FEMA Screws Up, Taxpayers (Once Again) Take One For The Team

On August 28, 2005, the day before Hurricane Katrina made landfall, I was living in Slidell, Louisiana.  I packed my then 8-year-old son, our two dogs and two cats and a couple of suitcases into my Honda Civic and headed north on I-59.  For those of you not familiar with the geography of southern Louisiana, Slidell is roughly at the intersections of Interstates 10, 12 and 59:

We were able to return to our home after a week-long evacuation to Naval Air Station Meridian (Mississippi) and found minimal damage (flooded garage, shed and fence destroyed, several trees down and, of course, the terrible smell associated with week-old rotten food).  We stayed just long enough to assess the damage and for my son to unpack and repack his suitcase, then we were back on the road again, this time to Jackson, Mississippi, the location of the closest airport offering regular commercial flights into and out of the area.  Since his school was closed for the foreseeable future, he went to stay with his grandmother in Maine (where he got his 15 minutes of fame due to an interview at the Portland airport; apparently not much happens in Maine).

We were lucky.  We survived.  Our house survived.  Even our pets survived.  I immediately went to work with my shipmates from the U.S. Navy’s Fleet Survey Team and members of the National Oceanic and Atmospheric Administration (NOAA), the U.S. Army Corps of Engineers (USACE) and the U.S. Coast Guard (USCG) to make New Orleans, Gulfport and the rest of the areas affected by Katrina safe for navigation, especially for bringing in relief supplies.

Eventually I made it back to my neighborhood and started cleaning up.  About a month later, my power came back on.  During the time that my power was out, I had purchased a generator.  I had also purchased a chainsaw.  (Both of which I still own.  Did I mention I now live in an apartment?)  One day, a representative of the Federal Emergency Management Agency (FEMA) came by the house and asked if I had incurred any Katrina-related expenses.  He helped me fill out some forms to receive compensation for the generator and chainsaw.  I told him the Navy had paid (or would be paying) for some or all of my (and my son’s) evacuation costs.

Apparently not everyone’s dealings with FEMA went so smoothly, with tens of thousands of people receiving “overpayments”:

 The debts, which average about $4,622 per recipient, represent slightly less than 5 percent of the roughly $8 billion that FEMA distributed to victims of Katrina and other 2005 storms.

And for those of you for whom math is hard:

Last year, the agency sent out debt notices in an effort to recover more than $385 million it says was improperly paid to victims of hurricanes Katrina, Rita and Wilma in 2005.

Now, over six years later, rather than working with these individuals to set up payment plans to recover money they were never intended to receive to begin with, “Congress approved legislation that allows FEMA to waive many of the debts.”  Thanks FEMA!  Thanks Congress!  I realize that in the grand scheme of things $385 million doesn’t make much difference, but as long as you’re forgiving debt for absolutely no reason, why should I bother paying my taxes?

Perhaps I should write to Senator Mary Landrieu (D-La.):

“This announcement will bring great relief to many honest disaster survivors who never intended to misuse funds or take anything to which they were not entitled,” Landrieu said in a statement. “To have forced people who experienced great tragedy to pay large sums of money back to the government because of someone else’s mistake would have been incredibly unfair.”

So apparently the moral of this story is this:  If I find a bag of money in the street (or get a check in the mail) and the rightful owner someday comes to claim it, it’s not fair to ask me to pay that money back.

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3 thoughts on “FEMA Screws Up, Taxpayers (Once Again) Take One For The Team

  1. Fairness? Come on.

    Actually, it is a question of how much it costs to get the money back. What I hope has happened is that someone did the proper analysis and figured out that it would cost more than the $385 million to get the $385 million back.

    Getting you to pay your taxes is actually pretty easy. Especially you. You have a lot of costs that would be incurred if you decided not to pay your taxes. The incentives are designed that way. So you make the decision that the cost of paying your taxes is less than the cost of not paying your taxes. That’s how you make every decision you make, every day.

    Congress could farm out the taxes to a collection agency. Say they sell the right to collect that $384M to someone for ten cents on the dollar. States, localities, and private businesses often do this. But history has shown that tax farming is a very risky business, and your garden-variety representative wants to stay in office. And my guess is that Congress as a whole decided that the cost of farming out these debts was greatly in excess of $385M.

    • I completely agree that at least in some cases the costs of collecting the debt were certainly going to be greater than the amount that would have been collected. That doesn’t mean the debt should have been forgiven. As far as I know, it costs little or nothing for the government to simply carry the debt and neither try to collect it nor forgive it. I think your point is the potential political costs had the debt not been forgiven. If that is the case, then it seems like you’re implying Ms. Landrieu just bought about 77,000 votes, either for herself or for the current administration.

  2. My point is that there was a decision made that weighed the various costs and benefits or incentives. The decision makers – specifically Ms. Landrieu – saw that the cost of carrying the debt had a certain reward, and the cost of forgiving it had another reward. FEMA saw the costs and benefits differently. You and I also see them differently. My pollyanna hope is that someone actually crunched the numbers and found that this is a proper and economic solution and left the politics to others.

    Yes, I agree. She bought a bunch of votes and never personally handed a dollar out to anyone. Check out her FAQ on how to get the debt relief. And if anyone has any questions, they can call her office and ask. I wouldn’t doubt that they might even do some of the paperwork for them. But that’s politics.

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