Hearing of the Economic Development, Public Buildings, and Emergency Management of the House Transportation and Infrastructure Committee - "Five Years After Katrina: Where We Are and What We Have Learned for Future Disasters"

Statement

We are pleased to welcome our witnesses to another in hearing our important series of Subcommittee hearings to make certain that there is real progress in the recovery from Hurricanes Katrina and Rita. Today we will evaluate the efforts of the Federal Emergency Management Agency (FEMA), as well as the affected state and local governments in their efforts to proceed more rapidly with their work on the long five-year recovery from these storms. This hearing is part of a vigorous oversight agenda that this Subcommittee has pursued on a bi-partisan basis since the storms struck our nation in 2005.

Today we will hear about the arbitration program, mandated in the American Recovery and Reinvestment Act (Recovery Act), as well as other steps that the leadership at FEMA is using to improve the pace and quality of recovery efforts in the Gulf Coast. Nearly a year ago, before our arbitration mandate was instituted to break the long logjam on billions of dollars in projects, the Subcommittee received testimony about how the arbitration program would be structured. Today, we are not merely looking at what has been done and what is currently being done. We also are looking forward to see what lessons we can learn from these experiences for future disasters. We will hear from those who are engaged in these efforts to improve the recovery from Hurricanes Katrina and Rita, and also from experts from the federal government and academia, who will provide analysis on these efforts.

Prior to last year, FEMA resisted efforts from this Subcommittee and other stakeholders to try to "break the logjam" of Public Assistances Projects that was seriously impeding the recovery from these storms. Yet, at that time, in testimony before this Subcommittee, FEMA officials denied that there was even a problem with the Public Assistance program.

Prior to last year, FEMA resisted efforts from this Subcommittee and other stakeholders to try to "break the logjam" of Public Assistances Projects that was seriously impeding the recovery from these storms. Yet, at that time, in testimony before this Subcommittee, FEMA officials denied that there was even a problem with the Public Assistance program.

We are encouraged that recent hearings and the written statements submitted for today's hearing indicate progress. Like an individual who is in personal recovery, the first step to that improvement is acknowledgment that there is a problem. FEMA Administrator Craig Fugate did acknowledge that there were problems with the recovery from these storms at our Subcommittee hearing earlier this year. FEMA is taking steps short of arbitration to resolve disputes, including appointing special "joint expediting teams" of FEMA and state officials to resolve lingering disputes.

In some cases, common sense solutions are being applied; for example, moving FEMA officials so they are in the same city as their state counterparts. Another costly and exasperating example is eliminating "dueling consultants," where both sides would hire licensed professionals to provide expert opinions, a recommendation of the subcommittee. Astonishingly, both state and federal officials were paid with federal disaster funds to essentially set up an adversarial process to determine costs. This was a prodigious waste of money. At a Subcommittee hearing earlier this year, Administrator Fugate announced that FEMA would move to a system, when appropriate, allowing both parties to rely on the advice of a single licensed professional.

It is important to emphasize that many of the items that are recommended to improve the Public Assistance program in testimony today are already authorized and within FEMA's discretion to carry out. For example, FEMA currently has authority to engage in alternative dispute resolution (ADR) as a result the Administrative Dispute Resolution Act of 1996, and has been encouraged to do so by this Committee.

A number of witnesses today note that one significant improvement to FEMA's Public Assistance program would be to move to a system that pays state and local governments for repair and reconstruction projects on the basis of the cost estimates, as is done in the insurance industry. FEMA is not only encouraged to do so, but has been mandated to do so by the Disaster Mitigation Act of 2000, a bill that was passed by this Committee, enacted by Congress and signed by President Clinton nearly ten years ago. That act mandated that FEMA move to a cost-estimating system once FEMA implemented a rule to do so. It is unconscionable that, nearly ten years later, the required rulemaking has not occurred. As this Committee has previously noted, had FEMA implemented this provision as it was authorized to do in 2000, many of the delays in the recovery from Hurricane Katrina would have been avoided. In order to remedy this delay, legislation recently passed by the Committee would require FEMA to implement this provision within 180 days of enactment. However, legislation should not be necessary and FEMA should be doing this on its own.

I am looking forward to hearing from today's witnesses on how the arbitrations are proceeding, how FEMA and the states are moving forward on the recovery from these devastating storms, and the lessons that their experiences teaches us for future disasters.

I would like to thank the witnesses for appearing today and I look forward to their testimony.

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