to do some 
predisaster mitigation as they do.
    FEMA has been helpful here in what we have been trying to 
do with the so-called 17th Street levee on the Mall. Without 
that levee, the Washington Monument and indeed the entire 
monumental core would be exposed to horrific flooding. 
Rebuilding downtown Washington and the monumental core, and 
those steps would have been taken. I certainly hope, since 
steps have been taken--and that levee was done before the final 
word was in on climate change--I would be interested in your 
view as to whether or not you think that levee could forestall 
a seriously Sandy-like storm.
    But I am also, because it has taken so long, interested in 
the drawing of the flood maps. As I understand, and this is 
what gives Government a bad name, the work of the Army Corps of 
Engineers for certification is done separately from FEMA or 
from other agencies. Why can't that work be done concurrently 
so that they look to see that the levee is constructed properly 
and they go get on with the next step, rather than in some 
sequential fashion which assures it will be delayed?
    Mr. Fugate. As far as that, I will take that back to staff. 
I know we have been going round and round trying to get this 
thing built and get those maps updated. Part of what you gave 
us with the Sandy Recovery Improvement Act was at least things 
like the environmental historical reviews, which agencies used 
to do independently, we now do concurrently, so we are taking 
some small steps to try to look at these projects.
    And the President has given some pretty good direction on 
this. He said, you know, when we were doing some of these 
capital improvements we shouldn't be spending years doing the 
studies, we should do our studies together. We are not going to 
change the requirements, but it doesn't mean we should do each 
study and wait for the next study. So we are moving in that 
direction but not as fast as we should.
    As far as the protection for the future, none of these 
designs are the 100-percent solution to future risk. What they 
are really designed for are risk and the 1 percent or more. And 
I think you just identified one of our challenges. We have 
always looked at mitigating back to a 1-percent or less risk. 
Unfortunately, we saw this in Sandy. Some of the mitigation 
work done after Hurricane Irene was done to that standard, and 
Sandy went over it and we lost a structure anyway.
    So we are asking a different question. Maybe 1 percent 
makes sense for a lot of things, but for critical 
infrastructure like hospitals, fire stations, maybe we should 
build to a higher standard. We are currently working with the 
interagency on the Federal side to come up with a more 
stringent standard, not just building 1 foot above our base 
flood elevation, which is the 1-percent risk, perhaps even 
building higher. Not because we have data to drive that per se, 
but because of the uncertainty of the future data and these 
investments of literally tens to hundreds to billions of 
dollars of our future, but making sure we are building to that 
future with that uncertainty.
    Ms. Norton. I really appreciate what you are saying. The 
monumental core is irreplaceable. I wonder if, and I would ask 
you to look into this, whether or not one could--and realize 
this would mean further delay--whether you could look into the 
17th Street levee and see whether it should be altered now, 
right in the beginning to make sure that it meets the standard 
you have just indicated may be necessary.
    Could I ask one more question in light of a recent tragedy 
that occurred here, and that was the WMATA tragedy where we 
lost a human life and more than 80 people went to the hospital. 
It was, sadly, reported, at least initially it looks like 
coordination in terms of communication underground and 
aboveground was lacking. Now, this is, what is it, 13 years 
after 9/11, and, of course, FEMA is there for natural as well 
as terrorist disasters.
    Has FEMA considered this apparent failure what it could 
mean not only in a real natural disaster but, heaven forbid, in 
a terrorist disaster? Are you involved in this disaster and 
helping WMATA and the various agencies, city and Federal, 
involved to right this situation so that we are sure, 
particularly underground, there is the kind of communication 
that could enable rescue to occur?
    Mr. Fugate. Yes, ma'am. Looking at this--first of all, I 
have a personal equity in this. That is the subway that I ride 
home on. I was not in town. It went a little bit earlier than I 
normally depart, but I am on that train Monday through Friday, 
both coming in and going home. I know that very spot in the 
tunnel. I can tell you, anytime a train stops in a tunnel now 
people start looking around, where before it was just kind of 
like the normal pause, people are now looking around going, why 
are we stopped?
    Our Office of National Capital Region Coordination does 
work with all those entities. I would ask that we wait until we 
get more from the investigations to find out what did happen, 
but we will pledge our support through our Office of National 
Capital Region Coordination both to the district and to Metro 
for any assistance they require from us, from planning, 
training, and exercising to be better prepared for future 
incidents.
    Ms. Norton. Thank you. Is the Office of National Capital 
Region Coordination currently involved with this investigation 
and with this work?
    Mr. Fugate. We are not involved in the investigation, but 
we are there to support all the parties if they request us. And 
I think what will happen when we do get some of the details and 
look at some of the recommendations of what to do better, we 
would be in a position to support both the district and Metro 
if they request our assistance.
    Ms. Norton. Thank you.
    Mr. Barletta. Thank you, Ms. Norton.
    Chair recognizes the gentleman from Louisiana, Mr. Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman.
    Mr. Fugate, thank you very much for being here today. I 
appreciate your testimony and certainly share a lot of friends 
of yours, Paul Rainwater and Kevin Davis and others.
    In your testimony, I noticed that you made reference to the 
study that was done by the Congressional Budget Office noting 
that every $1 invested in mitigation activities saves $3, and, 
of course, the FEMA study National Institute of Building 
Science that shows that there is $4 in savings. I noticed last 
year in FEMA's budget, as I recall, they were zeroing out of 
the predisaster mitigation.
    Just curious, you made reference in your testimony, curious 
about your, I guess, how FEMA has responded to the findings of 
those studies.
    Mr. Fugate. Well, the challenge with the predisaster 
mitigation fund has been it has diminished over time and was 
increasingly being directed to where it would go. You asked us 
to cut our budgets each year. We had to make decisions where 
those cuts took place. We think mitigation is important, but we 
also knew the capacity to respond, recover, and manage all the 
other programs were important too.
    There has been a lot of talk about the predisaster 
mitigation and its role and the cost savings. I would also be 
pragmatic in saying those savings are realized if the structure 
you mitigated gets hit again.
    Mr. Graves of Louisiana. Sure. I will give an example. 
Hurricane Katrina, I think if you add everything up from the 
2005 hurricanes you get somewhere around $150 billion in total 
spending. Based on some back-of-the-envelope calculations we 
did in Louisiana, I think we had spent about $8 billion in the 
front end. We probably could have saved about $80 to $90 
billion in recovery.
    Ms. Holmes Norton made, I think, a very appropriate 
connection between the Corps of Engineers and FEMA. And you and 
I have had this discussion in the past. In numerous instances 
the Corps of Engineers has been directed by Congress to carry 
out mitigation or resilience projects. And some of those 
projects, in the case of Louisiana, had been in the development 
phase in excess of 20 years. During that same period of time 
FEMA has expended over $1 billion in response of recovery 
claims in these same projects areas. And in one case, I 
remember the total, where FEMA exceeded $1 billion in payouts, 
the entire project was estimated to cost $586 million.
    Can you talk a little about your coordination with the 
Corps of Engineers to ensure that some of these mitigation 
measures, if predisaster mitigation is off the table, which 
personally I believe may be penny wise and pound foolish, can 
you talk about some of the coordination there to ensure the 
resiliency of some of these communities and of course cost 
savings for your agency.
    Mr. Fugate. You know, we work very closely with the Army 
Corps of Engineers, both in the flood insurance mitigation 
response and recovery. I also have to point out, you could 
authorize a lot of projects. If you don't fund them, they don't 
get built. If you go back and you pull the budget and you look 
at how many projects that the Corps has been authorized for and 
you look at the funding, there is a significant mismatch.
    Again, if we were able to foretell the future and know 
exactly where disasters would happen, I think we would probably 
be better at strategizing where to make those investments. But 
we have potential risk in places that are not seeing a lot of 
disasters, yet the exposure is tremendous.
    And so, again, we do work with the Corps, but I think it 
again comes back to making very hard choices. I mean you have 
to make appropriations decisions. There is no doubt about it. 
There is not enough money to do everything.
    And again, for the Corps, there are oftentimes more 
projects identified than they have funding and they are having 
to make decisions across the States, the territories of where 
to make those investments.
    Mr. Graves of Louisiana. Well, look, personally in regard 
to the Corps of Engineers, I think the cut in funding is 
largely in response to their performance, or inability to 
perform in many cases, which you may not share that opinion 
based on my personal experience.
    But one thing we had posed to FEMA years ago was the idea 
of having some flexibility in HMGP when these Corps projects 
weren't funded, yet they yielded high benefits to the taxpayers 
in terms of resilience and cost savings for disaster 
mitigation, yet FEMA, we were unable to work that out. Could 
you perhaps talk about that a little bit. As I recall, I 
believe there was a prohibition in using HMGP dollars in cases 
where you had a federally authorized project in place 
regardless of whether there was funding or not.
    Mr. Fugate. Well, this kind of goes back to authorization 
language and appropriations language where we do have 
prohibitions against duplicating underfunding sources. When we 
don't we try to. And again, what we try to do, and we have had 
some success, where a project was not originally authorized by 
the Corps and we were able to fund it but the Corps was able to 
fund it, we were able to get good outcomes.
    But I think it comes back to when we have nonduplication of 
Federal efforts, one program is already authorized, maybe 
didn't have the funds to do it, is--again, this is something 
the committee has looked at--is there additional language you 
want us to have in the Stafford Act? We don't want to routinely 
supplant or get into augmenting other Federal budgets if you 
are not funding it. We don't want to look at the disaster fund 
to sidestep the appropriations of Congress, but obviously, it 
is something that the committee could look at and give us 
guidance on.
    And if we are not interpreting it correctly, I am willing 
to go back and look at it. But generally if it is already 
authorized in another program, there are limitations on what we 
are able to do. It would actually be exceeding Congress' intent 
and authorization for us.
    So we will work with the committee on it. I don't really 
have a real issue with that. But I also caution that, you know, 
some of the feedback I have gotten is we don't want to open up 
a can of worms where suddenly the disaster relief fund is 
bypassing Congress' intent by funding things Congress had 
chosen not to fund that year.
    Mr. Barletta. Thank you.
    Chair now recognizes the gentleman from Pennsylvania, Mr. 
Costello.
    Mr. Costello. Thank you, Mr. Chairman.
    Administrator Fugate, I recall, as a county commissioner, 
following either before or just following a storm of a 
significant magnitude, speaking with my emergency services 
department and them describing the various obligations that 
they needed to undertake to apply for and ultimately process an 
application for FEMA disaster assistance grants or grant.
    The question is, in looking at the recent GAO report, FEMA 
was criticized for the significant costs they incurred to 
administer disaster assistant grants. My question, what is FEMA 
doing to reduce its own administrative costs as well as the 
administrative burden often placed on States and locals who are 
trying to get the assistance to where it is needed for 
recovery?
    Mr. Fugate. Well, first up, one tool that we have used 
aggressively has been moving away from putting in a lot of 
staff and renting temporary facilities on a smaller disaster 
when we can work it from the region, so that is driving down 
cost.
    But probably the other one is the tool you gave us in the 
Sandy Recovery Improvement Act and that is allowing us to do 
these alternative projects and being able to use an estimated 
cost and come to a resolution on a project cost without doing 
actual cost.
    You know, I would like to get rid of a lot of the 
oversight. I like to get rid of a lot of the burden. I would 
like to simplify the programs to where we are able to make 
those determinations and get funds to people appropriately. You 
have given us those tools. On the other hand, you also hold us 
extremely accountable for any overpayments or any ineligible 
costs. That requires a bit of oversight. So there is a balance 
there.
    I think the committee struck an extremely important balance 
with the Sandy Recovery Improvement Act by allowing us to move 
away from all the actual costs, where we have to continue to 
audit and review and survey the progress of the project to 
being able to come to a resolution on the front end, make a 
determination, agree to that, and make the payout.
    I think we are doing this with the understanding that we 
have accountability both to this committee but to the taxpayers 
to make sure that we are only approving what was eligible, but 
at the same time it significantly reduces our cost in overhead 
of managing that, and it is giving more flexibilities to the 
local jurisdictions.
    Now, this is a new tool. Not every State has embraced it. 
New Jersey has not been as aggressive as New York. It could be 
because the projects in New York lent them to the project, but 
we have also seen, particularly in debris, Oklahoma was able to 
take advantage of these tools and it vastly sped up their 
experience with debris and cost reimbursement.
    So knowing what we have had in the past and what we have 
going forward, I have seen improvements. We have gotten 
feedback. We need to constantly work on that to get it better, 
but there is a balance there between too much burden and not 
being accountable to the taxpayer.
    Mr. Costello. I can certainly appreciate that balance.
    Following up on the Sandy Recovery Act, which you 
mentioned, the increase in small-project thresholds to $120,000 
I think is one of the things you were alluding to in terms of 
simplified procedures, without suggesting that it should be 
increased or decreased. Could you share your observations on if 
further efficiencies or expedited recoveries could be realized 
if that threshold were modified? Or are you comfortable with 
where that is? I think that covers 95 percent.
    Mr. Fugate. No, I am not comfortable. I let staff talk me 
out of where I wanted to go. I thought that number should have 
been higher. We were looking at the percentage of projects that 
would fall in that, and the majority of them do. But I still 
think there is room to move it up. We have a lot of other 
Federal programs that administer much larger dollar figures 
with simpler grant processes.
    I am comfortable that, through the IG's oversight and our 
ability to really focus in on what is eligible, that we can 
move that higher. I would also like to encourage input from our 
colleagues at the State and local level through their 
organizations.
    But I think it is something the committee should look at 
too as we don't want to just raise that threshold so that we 
don't have any accountability. But I think there are a lot of 
things that we could do with that that would simplify the 
oversight, would not significantly grow the risk in exposure 
for uneligible work, and would drive down the cost and speed up 
recovery.
    So what that number should be, I would like to work with 
the committee. I think we can go higher than $120,000. I 
thought we should have when we started this. But staff was able 
to pull the data, and, as the chairman says, we want to be data 
driven.
    Mr. Costello. Right.
    Mr. Fugate. We looked at data. And the majority of the 
projects that were falling in this category fall into that.
    Mr. Costello. Like 95 percent or something like that?
    Mr. Fugate. Yes. But I still think there is room to move it 
higher. My ideal world is we have small projects up to the 
threshold of the alternative projects and we speed up all of 
the disasters. Currently our threshold for the alternative 
projects is $1 million. I don't know if small projects goes to 
$1 million, but I think, again, we give States the flexibility 
to choose how they want to do that.
    But if we can maintain fiscal accountability, I am not 
opposed to raising the minimum threshold for small projects. I 
would defer to my State colleagues how high they think it 
should be and what they can manage. But I think as long as we 
can be accountable, it speeds up the process, drives down the 
cost to the taxpayer, and it doesn't change eligibility, so it 
would have been paid anyway, but at substantially less overhead 
cost to administer.
    Mr. Barletta. I would like to work with you on that. I 
think there is something that we can do. Time is money when it 
comes to rebuilding.
    I would like to recognize each Member for an additional 5 
minutes for questions, and I will start.
    We saw firsthand the tremendous progress already being made 
to rebuild and protect NYU Langone Medical Center in New York 
City, particularly when compared to the significant delays 
experienced by Charity Hospital in New Orleans. Can you 
attribute the expedited recovery to the new authorities granted 
to FEMA in the Sandy Recovery Improvement Act? And what other 
benefits are being experienced?
    Mr. Fugate. As far as the benefits of the Sandy Recovery 
Improvement Act, it is absolutely an important tool.
    The other lesson we learned from the events of Katrina is 
there are certain types of projects that are technically 
difficult that exceed the average capacity for people to 
manage, you need to have subject matter experts. So we engaged 
very early, we identified where these projects were going to 
be, whether they were hospitals or other large public 
infrastructures and we brought in a lot of experts.
    But it wasn't until you passed the Sandy Recovery 
Improvement Act that we really had a tool to allow us to come 
to resolution. I think if we had been using the old program and 
only doing actual cost, there would have been more uncertainty 
for the applicant on what they could and couldn't do, it would 
have been more overhead in making those decisions, and they 
would not have had the ability to get what they were going to 
get from us and move forward. As it is, we have obligated the 
majority of those funds. They are now engaged in repair and 
construction. We still have projects from Katrina that have not 
even been resolved yet.
    So I think, one, better understanding of the complexities 
of these projects on the front end. But, two, you gave us a 
tool we did not have before to more engage the applicants in 
getting a better resolution on what the project involved, 
getting a figure agreed to, and obligating those dollars on the 
front end versus waiting for construction to start and then 
constantly coming back for revisions and updates.
    Mr. Barletta. What are some of the most alarming trends you 
have observed in disaster preparedness, response, and recovery?
    Mr. Fugate. I think it was alluded to by Representative 
Carson. When we talk about vulnerable populations, as we have 
built our programs, it is something that--and I have some 
disagreement with my State colleagues on this--nobody disagrees 
on the importance of getting this right. One of the things I 
observed is we always tend to treat the hard-to-do as an annex 
in our planning, our funding, and our programs. Instead of 
looking at the communities as they are in building our 
programs, so that they don't say, well, we need to have an 
annex for kids or we need to have an annex for people with 
animals or we need to have an annex for the elderly, they are 
part of the community, we need to plan more holistically, we 
need to plan for what is there and not exclude it.
    And when you look at the vulnerable populations--and I will 
be honest with you, one of the growing challenges to disaster 
response is the increase in poverty and many in the middle 
class who have no safety net, who a disaster will wipe out all 
of their savings and wipe out their most important equity, 
generally their homes. We saw this in the 2004 hurricanes--I 
don't think people quite understand how big a role that poverty 
and lack of safety nets in the middle class who are just one 
payment away from losing it all makes them extremely vulnerable 
to disasters and very difficult to recover.
    And I think this is one of the things, if we look at our 
programs, we cannot forget there are many parts of our 
community that are extremely vulnerable. Those numbers are 
growing. And it has a lot to do with the economy, the 
distribution of wealth, and the lack of resources among many 
people who consider themselves middle class but one disaster 
wipes them out and they suddenly find that those safety nets 
are not there for them either.
    Mr. Barletta. Thank you.
    Chair will now recognize Ranking Member Carson for 5 
minutes.
    Mr. Carson. Thank you, Chairman.
    Administrator Fugate, NEMA's written testimony talks about 
the need for clarification, for functional needs, support for 
general population shelters, and that FEMA and the DOJ have 
provided conflicting information. What is your sense, sir, 
about when will joint guidance be issued from FEMA and the DOJ?
    Mr. Fugate. There has been a lot of guidance issues. I am 
not sure, I will have to get back with NEMA on what more 
guidance is needed. I know there are ongoing discussions. But 
let me tell you what the outcome should look like, because I 
think if we don't know what the outcome looks like, we are 
going to talk a lot of process. And as a State director, I was 
very sensitive to this issue. As a local emergency manager, I 
was very sensitive to this issue. But a perfect--I won't say 
perfect, it shouldn't be perfect, it should be the 
expectation--you arrive at a shelter, you should not be turned 
away. If you arrive because you have got a pet, people have 
pets, we have to plan for it. If you show up with an oxygen 
tank. If you show up with a family member on a ventilator.
    Now, it may not always be the best place, there may be 
other options. But I think what you want is, in a crisis, 
people don't really have the luxury of picking and choosing 
where they are going to go, so we would like to get to where 
most people, the majority of the population, can choose their 
shelter based upon what is convenient for them, not what we 
have only been willing or able to provide.
    We are not there. And it is unfair to say that States and 
local governments should be there immediately. We are not where 
we are at because of lack of effort. It is that States and 
locals have to deal with existing buildings, many of which were 
not designed for people with disabilities. There are 
requirements to upgrade them, but many times it is minimal. The 
level of care, the type of equipment, and durable goods.
    So this is a goal I think most of us agree to work towards: 
People should not be turned away from shelters because they are 
not easy to accommodate. But we also have to understand that is 
a lot easier to say than do. And there are some real 
challenges, both financially and the practicality of what can 
be done to get there.
    And so we will continue to work with our partners at NEMA, 
with the Department of Justice, and with the disabled community 
who advocates for that right. And I think that is probably the 
thing that drives me passionately, is this is a civil right.
    Mr. Carson. Absolutely. Absolutely.
    Mr. Fugate. So we have to do everything to ensure that we 
are maintaining that, while understanding this is not easy. If 
it was, nobody would be saying we have questions. But there are 
a lot of questions asked. What is a reasonable accommodation? 
To what degree should they be prepared for that? To what level 
should they implement that care? And probably the hard question 
is always, where is the money going to come from? Oftentimes in 
local governments, who have seen tremendous reductions in their 
staff and funding base, yet still expected to provide the 
service in a crisis, many of which will not be declared by the 
Federal Government, would not receive Federal dollars.
    Mr. Carson. Lastly, sir, I have heard from some of my 
constituents about the long waits to attend FEMA's training 
center in Alabama, and as well as the I guess you could say 
insufficient funding for emergency response training programs 
in general. Could you provide for us, sir--because your last 
statement was so phenomenal and deeply insightful, we 
appreciate that--could you provide the subcommittee, sir, with 
some description of each of FEMA's training programs and an 
overview quickly of the budget for the last 5 years?
    Mr. Fugate. Well, the Center for Domestic Preparedness is a 
hard place to get into because there is high demand. It is the 
only non-DOD facility in the United States that offers live-
agent training, meaning that your HAZMAT team will actually go 
in and experience what it is like to handle lethal nerve agents 
and biological agents in a controlled environment. It is 
priceless training for those teams.
    Our National Fire Academy in Emmitsburg is a capstone 
program for many fire executives, as well as training many 
specialized programs across the country, where people come in 
both for training there, but also training that is delivered at 
the State and programs that are developed jointly with the 
National Fire Academy. And then the Emergency Management 
Institute, co-located in Emmitsburg, providing training for 
State and local emergency managers, bringing together many of 
them outside of their normal work environment to share their 
experiences, but also get the latest updates.
    It is both a capacity issue and staying current in these 
programs. So, again, the Center for Domestic Preparedness, we 
have funded for so many seats, we maximize that. The staff 
continues to look at how we can increase capacity. But it is a 
finite resource with high demand, and we try to accommodate 
those that have applied. But it is, again, a premier facility 
with capabilities not found elsewhere, with a very high demand 
for that resource.
    Mr. Carson. Thank you, sir.
    Mr. Barletta. Thank you, Mr. Carson.
    The Chair recognizes Ms. Norton for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman.
    I have just one question. I would like to take advantage of 
the long experience that Mr. Fugate has had in disaster 
mitigation and ask for his candid views.
    And here I am not asking you about funding. That is not 
something you control. I want to contrast the difference 
between the way Congress behaved after the terrorist attack and 
the way it behaved after Katrina and Sandy.
    After the terrorist attack, it scared the dickens out of 
the country, and I must say that it scared us so badly that 
after the fact we actually threw money at every jurisdiction. 
There isn't a State that didn't get funds to prepare for the 
next disaster attack, including States that Al Qaeda never 
heard of, never would venture to care about. But every State 
got some funds. I was on Homeland Security at the time and saw 
it happen.
    Again, I am not asking you about funding. I recognize and 
appreciate that predisaster funding, we have over and again 
found by this subcommittee and committee, saves us enormously, 
$4 savings from $1 invested. As we look at Katrina and Sandy, I 
recall that in order to get funds for Sandy even after New York 
and New Jersey were laid low, it took two votes to get funding 
for you to begin to do your work after Sandy.
    Now, what I really want to know is, as an agency which has 
looked at disasters now, terrorist and natural disasters, for 
decades, whether or not the agency needs revisions, whether in 
law or structure. I mean, can you sit there in the face of 
Katrina and Sandy and not envision, when you see hurricanes 
occurring where they are not supposed to occur, when you see 
climate not only changes, but disasters in parts of the country 
that have never known them, is the FEMA of today, structured 
decades ago, the FEMA that can handle the unknown that we now 
see before us?
    And here I am looking for how the agency, whether it needs 
to ask for revisions in law or in its own structure, rather 
than what you encountered after Sandy. And after Sandy, the 
finger was pointed right at you. It didn't matter whether we 
gave money or how you were structured, you just had to take it.
    Instead of just taking it, it does seem to me that the 
agency with the expertise should come before this panel and 
tell us whether you are prepared for a disaster, for an 
earthquake to occur in California of the kind it has never seen 
before, or shall we just sit here and think that it will never 
happen and just wait for it to come after us?
    Is the FEMA of the 21st century prepared for what we know 
now, from our own experience with Katrina and Sandy, is surely 
to come in parts of the country where we never expected? And if 
so, if you think it is prepared, you should tell us. If it is 
not fully prepared, I should ask you then, is the agency 
looking at how it could make recommendations for what appears 
to be an entirely new era in both terrorist disasters and, for 
that matter, now we know natural disasters? Are you looking at 
the future?
    Mr. Fugate. I learned a long time ago the person that says 
that we are fully prepared and we know exactly what is going to 
happen is a fool who will soon be----
    Ms. Norton. Precisely you don't know what is going to 
happen. I want to make clear, you know that they have 
hurricanes in Florida, you know that they have earthquakes in 
California. I bet you didn't know that we would have an 
earthquake here in the Nation's Capital. So I am talking about 
what you don't know and what you will be held responsible for 
notwithstanding the fact that you don't know. Is your agency 
structured so it can handle what you don't know?
    Mr. Fugate. That is where we are going. What we changed in 
the question was, traditionally what was FEMA capable of 
responding to? As you point out, that is a fool's errand, 
because if you are only prepared to handle a certain level of 
disaster and something happens you don't expect, you fail.
    So we went back and started looking at where was the risk 
in population, and not looking at what FEMA was capable of 
responding to, but what is the worst case that could happen. 
And we started asking questions that weren't easy to answer 
because the questions started generating response levels 
greater than the Federal Government. It forced us to really 
take a different look at how we fund--as you point out, the 
Homeland Security dollars--each jurisdiction, many of which 
were not likely to have a terrorist attack, but they are also a 
resource to the rest of the Nation when a big disaster happens. 
We saw this in Sandy where many responders from outside the 
area were able to respond because of the capabilities built 
with those Homeland Security dollars.
    So we are following what you are pointing out. We cannot 
prepare for what we expect or what we are prepared to handle. 
We have to prepare for what could happen. This is driving our 
strategic planning, this is driving how we are looking at how 
we are structured, not to what we can respond to, but what 
could happen. And that is, again, driving a lot of our 
decisions.
    We don't think the resources are necessarily the first 
answer, but it does require resources and sustained funding. It 
requires a budget. As you well know, operating under continuing 
resolutions is not how you prepare for catastrophic disasters. 
And in my term here, I have been under more continuing 
resolutions than I have under budgets.
    So I would love to have staff, if necessary, if you are 
available to sit down and talk about this. But we are 
definitely trying to look at the future, looking at what could 
happen, looking at how you build that response.
    Can I tell you it is built today? No, it is a work in 
progress. But I think we have moved past the barriers of only 
planning for what we know or what we are prepared to respond to 
and asking a much harder question: How bad could it be? And the 
President said this in an early meeting that I was attending, 
he said we can't protect everything, so we need to know what we 
can live without and what we can't. And if we can't live 
without as a Nation, that is where we need to really focus on.
    And so when we start looking at disasters and where they 
could happen and where they are expected versus what could 
happen based upon the modeling, the data from various 
organizations and populations at risk, we are looking at how do 
you build. And it is not just FEMA, we call it whole Government 
because we have come back to it is going to take local, State, 
mutual aid, it is going to take the Federal Government, our 
Department of Defense, it is going to take our private sector, 
and it is going to take a lot of the public to respond to that 
scale of a disaster.
    Ms. Norton. I would just ask that at an appropriate time it 
would be interesting to have a briefing as to how they are 
looking at the unknown that we now know to expect but don't 
know what it is that could bring calamity to us, as Congress 
would be asked to do what it doesn't have the funds to do and 
never expected would happen. If they could pinpoint how they go 
about that, I think it would certainly educate me and I think 
it would help the subcommittee and the full committee.
    Mr. Fugate. Mr. Chairman and for the Delegate, I think we 
have some examples we have been doing; we call this 
catastrophic planning, but some of the work we have done in the 
Cascadia fault zone and subduction zone off the coast of the 
northwest U.S., the New Madrid earthquake risk which is, again, 
a very large risk over large areas. And I think we can show 
where we are going and tell you what we think is the path to 
get us there, and then that will give you an opportunity to 
look at are there additional tools that you can give us.
    The last thing I would like to end with this is the 
Stafford Act was oftentimes a constraint seen as what FEMA was 
capable of doing. In the past year since I have been at FEMA, 
we have responded to Haiti, which is traditionally the role of 
USAID, but we were asked to support USAID and we did it. Last 
year we were asked to support unaccompanied children and the 
mass care issues of children in detention facilities, so we 
supported that. We were asked to support the Ebola response.
    Many of these things may not be in the papers, but they are 
capabilities you built, and you gave us the tools under the 
Homeland Security Act as amended. The Stafford Act, however, is 
limited to oftentimes only those natural hazards with limited 
flexibility.
    I think the Delegate brings up an important point. When you 
look at growing hazards such as cyber and others, what is the 
role of the Disaster Relief Fund in the consequence world? And 
if it is not in rebuilding in the emergency response costs and 
the ability to use the emergency declaration to mobilize and 
bring resources to bear, is it worthwhile looking at such 
things which--it is kind of a question--what is the role in a 
pandemic? It is not specifically excluded in the emergency 
declarations, but it is not mentioned.
    Cyber. Again, we don't look to have the role in the 
prevention or the law enforcement or even the response to the 
technical aspects of it, but States and locals will be dealing 
with consequences of it, many of which will follow similar 
patterns of other types of hazards. We saw this in Deepwater 
Horizon. Again, the Coast Guard is the lead agency for that, 
had many of the tools to deal with the response. But much of 
the coordination with local and State governments had to be 
built.
    And, again, FEMA is not looking to grow our role, but we 
think a better understanding of what the intent of Congress is, 
as you pointed out in the Homeland Security Act as amended, as 
the principal adviser to the President and to Congress on 
emergency management, but also our role and capabilities we 
have built for a lot of disasters, not limiting the 
applicability to other lead Federal agencies to support them or 
Governors when they fall outside traditional known disasters.
    Mr. Barletta. The Chair would recognize Mr. Graves for 5 
minutes.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman.
    Mr. Fugate, I wanted to go back on a few things that 
followed up on Congressman Curbelo's questioning, one of which 
is the National Flood Insurance Program. And certainly we can 
go back over Biggert-Waters at length.
    In south Louisiana, we have lost about 1,900 square miles 
of wetlands, I would say about 90 percent of the coastal 
wetlands lost in the United States, in the continental U.S. And 
what that does is it makes the Gulf of Mexico that much closer 
to our costal communities, thereby increasing their 
vulnerability.
    Under Biggert-Waters, before the changes that were enacted, 
the actuarial rates in some cases increased rates 20, 30, 40 
times what they were previously. This increase in 
vulnerability, whether it is real or not, is not the fault of 
these people. It is largely, based on studies, actually the 
result of Federal actions tied to the Mississippi River and 
Tributaries Project dating back to 1928.
    When you add on top of that some of the V Zone restrictions 
that were put in place, when you add on top of that some of the 
challenges that I noted earlier with regard to these Corps of 
Engineers projects that were noted to have a positive cost-to-
benefit ratio, yet stuck in project development processes for 
decades literally, we are missing opportunities to save 
taxpayer dollars by being proactive rather than being reactive, 
which is always more expensive, as the two studies we noted 
before show.
    There are opportunities here to make communities more 
resilient and to save taxpayer dollars. And I understand that 
not all of those are within the purview of your agency. But I 
just want to urge, and, again, going back to the comments of 
Ms. Holmes Norton, the better coordination between FEMA and the 
Corps of Engineers, there are opportunities here, there are 
projects here where these communities can be made more 
resilient, to where hurricanes and other disasters are rainy 
days as opposed to catastrophic losses, as we have seen in 
recent years.
    I wanted to perhaps correct the record on a comment you 
made or just provide a little bit more context on the National 
Flood Insurance Program. You made a comment that the program 
was $20 billion in debt. And I know that you have seen the 
studies. When you go back and look at it, you can justify that 
the program is in the black anywhere from $9 billion to $16 
billion. And you and I may not agree on that, but I think it is 
noteworthy. You also have seen the GAO study indicating that up 
to 66 percent of the premiums that have been retained by the 
Write-Your-Owns in the form of commissions not going into the 
fund.
    And, lastly, as I recall from the 2005 storms, the NFIP 
program borrowed $17 billion, which obviously is the majority 
of the debt that you referenced. But you have General Strock, 
who was the Corps of Engineers, who indicated that Katrina was 
an engineering failure of the Corps of Engineers, yet the NFIP 
ratepayers are the ones left holding the bag in this case. And 
so I just wanted to make sure that that was also included in 
the record to not distort the solvency of the NFIP program.
    I also wanted to be clear that Louisiana is perhaps 
somewhat of an anomaly and that the vulnerability is not as a 
result of decisions communities have made in most cases, it is 
a result of the changing landscape, largely a result of Federal 
actions that have had adverse consequences on these communities 
and the environment in south Louisiana.
    Mr. Fugate. Well, my sister lives in Marrero and she is on 
the wrong side of the Mississippi River levee system. So when 
the storms come, she is going to get flooded.
    I also know that we did a lot of good work, Dave Paulison 
overseeing this in his term, of building back better. 
Plaquemines Parish made some very key decisions. When the 
latest storm hit, I believe it was Isaac, their EOC was 
elevated. They didn't have to shut down. I was with Governor 
Jindal driving through that hurricane getting down there. And 
they were able to maintain a full response. They evacuated. 
Where they had put in their levees--and much of this was their 
decisions--they were able to protect many parts of their 
community. They were also making decisions about what is not 
going to be defensible anymore and about buying out and 
relocating communities.
    So we know this area. We have worked in it. But the numbers 
there and how you get to the numbers, the fact is the National 
Flood Insurance Program still owes and has borrowed from the 
Treasury to pay out--and, again, two of the very large payouts 
was Katrina but also Sandy--and it is not able to pay that debt 
down. It was paying it down slowly after Katrina.
    And, again, this is a sense of Congress, is do we want to 
have an actuarially sound program? I think the answer is, for 
parts yes, but other parts we actually would bring people out 
of their homes, which I don't think was the intent, and I think 
that is why Congress came back and made that change in Biggert-
Waters.
    But we have got to make sure that we set an appropriate 
level that we can't run it as an insurance company and say it 
is going to be actuarially sound. We are going to have to 
understand we are going to underwrite risk because there is no 
other way to keep people in their homes.
    Mr. Graves of Louisiana. And, Administrator, in closing, I 
just want to say that I agree that taxpayers shouldn't be 
footing the bill in this case. However, we at the same time 
shouldn't call actuarial a program that is being run incredibly 
inefficiently, and the $17 billion Katrina expense that the 
Corps of Engineers admitted was actually their liability or 
their fault. Thank you.
    Mr. Barletta. Thank you, Mr. Fugate, for your testimony 
today. Your comments have been helpful to today's discussion. 
And I look forward to working with you on our legislation. Your 
input and support is vital to getting it right and getting it 
signed into law. So thank you.
    We will now call our second panel. And I remind you of the 
subcommittee's request to limit your oral testimony to 5 
minutes. And we will let our panel get in place.
    Mr. McCarthy, you may proceed.

    TESTIMONY OF FRANCIS X. MCCARTHY, ANALYST IN EMERGENCY 
 MANAGEMENT POLICY, GOVERNMENT FINANCE DIVISION, CONGRESSIONAL 
     RESEARCH SERVICE; HON. ROBERT DAVID PAULISON, FORMER 
ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY; BRYAN KOON, 
 DIRECTOR, FLORIDA DIVISION OF EMERGENCY MANAGEMENT, ON BEHALF 
  OF THE NATIONAL EMERGENCY MANAGEMENT ASSOCIATION; AND BRIAN 
 FENNESSY, ASSISTANT FIRE CHIEF FOR EMERGENCY OPERATIONS, SAN 
 DIEGO FIRE-RESCUE DEPARTMENT, ON BEHALF OF THE INTERNATIONAL 
                   ASSOCIATION OF FIRE CHIEFS

    Mr. McCarthy. Thank you, Mr. Chairman. I am privileged to 
appear before you today----
    Mr. Barletta. Is your microphone on?
    [Audio malfunction in hearing room.]
    Mr. McCarthy [continuing]. To discuss the increasing number 
of disaster declarations and their relationship to increasing 
disaster costs.
    Today I will first discuss how we count disasters; second, 
offer some explanations for the increase in major disaster 
declarations; third, identify the primary source of increased 
disaster costs; and fourth, touch on some ways to begin to 
control those costs--most prominently through mitigation.
    How do we count disasters? Any discussion of increased 
numbers of declarations should define the terms carefully: 
major disasters, emergencies and fire management assistance 
grants--FMAGs--are all listed on fema.gov's declarations page 
and they are all funded out of the Disaster Relief Fund. But 
they are distinct, and the overwhelming amount of spending 
comes from major disaster declarations. Occasionally, people 
tend to conflate all of these together and say we have many 
more declarations. But really that is imprecise and it is not 
very helpful.
    There has been a steady increase in major disaster 
declarations during our lifetimes. It has increased fourfold 
from the 1960s to now. But with that increase, though, I would 
also acknowledge that last year was the lowest number since 
2001. I mention that to reinforce one fact that often gets lost 
when we start talking or at least discussing theories about why 
a disaster declaration occurs, and that is that they begin with 
actual physical events.
    How do we explain an increased number of disaster 
declarations? In addition to an increased number of extreme 
weather events over the last 50 years, for example, during the 
last seven decades the population of the Nation has nearly 
doubled, and it could be argued that the population density has 
increased not just in already existing communities, but it has 
spurred a lot of increased development in areas that are very 
vulnerable to natural disasters.
    We have also observed recent commentary regarding the 
marginal major disasters, to think of these events as if they 
are actually within any State's capacity to respond. But the 
central point of the declaration process, particularly the use 
of the oft-criticized per capita amount, is that all States are 
not equal and that larger States do have more resources and 
should be able to offer more aid on their own.
    What is the primary source of increased disaster costs? 
More declarations result in more costs, but it is important to 
understand that the greatest amount of disaster spending is 
attributable to the large major disasters, not to these 
marginal events. As an example, we reviewed data from 1989 to 
2014 of declarations and obligations. If we eliminated half of 
the disasters over those years we would save approximately 3 
percent in disaster costs. Not only do the top half of 
disasters account for 97 percent of the spending, but the top 
quarter of disaster costs account for 93 percent.
    So how can we begin to control costs? There are a number of 
options to reduce Federal disaster spending, including cost-
share adjustments, changes in rules, that might have an effect 
on shifting a greater share of disaster-related costs not only 
to States and communities, but also to families and 
individuals. While some of these ideas may be worthy of 
consideration, it remains to be seen if such a shift would 
severely disrupt a State's ability to adequately respond to a 
disaster.
    An alternative to those options is to continue to emphasize 
mitigation, that is, taking steps prior to a disaster to lessen 
the impact of those events and save lives and protect 
resources. Mr. Chairman, your statement last spring on the 
dissonance in current mitigation policy by the administration 
was apt. At a time when a bipartisan consensus seemed to be 
developed on the efficacy of mitigation and how it could work, 
the last budget zeroed out the funding for the Pre-Disaster 
Mitigation Program at FEMA. And later in the year, the 
administration announced a nationwide resilience competition 
with nearly a billion dollars that remained from the CD 
appropriations for Sandy.
    It is noteworthy that the Disaster Mitigation Act of 2000, 
fully 15 years ago now, was premised on the idea of doing 
things before disasters. And it looks now as if we have circled 
back, so that all mitigation dollars are now following 
disasters and not giving States and communities a chance to do 
the work before they occur.
    The new resilience program is based at HUD, but is directed 
toward States that have experienced disasters. It is not clear 
how it links to other mitigation programs. It does not appear 
to have the same cost-benefit requirements as the FEMA 
mitigation program, nor is there any reported collaboration 
among them.
    Now, mitigation is not a panacea for all the problems 
created by natural disasters, but it does offer the possibility 
of future long-term savings in Federal expenditures, safer 
States and communities, and a process that can involve a 
partnership at all levels of Government and also with the 
nonprofit sector and with the private sector. Fewer disaster 
declarations would result in less spending, but avoiding or 
continuing to lessen the impact of future catastrophic disaster 
events may arguably hold a lot more promise in long-term 
savings and protecting our citizens.
    Thanks for the opportunity to appear before you today, and 
I would be happy to respond to any of your questions.
    Mr. Barletta. Thank you for your testimony.
    And we apologize for the sound system. That was painful for 
us as well.
    Administrator Paulison, you may proceed, and hopefully your 
microphone will work properly.
    [Audio malfunction in hearing room.]
    Mr. Barletta. Unfortunately, we are going to have to pass 
that one over there. Thank you.
    Mr. Paulison. Now we will see if we can get this one to 
work.
    Anyway, the leadership this subcommittee and Chairman 
Shuster have shown on these tough issues is critical. Your 
mission is clear: We must find a way to bend the cost curve of 
disasters for American taxpayers. In pursuit of this mission, I 
believe we can save additional lives and do a much better job 
of protecting property.
    My name is David Paulison. I am the senior partner of 
Global Emergency Solutions. I was proud to have spent 7 years 
in the Federal service of our Nation, and I served as the FEMA 
Administrator from 2005 to 2009. I began my 30-year career as a 
rescue firefighter and rose through the ranks to become the 
chief of the Miami-Dade Fire Department. As a result, I have 
had a front-row seat as to how we as a Nation prepare for and 
deal with disasters.
    While I have seen many tremendous public servants at work, 
I have also witnessed unfortunate policy errors and wasted 
taxpayer dollars. In most cases, this waste was a result of 
insufficient investment in mitigation before the disaster hit. 
Not enough resources are being allocated in predisaster 
mitigation.
    I believe this new Congress has a golden opportunity to 
advance a bipartisan natural disaster strategy that would 
better protect the American people, property, and save taxpayer 
dollars. With the Senate and the House of Representatives 
working together across party lines, now is the time to address 
the failed status quo of waiting for storms to hit and then 
passing massive supplemental appropriation bills.
    Director Fugate has done a tremendous job of fostering 
resiliency and a community-oriented approach to emergency 
management since he took the reins of FEMA. However, I am sure 
even Director Fugate would admit there is still much work to be 
done to build a more resilient country by shifting more money 
to predisaster Federal incentive programs. Hopefully, 
understanding the realities of the exploding costs can serve as 
a motivator.
    Mr. Chairman, any attempt to change the status quo must 
ultimately begin with an understanding of the nature of the 
problem. This is why I believe your subcommittee's work can 
play a major role. First, let me describe the nature of the 
problem we face. And I brought just two slides along.
    According to FEMA, Federal major disaster declarations have 
jumped from a yearly average of 23 under President Reagan to an 
average of 65 under President Obama. The trend is undeniable 
but also nonpartisan, as the average number of disaster 
declarations per year has risen under President George H.W. 
Bush, President Clinton, and President George W. Bush.
    Mr. Paulison. The second slide is a representation of the 
average overall and insured losses over the last three decades. 
As you can see, the spike in overall costs is dramatic over the 
last two decades, increasing from an average of $33 billion per 
year from 1995 to 2004 to doubling to $65 billion a year in the 
next decade.
    [The slides referenced by Mr. Paulison are included in his 
written statement on page 80.]
    The Federal Government and insurers have borne the 
overwhelming majority of these losses. Since 2011, $137 billion 
has been spent, really $400 a household annually, with over $60 
billion spent on Superstorm Sandy alone. Sadly, the Federal 
Government invested only $1 in preventive measures for every $6 
spent on recovery. This low predisaster investment is an 
important factor when we consider that FEMA studies have 
shown--and you heard this--that for every dollar invested in 
mitigation, it saves the taxpayers $4 in recovery.
    Ironically, the losses from these types of disasters are 
the most preventable with proper predisaster mitigation and 
resiliency tools like modern building codes. Studies have shown 
that building codes are the most effective mitigation measure 
we have. Yet only 11 States across this country have adequate 
building codes and enforcement mechanisms in place. Most of the 
States without proper building codes are directly in harm's way 
when it comes to hurricanes and other natural disasters.
    It seems to me that the critical question is, what can the 
Congress do to bend the runaway cost curve? As a former 
firefighter, I am always reminded of the advice given by 
America's most famous firefighter, Ben Franklin: An ounce of 
preservation is worth a pound of cure. In my view, providing 
incentives for States and localities to adopt and enforce 
modern building codes is the most cost-effective mitigation 
tool we have.
    The BuildStrong Coalition urges the enactment of the Safe 
Building Code Incentive Act, a bill to provide an additional 4-
percent incentive in post-disaster grants to States that adopt 
and enforce strong building codes. Any future savings that 
result from the elimination of wasteful post-disaster spending 
should be reinvested in predisaster incentives like the Safe 
Building Code Incentive Act to facilitate modern building codes 
in States and communities across this country.
    Chairman Barletta, I applaud you, I really applaud you for 
the announcement of a congressional roundtable to begin the 
dialogue on how to identify and quantify factors driving 
disaster costs and how to use that information to ultimately 
study and find solutions. It is my recommendation that the new 
Congress pass legislation in short order to commission a blue 
ribbon panel to explore why disaster declarations are at an 
all-time high and what is really behind the dramatic increase 
in disaster spending.
    Some questions the panel could explore include: Are the 
increases in spending related to population increases, like you 
heard earlier? Are they related to changes in spending, poor 
construction of homes, or mistakes in Federal policy? What 
changes in policy could be made to enhance building resiliency 
and reduce disaster costs?
    The panel could also make recommendations concerning the 
proper role of Federal, State and local governments in solving 
this problem. Specific attention should be given to the roles 
of FEMA, HUD, DOT to minimize the duplication of effort and 
waste that we often see now. I believe Congress should 
authorize this blue ribbon panel and use the findings to put in 
place a comprehensive national disaster strategy that aims to 
save lives and ultimately taxpayer dollars.
    I want to thank you again for allowing me to testify before 
the subcommittee today, and I will be looking forward to your 
questions.
    Mr. Barletta. Thank you for your testimony, Mr. Paulison.
    Mr. Koon, you may proceed.
    Mr. Koon. Thank you, Chairman Barletta, Ranking Member 
Carson, and members of the subcommittee, for holding this 
hearing today.
    The statement for the record we submitted goes into 
specific details on many issues regarding how to lessen the 
impacts and costs of disasters. But for now I will cover the 
current state of disasters, efforts we are working on with 
FEMA, and ongoing concerns with the systems of management costs 
and deobligations.
    As you have already heard, the number and nature of 
presidentially declared disasters has varied widely over time. 
Of course, examining Presidential declarations provides only a 
glimpse of the true disaster response activity in this country. 
The majority of events are handled at the State or local level 
and do not warrant Federal assistance. In fiscal year 2013, 
there were 205 gubernatorial declarations and over 18,000 
events requiring State assets. In addition to that, local and 
tribal governments responded to nearly 31,000 additional events 
that year. Without a strong emergency management system at the 
State, local and tribal levels, many of the nearly 50,000 State 
and local responses would falter or require Federal support.
    That Federal support comes in the form of public 
assistance, which amounts to half of the total funds allocated 
to the Disaster Relief Fund. In order to ensure the most 
effective use of those funds and in response to numerous 
Government audits, last year FEMA initiated an internal study 
of its PA program. In the coming weeks, the agency will share 
data from the study with the States, with the desired goal of 
an agreed-upon, redesigned PA program that meets the needs of 
all stakeholders.
    A redesigned PA program which streamlines efforts will also 
assist in reducing and appropriately allocating those 
administrative costs identified by GAO in a report last month. 
The report highlights the continuing increase of FEMA's 
administrative costs as a percentage of the DRF, which averaged 
13 percent over the last 10 fiscal years, while less than 2 
percent was apportioned for grantees and subgrantees. This has 
been an area of great frustration and concern to the States and 
certainly needs further examination.
    We hope that an improved PA process will also reduce the 
opportunity for future audits and deobligations by simplifying 
and standardizing efforts across the country and reducing the 
time necessary to close disasters. The current rate of 
deobligations causes significant economic hardship to the 
States and communities that have expended those funds long ago 
and requires significant staff time that would be better spent 
preparing for future disasters.
    Reducing administrative expenditures from the DRF would 
also allow the Nation to explore alternative uses for these 
funds, such as increasing resiliency by identifying, 
incentivizing, and funding additional mitigation opportunities 
across the country. These resiliency efforts will ultimately 
reduce our disaster costs in the long term.
    NEMA intends to continue conversations on all of these 
issues at our midyear forum in March, utilizing the combined 
efforts of our Legislative and Response and Recovery Committees 
to explore alternatives and make recommendations to you.
    The subcommittee and Congress as a whole have gone to great 
lengths to continually try and improve disaster response 
processes. Efforts such as the Sandy Recovery Improvement Act 
and H.R. 3300, which supported programs like EMAC, USAR teams, 
and IPAWS, provide opportunities to drive down the cost of 
disasters. But without a comprehensive look at some of our 
administrative issues as well, we will continue to falter in 
our mission.
    Only through an effective response and subsequent recovery 
can we work toward building more resilient communities, 
reducing the overall cost of disasters to States and the 
Federal Government, and ultimately save more lives and property 
from damage.
    I look forward to our continued partnership in these 
efforts and welcome any questions you have for me.
    Mr. Barletta. Thank you for your testimony, Mr. Koon.
    Mr. Fennessy, you may proceed.
    Mr. Fennessy. Thank you. Good morning, Chairman Barletta, 
Ranking Member Carson, and members of the subcommittee.
    I am Brian Fennessy, assistant fire chief of emergency 
operations of the San Diego Fire-Rescue Department. Today, I am 
testifying on behalf of the International Association of Fire 
Chiefs, where I serve on their Wildland Fire Policy Committee. 
Thank you for the opportunity to discuss FEMA's role in helping 
communities respond to and recover from wildland fires.
    In 2013, wildland fires impacted every State in the Nation. 
There were more than 47,500 wildland fires in the United 
States. They burned roughly 4.3 million acres. These fires cost 
the Federal Government over $1.7 billion to extinguish.
    Local fire departments respond to most wildland fire 
incident. For fires on Federal lands, they cooperate with the 
U.S. Department of Interior and the U.S. Department of 
Agriculture's U.S. Forest Service. Nearly 97 percent of all 
wildland fires are extinguished during initial attack, a 
majority of them by local fire departments. The U.S. Forest 
Service estimates that local fire departments provide more than 
$36 billion per year in wildland fire suppression assistance.
    The city and county of San Diego are no strangers to the 
threat of wildland fire. In 2003, 2007, and again in 2014, San 
Diego experienced fire sieges that resulted in hundreds of 
thousands of acres being burned, thousands of structures being 
destroyed, and tens of millions of dollars in damage.
    The primary Federal agencies for wildland fire response are 
the Department of Interior and the U.S. Forest Service, which 
are responsible for fires on Federal lands. However, FEMA plays 
an important role in helping State and local agencies prepare, 
respond to, and recover from wildland fires on non-Federal 
land. Under FEMA's Fire Management Assistance Grant, FMAG, FEMA 
provides assistance in the form of 75 percent matching funds to 
help offset the cost to communities for the control of any fire 
on public or private forest land or grassland that threatens 
such destruction as would constitute a major disaster.
    FEMA also provides hazard mitigation assistance through the 
Hazard Mitigation Grant Program. This funding can help States 
and local communities protect the public and property in 
advance of wildland fires occurring. Today, FEMA plays an 
important role in helping States and local communities address 
the threat of wildland fires. It does not duplicate nor replace 
wildland fire suppressions of the Department of Interior or 
U.S. Forest Service. However, we would like to recommend some 
policy changes to help FEMA play an even more beneficial role 
in the fight against wildland fires.
    Number one, in a dynamic wildland fire environment, FEMA 
must use more flexibility when evaluating FMAG applications. 
FMAG applications must be submitted while a wildland fire is 
burning uncontrolled in a rapidly changing environment.
    Last May, the city of San Diego submitted an FMAG 
application 6 hours into an uncontrolled wildland fire incident 
that met FMAG program criteria. The application was rejected 
due to it being submitted at a point when the fire's growth had 
slowed and was perceived by FEMA as less of a threat of a major 
disaster. Had it been received 2 hours sooner, approval was 
likely.
    In the future, FEMA must take into consideration special 
circumstances that could compromise the timely submittal of 
FMAG applications when a threat to the community continues to 
exist. To do otherwise may unfairly burden local and State 
taxpayers.
    Number two, Congress should allow FEMA funding to be used 
to mitigate the risks of post-wildland fire flooding. Long 
after a wildland fire is extinguished, the destruction of 
vegetation and the severity of the burned ground leaves 
communities vulnerable to the threat of mudslides and flash 
flooding. The IAFC has supported previous legislation that 
would allow States to receive post-fire mitigation assistance 
along with FMAG grants.
    Three, FEMA should fully reimburse fire departments for 
interstate mutual aid deployments. When fire departments are 
deployed on intrastate or interstate mutual aid missions to 
wildland fires, they expect to be made whole. Unfortunately, 
this currently is not the case. For example, when a local fire 
department apparatus is committed to an emergency incident it 
is no longer available to that department. FEMA will only 
reimburse the department for 16 hours of that 24-hour day for 
this equipment after the first 48 hours. If fire departments 
are not fully reimbursed for their expenses, local government 
policymakers may not be as willing to send them to assist other 
communities in future situations.
    Number four, Congress should stabilize funding for wildland 
fire prevention and suppression. In recent years, Federal fire 
agencies have seen wildland fire suppression costs exceed their 
budgets. The Department of Interior and U.S. Forest Service 
have been forced to transfer funding from other accounts to 
continue fighting wildland fires. This fire borrowing has 
depleted accounts aimed at activities like reducing hazardous 
fuels and prevent wildfires.
    The IAFC supports Congress' efforts to address the wildland 
fire problem through the creation of the FLAME Fund and the 
National Cohesive Wildland Fire Management Strategy. We also 
have been supportive of legislation like H.R. 167, proposed by 
Representatives Simpson and Schrader, which would allocate the 
cost of suppressing the largest 1 percent of the Nation's 
wildland fires to the Disaster Relief Fund. Efforts to 
adequately cover the cost of Federal wildland suppression will 
allow the Department of Interior and U.S. Forest Service to 
also fund other programs designed to prevent future wildland 
fires.
    In closing, I thank the committee for the opportunity to 
address the issue of FEMA's support of local and State 
governments and wildland fire response and recovery. The threat 
of wildland fire continues to grow more severe. FEMA plays an 
important role in helping communities prepare, respond to, and 
recover from that threat.
    The IAFC looks forward to working with the committee to 
address these issues. I look forward to answering any questions 
that you may have.
    Mr. Barletta. Thank you for your testimony, Chief Fennessy.
    We will now begin the first round of questions limited to 5 
minutes for each Member. If there are any additional questions 
following the first round, we will have additional rounds of 
questions as needed.
    If we can pass the microphone down to Mr. McCarthy.
    Mr. McCarthy, you have analyzed the history of our Nation's 
disaster assistance authorities and the creation of FEMA. Can 
you explain some of the basic principles that are fundamental 
to FEMA's assistance programs and the Nation's approach to 
disaster recovery?
    Mr. McCarthy. Yes, Mr. Chairman. Fundamentally it begins as 
a partnership between the Federal Government and the State 
governments. And I think it is written, the Stafford Act is 
written in a way that is of interest because it is extremely 
flexible. I know Mr. Fugate was talking about some of the ways 
it works, some of the ways it doesn't work. What always struck 
me is that I have occasionally heard it referred to as the kind 
of act you could drive a truck through. And then I also heard 
it referred to as a straightjacket. Perhaps both people are 
right. But I think it is a matter of interpretation.
    But essentially FEMA is looking at the States as their 
partners. And I think that in that way it works fairly 
effectively. And you have State agencies, by the way, the State 
emergency management agencies, that have grown in 
sophistication and ability through the years and are really 
able to work well with FEMA and make it work.
    But one of the things that I think that is important is 
knowing that the States and locals can do well in working 
together to repair infrastructure, repair buildings, repair 
water services, and things like that. But one point I want to 
stress that I think is difficult is that when we say good 
things about what a good job FEMA is doing or how great the 
disaster piece is working, there is one problem on that, and 
that is creating expectations for families and individuals. The 
Stafford Act doesn't come close to bringing people back to 
where they were before a disaster. In fact, the total amount 
that can be spent currently by FEMA on any family is $32,400.
    Now, that can't replace a flood insurance policy. It can't 
replace a homeowners policy. And I think at times perhaps--and 
I don't think anyone is directly responsible for that--but 
there is kind of an image created that, ``don't worry, the FEMA 
dollars are coming and we will all be taken care of.'' Well, to 
an extent, I think for State and local governments, there is 
some truth in that. But certainly for families and individuals, 
nothing replaces solid insurance and a real kind of culture of 
preparedness.
    But overall I would say, though, that in what I have 
observed--and I did start at FEMA before it was FEMA, I 
confess, in 1979--is you have seen a really growing and 
maturing program that does address a lot of the toughest 
problems that communities face. I think it does it faster. It 
certainly responds much better than it ever did before.
    But I think we are left with the question then: What is 
next? And we can get better and better at responding. We can be 
faster at responding. But, again, as one who has also written 
on the Pre-Disaster Mitigation Program, I think absent that, 
you are going to be repeating the same work over and over again 
in the same places until you do try to reduce the overall risk.
    Mr. Barletta. As you testified, the cost of natural 
disasters are driven by just a few events. If we are to look 
for solutions to reduce the costs, we are going to have to 
understand what factors are resulting in the few events being 
so expensive. Do you have a sense of what some of those factors 
may be?
    Mr. McCarthy. Actually, as Mr. Fugate mentioned and in my 
testimony, I think the biggest factor is we have had a series 
of events now where it has become--and I think this is partly 
what Ms. Norton was talking about--at FEMA we always used to 
think about what is unthinkable. And back in the 1990s, we 
think, well, what is unthinkable is a hurricane going directly 
into New Orleans, or what is unthinkable is really strong 
hurricanes hitting the New York City and New Jersey areas. We 
have started to have those events occur. The density of the 
population and the actual value of the resources being hit has 
driven these costs this high.
    Some of the things we can do is to begin to take steps that 
begin to protect these structures, to do elevation, to move 
some areas out of where rivers want to go or where coastal 
surges want to go.
    But overall I have to say, some of the biggest disasters we 
have had, it would be hard to take a big chunk out of that 
because they went where the people were and where the valuable 
real estate was, and that ends up costing us a great deal. But 
there is still much we can do.
    Mr. Barletta. Thank you.
    The Chair now recognizes Ranking Member Carson for 5 
minutes.
    Mr. Carson. Thank you, Chairman.
    Mr. Koon, I understand the States' concerns about liability 
for failing to provide adequate sheltering during disasters. 
But at the very same time, sir, how do you suggest that we 
provide the same kind of access to shelters for those with 
functional need support services?
    Mr. Koon. Thank you, Representative Carson, for the 
question.
    Dealing with the vulnerable population in shelters is an 
issue that we in Florida and all other States have been working 
on for a number of years in close coordination with FEMA. And 
as Administrator Fugate, it is an extreme priority for us.
    The issue comes down to how is it do we achieve the vision 
that Administrator Fugate laid out, given the fiscal 
constraints and the resource constraints that we have at the 
State and local level, to ensure that we are able to provide 
that ability for anyone to seek shelter in any location during 
those times when we will be severely resource constrained.
    We continue to make good progress on that. In Florida and 
in other places across the country, that is coming in the form 
of increased cooperation between municipalities, between 
counties, and within the State itself, helping us to make sure 
that we are able to apply those resources that may be in 
another jurisdiction in an area that needs them in that moment. 
We will never be able to afford to have all of the potential 
durable medical equipment at every shelter location all the 
time, but we do have the ability to transport those in short 
order. The same thing for the human capital necessary in those 
kinds of situations.
    In one hurricane, in 2005, the State of Florida had 
approximately 380 shelters open. We did not have the resources 
able to get, for example, 380 sign language interpreters to 
those shelters. But if we have the network in place, if we have 
the partnership and cooperation in place ahead of time, as 
those needs arise we can deploy them quickly. So that is the 
tack we are taking now, is to make sure that we can get the 
resources available to be shared appropriately. And we want to 
make sure that we have got the conversation ahead of time with 
FEMA, with the Department of Justice, with the disabled 
community to make sure that that, in fact, is going to meet the 
need and it is an appropriate solution to the situation.
    Mr. Carson. Thank you.
    And to that point, Mr. McCarthy, you mentioned the 
difficulty of measuring State readiness and their capabilities 
when reviewing disaster declaration applications. What options 
have been considered? And do you have any recommendations for 
determining readiness and capabilities, for that matter?
    Mr. McCarthy. It is something that FEMA has worked on a few 
times doing capability assessment reports, trying to look at 
what the States themselves think they are strongest at, what 
they could probably take on themselves. There are a number of 
pieces that have to be looked at, and I would go to the GAO 
report that mentions there are certainly a lot of other ways of 
measuring a State's ability beyond the per capita amount. That 
can be rainy day funds. And also the State's capacity. I think 
it has been an interesting conversation here today about what 
discourages States from building that capacity and what 
encourages it.
    Now, I think a lot of States are simply responsible and 
know they have to do, as Bryan Koon is pointing out, they are 
the ones that have to respond first and do a lot of response 
work absent Federal help. But still it is interesting to think 
that there are some States that do a wonderful job because they 
get hit frequently and know they better be good at it. But 
there are other States that, because this is a very episodic 
business, they might not get hit with something substantial for 
years. You might find that they are no longer budgeting towards 
it, and then it makes it all the more difficult when they are 
hit.
    I am not being really responsive to you except to say, I 
think it is something we really would have to study and think 
about a checklist that maybe FEMA could go down looking at 
beyond per capita. And I think GAO has made a couple of 
suggestions on that that would likely be a better measurement 
of State resources.
    Mr. Carson. Yes, sir.
    Chief Paulison, some have indicated that too many small 
disasters tie up FEMA's resources and inhibit FEMA's ability to 
respond to larger disasters. As a former FEMA Administrator, 
sir, what are your thoughts on this position?
    Mr. Paulison. Regardless of the size of the disaster, where 
I see the same damage in every event, whether it is a tornado 
or hurricane or superstorm, we are seeing the same type of 
damage. I firmly believe that if we look at premitigation 
issues, particularly with our building codes and how we are 
putting our houses together, we can reduce our costs on the 
other end significantly. Fifteen percent of the population of 
this country lives on 3 percent of the land, and we are talking 
about $10 trillion--$10 trillion--in property that we continue 
to rebuild back the same way we did.
    Hurricane Andrew, we lost a lot of homes, almost 90,000 
homes severely damaged in Hurricane Andrew. And we looked very 
carefully at what damage was caused, what happened, what caused 
them to fail, what caused the roofs to fail, what caused the 
windows to blow out, and we changed our building codes to deal 
with all of those issues. And it was tough. It was not easy to 
do. We had homebuilders fighting us. But we had a lot of 
political will to make those changes and we did that.
    So we looked out across the country, like I said earlier, 
it was only 11 States that have building codes. So regardless 
of whether it is a small disaster that even the State handles 
by itself or it is a big catastrophic event like a Katrina, it 
is the same type of damage. And, yeah, it may be bigger and 
cost more money, but really the damage to each individual is 
identical.
    So I think we need to step back and look very clearly at 
what we are doing to our building codes and how we are building 
these things back again. And I think that is what is going to 
reduce costs.
    Mr. Carson. Mr. Chairman.
    Mr. Barletta. Thank you, Mr. Carson.
    The Chair recognizes Mr. Graves for 5 minutes.
    Mr. Graves of Louisiana. Thank you.
    I was reading some of the testimony earlier, and going back 
on the same things, questions to Administrator Fugate. Could 
you talk perhaps, Mr. Paulison, a little bit about some of your 
experiences with predisaster mitigation as opposed to post-
disaster response and cost savings associated with those 
activities?
    Mr. Paulison. I think a couple things. One, obviously being 
on the ground as a firefighter and fire chief, and I ran 
emergency management for Miami-Dade County, coming in as a fire 
administrator and then taking over FEMA in the middle of 
Katrina, I think we saw very clearly--very clearly--that we 
were not putting enough money in predisaster mitigation. Again, 
we are seeing the same things over and over again, and we 
rebuild back in the same place.
    Now, we are not going to evacuate Florida because it is in 
Hurricane Alley, that is not going to happen. So we know that 
that is not an option for us. So the other option has to be, 
OK, now that we are here and we know we are going to have 
hurricanes, what are we going to do about it? We can't just sit 
there and fold our hands or sit on our hands and wait for it to 
come.
    So I firmly believe, and that is why I appreciate so much 
what this committee is doing, to step back and look at what are 
we spending our money. Again, the roundtable issue you talked 
about, we don't even know how much we are spending on 
disasters. We have got HUD spending money, we have got FEMA 
spending money, we have got DOT spending money, we have got 
Agriculture spending money. We don't have a clue of what we are 
spending totally. But we do know that if we do things upfront 
to protect our businesses, protect our houses, and making sure 
our governments, our local governments, our State governments 
have good plans in place, it has got to reduce the cost 
significantly. So I think Mr. Fugate recognizes that also.
    Mr. Graves of Louisiana. Do you have any just quick 
observations over the perhaps different approach to response in 
Hurricane Sandy as compared to previous disasters?
    Mr. Paulison. I am sorry, could you repeat that?
    Mr. Graves of Louisiana. Sure. Do you have any reaction to 
the perhaps different approach to response in Hurricane Sandy 
as compared to previous disasters?
    Mr. Paulison. We made changes in FEMA after Katrina, 
waiting for the storm to make landfall. The way the Stafford 
Act is set up, and I----
    [Inaudible]
    If I am reaching, but we wait for the local community to 
become overwhelmed before the State steps in, we wait for the 
State to become overwhelmed before the Federal Government steps 
in. I call it a system of sequential failure. It doesn't work 
in a catastrophic event. We saw that very clearly.
    So we had changed our philosophy from a reactive to a 
proactive system. It worked extremely well in Gustav and Ike. 
Gustav went right into New Orleans, but not one fatality, 
because working with the locals and the State, we had evacuated 
the entire city.
    Mr. Graves of Louisiana. 2 million people.
    Mr. Paulison. Now, we had to spend a lot of money to do 
that, but the budget office and President Bush at the time 
agreed that we would do a predisaster declaration. 
Administrator Fugate, he has carried on that same philosophy. 
You saw a lot of resources on the ground in Hurricane Sandy 
prior to the storm making landfall. Even though it wasn't a 
huge hurricane, it wasn't like an Andrew or a Katrina, it still 
had a significant impact.
    So as far as changing the response, I think I would have 
done the same thing Administrator Fugate did. Some of the other 
issues in the aftermath, I am not involved in those so I can't 
respond to that. But I can tell you that spending money on the 
ground prior to landfall makes a lot of sense and it works.
    Mr. Graves of Louisiana. Mr. Koon, I mentioned earlier, 
when you look at the aggregate of all these changes in 
policies, everything from the new Corps of Engineering 
standards, you look at the V Zone policies that have come in 
place, you look at the NFIP rate changes, and many, many other 
regulatory changes and policies that have been put in place in 
recent years, you are beginning to price communities out of 
being able to live where they are.
    Can you react to that statement and perhaps some of the 
impacts you have seen in Florida?
    Mr. Koon. Yes. Thank you for the question.
    In Florida, obviously, Florida has more flood insurance 
policies than any other State in the country. We have got about 
37 percent of the flood policies. So we are acutely aware of 
the issues surrounding it. And we also saw some of the price 
increases that you referenced in your question earlier.
    It has impacted the communities, but it is also giving us 
an opportunity to consider alternatives and ways to improve for 
the future. In the State there is continuing consideration 
about ways to perhaps privatize flood insurance and encourage 
that market. That is something that the State legislature is 
considering.
    We are also looking at investing more in the community 
rating system portion of the National Flood Insurance Program, 
taking advantage of that program to achieve discounts for our 
policyholders by improving the readiness and resilience of our 
communities. And so it definitely is something that is top of 
mind for leaders in the State of Florida, but it is also an 
opportunity for us to make sure that we better prepare for 
those future disasters by taking advantage of existing Federal 
programs as they are today and fully taking advantage of 
everything that they offer us to help get ready for the next 
storm.
    Mr. Graves of Louisiana. Thank you.
    Mr. Barletta. Thank you, Mr. Graves.
    Chair recognizes Ms. Norton.
    Ms. Norton. I have just one question for Mr. McCarthy.
    We were given an almost impossible task to talk about 
reducing impacts. Essentially what you were asked to testify 
was about reducing impacts and reducing costs, and you have 
gone through the various options. You say in the conclusion of 
your testimony, you mention in the conclusion of your testimony 
something I am particularly interested in, ``Fewer disaster 
declarations would likely result in less spending. But avoiding 
or continuing to mitigate or lessen the impact of future 
catastrophic disaster events may arguably hold the most promise 
in reducing disaster expenditures.''
    Now, you said that in 2014, you say on page 2 there were 
fewer disasters, but of course we understand trends by looking 
over a period of years, and you cite over 25 years, when there 
has been an acceleration.
    Mr. Paulison offered us a graph which was helpful, which 
showed that this is reflected through Democratic and Republican 
administrations. There probably was a reason for the greatest 
rise between Presidents Reagan and George H.W. Bush, probably 
had to do with some hurricane, even less than the rise between 
Katrina and Sandy.
    I also note, especially in light of Mr. Fennessy's 
testimony, that you say, Mr. McCarthy, that fire management 
assistance grants often obviate the need for a major disaster 
declaration because they provide funding that helps States to 
control wild fires. So that is something practical we could do. 
It would mean that the funds would go one place rather than 
another, but it would probably be less than what happens when 
you have one of those huge fires, for example, in California.
    When you get to defining declarations, I say good luck. 
That is basically Presidential, it is the Governor coming to 
the President. And I think Congress might be able to pass 
something that tries to reduce it, but I don't think I would 
advise it.
    Then there is a question I asked to Mr. Fugate about 
changes in the Stafford Act or other ways to look at how we ran 
disaster relief before and now in what looks like a new era. 
You indicate that there were a number of sections we could 
repeal. You did what you were asked to do. For example, you 
said that there was a suggestion that would have applied--and 
here I am quoting from you--``a strict formula to the 
declarations process and also would have reduced the Federal 
share for disaster assistance from 75 percent to 50 percent.'' 
Then you quickly add, ``Through section 320, Congress insisted 
that a formula not be the sole determinant on declarations.'' 
And I submit that as long as this is a union of States, that 
probably is going to be handled on a case-by-case basis.
    The only real hope I see is in an area where you cite some 
confusion, but also some hope. You quote extensively from the 
chairman, who talked about real confusion between various 
programs for mitigating disaster, and you call them mixed 
messages. One mixed message or one that would have caused some 
uncertainty is one from the administration, that introduced 
what you call a nationwide resilience competition with 
resources of just over a billion dollars through the Department 
of Housing and Urban Development. You said it would boost 
future disaster mitigation savings but it wasn't clear that 
this program linked to other programs. You said it didn't have 
the same cost-benefit requirements as the FEMA mitigation 
programs, for example.
    Well, my question for you is, if what the administration 
was doing was saying you have to compete for these funds in a 
competition, wouldn't the competition build in those various 
notions that we now use on a basis of whichever program you 
apply for and get some kind of regularized notion of forcing 
efficiency, moving to real mitigation, and giving funds based 
on that competition to who could do mitigation, who needs to do 
mitigation most, because you would have to compete for funds? 
Why doesn't the very fact of a competition build in the very 
factors that today are resulting in confusion among the various 
programs that are now used to reduce mitigation?
    Mr. McCarthy. That is an excellent point. And I think what 
I would say really is that I think the competition ends in 
March and we will be able to look at it. In fairness, when I 
say that they don't appear to have the same cost-benefit ratio 
in there, well, it is something that could get built in and it 
may be that some applicants are building it in. And in fairness 
to HUD, as they put it out, they mentioned what they were 
looking for was innovation. And at times, I think probably some 
people would look at some of FEMA's mitigation programs and 
think that it didn't encourage enough innovation.
    So I don't mean to say it is not possible. It is a 
competition. I guess what is difficult, though, is that--and I 
apologize, I should note I spent a career at FEMA before my 
past 8 years at CRS--but FEMA has been doing mitigation since 
1988 and that doesn't mean that is where all mitigation money 
must go. But it is something that has been a theme throughout, 
I think, the hearing today is, how much coordination is there 
among agencies? How much do they really talk to each other, 
unless they are told they have to do that?
    And so I guess with the resilience program we will learn a 
lot more when it is done and when they are making the awards. 
We will find out whether it has been innovative and also 
whether they have built in some of the cost-benefit pieces into 
it. It is just that it has just been hard to see this and not 
know whether or not some of the people that have done a lot of 
mitigation across the country, both in predisaster programs and 
post-disaster programs, have been a part of what HUD has 
undertaken now or if it is all new.
    Ms. Norton. Yeah, what I would suggest if you follow the 
money, if the largest amount of money was given for 
competition, imagine, I bet one of the factors in competition 
would be, I think it was Mr. Paulison who testified about the 
common notion of building codes. Well, if you apply for 
mitigation funds and you are sitting there with no building 
code, I wonder if you could win that competition as against 
another jurisdiction who might have an equally good application 
but also had taken some self-help initiative on its own to have 
building codes throughout the State.
    That is the kind of thing I think that would bring together 
what now are what you call mixed messages. I agree, because you 
have several different programs trying to do the same thing, 
and I might add all each with a little bit of money.
    So thank you very much, Mr. Chairman.
    Mr. Barletta. I now recognize each Member for an additional 
5 minutes.
    This question is to Mr. McCarthy and Mr. Paulison. Both of 
you have testified to increasing costs and losses associated 
with disasters. Where do you see these trends going absent a 
shift in public policy?
    Mr. McCarthy.
    Mr. McCarthy. I would just say briefly that, as I mentioned 
in my testimony, seeing predisaster mitigation withering away 
seems to me to be the wrong message. I am not even sure I 
understand, I don't know if it is a difference in philosophy, 
and I don't know how it got to this point. But it seems to me, 
you really do have to get it upfront. You do have a lot of 
enthusiasm after a disaster to do mitigation work after you 
have already spent hundreds of millions repairing things, then 
people want to do mitigation. But I think the important part 
really is to at least consider getting it on the front end.
    And I will turn to the chief.
    Mr. Paulison. You heard Mr. Koon say that we have had years 
up and down, but if you look at the trends over the last 15, 20 
years, actually, it has continued to rise and continued to rise 
and continued to rise. The number of disaster declarations are 
rising. Costs are astronomically rising. So we have to do 
something. We know we have limited dollars. And Mr. Fugate made 
a comment, said we have got to respond, we know we have to 
respond. So he didn't have the money upfront to do the 
mitigation stuff, but he had to have money to do the response 
side.
    So somewhere along the lines, and, again, that is why I 
appreciate your blue ribbon panel to step back and look at 
this, but having a third party takes the politics out of it and 
to come up with some good solid recommendations that allows us 
to really get a handle on this. If we don't do anything, if we 
do nothing, I see it continue to rise and rise, and it may be 
beyond the capacity to deal with the response side.
    Mr. Barletta. Mr. Paulison, given your extensive background 
in disaster response and recovery, what are your thoughts on 
ways that the Federal Government could help reduce costs and 
losses related to disasters?
    Mr. Paulison. I think it is a partnership, and it is not 
just a partnership between the Federal Government and the 
States, it is the State and the locals, it is the locals and 
individuals, and it is the private sector working together. How 
are we going to protect our businesses? How are we going to 
protect our homes? How are we going to protect our communities 
from disasters we know we are going to have? And we haven't 
done that. We have had an extremely difficult time, and I am 
sure Mr. Koon will tell you this, convincing the public to 
prepare themselves for a catastrophic event.
    We saw Hurricane Wilma, not a catastrophic hurricane, it 
went across the top of my house, but yet we had tens of 
thousands of people the hour the storms died down in line for 
food and water because they hadn't prepared themselves. That 
cost the Federal Government millions and millions of dollars to 
do that.
    So it is not only the predisaster mitigation, it is the 
planning, it is the training, it is educating the public of 
what we expect for them, and getting the private sector to 
protect their businesses also. We lose about 40 percent of our 
small businesses in every catastrophic event. They just don't 
have the wherewithal to come back. That is a huge hit on the 
economy. We saw in Hurricane Andrew going through Homestead, it 
took 20 years for that community to recover because the small 
businesses failed, there were no jobs, and people bailed.
    So it is a partnership, and it is something we have to work 
together. We have got a great FEMA Administrator that 
recognizes that, and we just have to give him the resources to 
make it happen.
    Mr. Barletta. To all witnesses briefly, if any of you, we 
will start with Mr. McCarthy, are you aware of examples where 
States have used Federal programs to invest in a way that has 
already shown to have avoided additional damage and loss?
    Mr. McCarthy. Yes, Mr. Chairman. There are a lot of 
wonderful examples, a lot of best practices that we can see 
across the country, from Kinston, North Carolina, to St. 
Charles County, Missouri, a lot of examples where there is 
flooding every year except there aren't people there anymore 
and there aren't businesses there anymore and we are saving 
money each time. It is the dog that doesn't bark and it doesn't 
get headlines, but a lot of that has really worked. And I think 
too those are just a few examples.
    Mr. Barletta. Mr. Koon.
    Mr. Koon. Mr. Chairman, we have already discussed some of 
the HUD resiliency program. In addition to that, I think some 
of the programs offered by the Small Business Administration do 
tremendous work across the country and are a great resource to 
the State of Florida. Also our cooperation with the National 
VOAD programs, again, help us really do a good job of meeting 
the needs of our citizens using Federal and other dollars as 
well.
    Mr. Barletta. And, Mr. Fennessy.
    Mr. Fennessy. FEMA's Hazard Mitigation Grant Program has 
been hugely successful within the State of California. It 
allows agencies and the community to fund defensible space, the 
creation of defensible space, that allows us as firefighters to 
go in and protect those homes, and when we are not in front of 
their homes allows fires to pass those homes without doing any 
damage or very little damage. It also allows communities to 
invest in noncombustible building materials.
    What we have experienced--and not just in California, you 
see it all over the western U.S.--is that, whether it be new 
construction and the building codes dictating certain types of 
materials, that is all well and good for the new construction 
or those communities that maybe have suffered through a fire 
and have been rebuilt, it is the existing nonconforming 
structures and the owners that we really have the challenges 
with and really urging them to get involved in some of these 
grant opportunities and allow us to protect them in a better 
way. But certainly FEMA's Hazard Mitigation Grant Program has 
been a huge success.
    Mr. Barletta. Thank you.
    Chair now recognizes Ranking Member Carson.
    Mr. Carson. Just one last question, Chairman, for Chief 
Fennessy.
    Sir, what role can the Assistance to Firefighters Grant 
Program play in helping communities prepare for the threat of 
wildfires? That was my only question.
    Mr. Fennessy. Sure. That program has been hugely 
beneficial, not only for large fire departments, but certainly 
the smaller and volunteer fire departments, not only by way of 
creating grant opportunities for fire equipment, but also 
training. The Assistance to Firefighters Grant, the Fire Act 
grant has benefitted not only our agencies, but our agencies 
all over this country in providing a wealth of equipment that 
we would not be able to afford on our own.
    The SAFER Grant, which is a staffing grant that is also an 
Assistance to Firefighters Grants, has provided staffing, much-
needed staffing for large and small departments. So that 
program has been hugely beneficial, and just in California 
alone there are a number of training programs that would not 
have been possible had that grant funding not been available. 
So we appreciate the opportunity for those grants.
    Mr. Carson. Thank you.
    Chairman, I yield back.
    Mr. Barletta. Thank you.
    Before closing, I have one final question to all witnesses. 
What do you think of our proposal to conduct a comprehensive 
review of disaster assistance and perhaps create a task force 
or a blue ribbon commission to lead this study and develop 
solutions? And would this effort be helpful to reducing future 
disaster costs and better protect our communities?
    Mr. Paulison. I will comment because I have already 
commented on it a couple times. But I just want to reemphasize 
I think how important that would be. Like I said, we don't 
understand what all the costs are. I do think having a third-
party review like that is definitely going to help get some 
good, solid answers without the politics in it, and, again, I 
applaud you for taking that on.
    Mr. McCarthy. I will just mention, as you mentioned in your 
opening statement, it has been at least 20 years since any of 
this kind of work has been done and we at CRS would be happy to 
support you on this.
    Mr. Koon. Yes, we do, and we are eager to participate.
    Mr. Fennessy. Certainly, the International Association of 
Fire Chiefs stands ready to assist and participate.
    Mr. Barletta. Thank you. I look forward to working with 
each and every one of you and welcome your input as we move 
forward on this initiative. And I want to thank you all for 
your testimony. Your comments have been very helpful to today's 
discussion.
    I have also received written statements for the record from 
the Interlocking Concrete Pavement Institute and the National 
Concrete Masonry Association. I thank these organizations for 
their input on these important topics, and I ask unanimous 
consent that these two statements be included in the record. 
Without objection, so ordered.
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    Mr. Barletta. If there are no further questions, I would 
ask unanimous consent that the record of today's hearing remain 
open until such time as our witnesses have provided answers to 
any questions that may be submitted to them in writing, and 
unanimous consent that the record remain open for 15 days for 
any additional comments and information submitted by Members or 
witnesses to be included in the record of today's hearing. 
Without objection.
    I would like to again thank our witnesses for their 
testimony today. This meeting is adjourned.
    [Whereupon, at 12:46 p.m., the subcommittee was adjourned.]
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