Statement of The Honorable James L. Oberstar
Today, the Subcommittee will receive an update on community and infrastructure recovery through the Public Assistance program implemented by the Federal Emergency Management Agency (FEMA) in the aftermath of Hurricanes Katrina and Rita. It is unfortunate that more than four years after these devastating storms, we are still talking about how we can improve recovery efforts.
Previously, when our nation faced large or unusual disasters, FEMA was quick to adapt and provide solutions to unique problems that would arise, often working with Congress on those solutions.
After Hurricane Katrina, things were very different. FEMA was an agency within the Department of Homeland Security (DHS), and not an independent agency that reported directly to the President and Congress. As I have said previously, FEMA’s performance as an agency has suffered since its inclusion in the Department of Homeland Security in 2003.
Even long after the response to Hurricane Katrina, the agency’s placement in DHS had a detrimental effect on the residents of the Gulf Coast. There were delays in decision making, which meant that delivery of critical assistance to citizens was delayed. I am still deeply concerned that, even with the new leadership at FEMA, if FEMA remains in DHS it will not be able to respond to disasters in the manner the Nation needs and expects.
Hurricane Katrina proved to be the costliest natural disaster in American history. The storm had a massive physical impact on the land, affecting 90,000 square miles, which is an area the size of Great Britain, and hundreds of thousands of citizens. Today, we will hear from Craig Taffaro, Parish President of St. Bernard Parish. I was in St. Bernard Parish shortly after the storm and saw the impact first hand. I was astounded to see homes that did not have water marks to indicate the level of flooding; because the flood waters had reached levels above their roofs.
Today, we will hear testimony that things are improving. There is new leadership at FEMA, and they are bringing solutions to lingering problems. Unfortunately, this is years too late as the last Administration refused to bring common sense solutions to problems, or in many instances, acknowledge that there were problems in recovery efforts. All of the recovery steps that we will hear about today, are items that FEMA had the authority to implement four years ago, but was unable to do because of DHS bureaucracy.
While things may be improving, it should not stop us from trying to improve them further. Recently, I have had discussions with other Members of this Committee as to whether additional authority should be provided to FEMA to help facilitate the recovery from these storms. A good place to start may be H.R. 3247, the “Hurricanes Katrina and Rita Recovery Facilitation Act of 2007,” which passed the House in October 2007. H.R. 3247 provides for a higher Federal contribution for alternate projects from the current level of 75 percent to 90 percent, increases the size of projects that can move forward on the basis of estimates, from $55,000 to $100,000 and for arbitration methods. While we could not get the Other Body to move that legislation in the last Congress, it may be possible to move a similar, more streamlined bill, in this Congress if such legislation might still prove constructive. We intend to inquire with our witnesses today their views on this subject.
I also hope what we hear today can serve as a lesson for future disasters, so that if the country is ever faced with such catastrophic storms again, we will not wait four years for common sense solutions to be implemented.
I welcome our witnesses and I am pleased that we will examine these important issues today.
Statement of The Honorable Eleanor Holmes Norton
Subcommittee on Economic Development, Public Buildings, and Emergency Management Hearing On:
“Final Breakthrough on the Billion Dollar Katrina Infrastructure Logjam: How is it Working?”
September 29, 2009
We are pleased to welcome our witnesses to another in a series of hearings our Subcommittee is holding to oversee and evaluate the efforts of the Federal Emergency Management Agency (FEMA), as well as the affected state and local governments, to proceed more rapidly with their work on the long four-year recovery from Hurricanes Katrina and Rita. Today we will hear specifically about how the new arbitration program, mandated in the American Recovery and Reinvestment Act (Recovery Act), as well as about other steps that the new leadership at FEMA and the Department of Homeland Security are taking, is working to improve the pace and quality of the recovery efforts in the Gulf Coast.
At a hearing early in this year, we were astonished to uncover almost $3.5 billion caught in a stalemate between FEMA and the state of Louisiana, from which neither could extricate itself. Based on today’s testimony, as well as numerous meetings and discussions that Members and staff have had with officials at all levels of government in the Gulf Coast, it appears that progress may have begun since President Obama, Secretary Napolitano and Administrator Fugate took office.
However, it is exasperating to have to note that many of the improvements now being implemented are not new ideas. Some that have been proposed by this Subcommittee for two and a half years are just now coming on-line. During the last administration, FEMA resisted efforts to break the logjam, preferring its own traditional devices.
Seeing little progress two years ago, this Committee reported H.R. 3247, which the House passed in October 2007, encouraging the use of third parties to review and expedite public assistance appeals, as well as simplified procedures under which small projects would be permitted to proceed on estimates for projects up to $100,000. We passed this bill, which also raised the Federal contribution for certain projects from 75% to 90%, not once, but twice, as well as a similar bill in September 2008. It is unfortunate that the Senate was never able to pass this legislation.
However, even if the H.R. 3247 procedures permitting third-party review had been enacted, FEMA appeared unwilling to choose an effective third-party process. The past FEMA leadership never faced the structural impediments that obstructed agreements for the unprecedented Gulf Coast disasters. Given the huge funding amounts at stake, each side has built-in impulses – FEMA to resist approving more than it theoretically should and therefore to parse the analysis to require state responsibility, and the state of Louisiana to insist on more funds and urge federal responsibility in light of the state’s devastation. Neither side has had much incentive or leadership to negotiate with any efficiency or goals except for its own caged views.
Considering the unprecedented challenge of enormous amounts of money and complexity, it should have been clear that without deadlines, the state and FEMA would continue to engage in negotiations for as long as they wanted. Now, all involved have exhausted the available alternatives and are left with a record of unnecessarily delayed recovery. Louisiana residents are suffering through the greatest economic crisis most have ever experienced, while billions of dollars have been left on the proverbial table for years, waiting to be spent on construction of the new Charity Hospital and other vital infrastructure. The accumulated hardship on Louisiana residents demands immediate action. Only mandated third-party intervention or negotiations on a timeline are left as acceptable.
As a result of the new arbitration program authorized by Congress in the Recovery Act, FEMA has entered into an agreement with the Civilian Board of Contract Appeals (CBCA), a part of the General Services Administration, which also comes under this subcommittee’s jurisdiction. The CBCA’s expertise in resolving disputes in Federal construction contracts should prove invaluable if fully used, with determined leadership, without delay.
It is unfortunate that new legislative language has been necessary to get action, particularly since it has been clear to the subcommittee that FEMA had sufficient existing authority to implement this or similar programs using third-party dispute resolution, even before this subcommittee put FEMA-specific dispute resolution into law during the last Congress. Even today, while the arbitration provision in the Recovery Act is mandated for projects exceeding $500,000, nothing prohibits FEMA from offering arbitration for smaller projects. Nor does legislation prohibit FEMA from using other types of alternate dispute resolution.
If efficient and timely results are not produced, resistance to using time-limited alternative dispute resolution on Gulf Coast recovery will not be tolerated. For example, should simplified procedures permitting small projects from $55,000 to $100,000, or a possibly higher figure, be permitted to proceed based on estimates? During this “Great Recession” has the usual state match for infrastructure construction been affected by Congressional failure to pass the provision in HR 3247 that would have raised the federal match from 75% to 90%?
Again, we thank our FEMA representatives, our witnesses from the Civilian Board of Contract Appeals and witnesses from Louisiana, for preparing testimony today to help the subcommittee better understand how to ensure that the recovery efforts in the Gulf Coast continue to improve.
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