Order Code RL31464
Report for Congress
Received through the CRS Web
Federal Disaster Policies After Terrorists Strike:
Issues and Options for Congress
June 24, 2002
Coordinated by Keith Bea
Specialist, American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress
Federal Assistance After Terrorists Strike:
Issues and Options for Congress
As a result of the terrorist attacks of 2001, a plethora of legislation has been
enacted and continues to be considered by the 107th Congress to address homeland
security and emergency management issues. Much of the debate in and out of
Congress focuses on legislation that addresses policies and practices intended to
prevent future attacks. Congress is also considering other policy issues, including
those that would be implicated should another attack occur, despite the best
prevention and deterrence efforts. How will the federal government respond to the
short- and long-term needs of stricken communities? Such policies guide federal
consequence management actions.
This report, prepared at congressional request, is intended to assist Congress as
it considers options for consequence management legislation. The report collects and
examines information on federal policies that would be implemented in the event that
other terrorist attacks occur. It then asks about each of these policies: Based on
experiences gained thus far, should Congress consider changes in federal
consequence management policies to address the effects of possible future attacks?
The report explores two types of issues—selected administrative issues pertinent to
the delivery of assistance, and selected policy issues about the assistance provided.
The 12 issue sections in the report follow a common format: an issue statement,
background information and analysis (including information specific to terrorist
attacks), and policy options. For the most part, this report concentrates on the impact
of the airliner attacks in New York City because the consequences of those attacks
in a major urban center raise complex issues of response and recovery that were not
as evident in Pennsylvania, Virginia, and the District of Columbia after the other
airline crashes and the anthrax mailings.
The report is not a critique of federal consequence management policies and
actions. Despite record levels of federal assistance, all expectations and needs after
terrorists strike will not be, and cannot be, met. Unfortunately, other perceived
failures or questions will likely be brought to the attention of Congress in the event
that other terrorist attacks occur in the United States.
This report is not a comprehensive collection of all pertinent issues. It has been
prepared to help Members of Congress consider the relative merits of selected
legislative options related to federal consequence management in light of reports of
problems, deficiencies, or questions raised after September 11. Other issues that
Congress might elect to consider will be identified and included in future updates to
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ADMINISTRATIVE ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Definition of “Major Disaster” and “Emergency” . . . . . . . . . . . . . . . . . . . . 14
Eligibility for Stafford Act Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Federal Coordination of Recovery Assistance . . . . . . . . . . . . . . . . . . . . . . . 33
Expedited Public Health Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Tracking Federal Costs of Disasters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
POLICY ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Local Government Revenue Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Reimbursement for Security Alerts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Environmental Hazard Assessment and Communication . . . . . . . . . . . . . . 68
Indoor Air Testing and Cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Measures of Need for Temporary Housing . . . . . . . . . . . . . . . . . . . . . . . . . 90
Small Business Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Assistance to Education Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Summary of Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
List of Tables
Statutory Definitions of “Major Disaster” and Emergency . . . . . . . . . 17
Federal Disaster Assistance Obligations, FY1984-1993 . . . . . . . . . . . 50
Summary of CDL Program, 1976 to 2001 . . . . . . . . . . . . . . . . . . . . . . 56
Summary of CDLs by Current Status, 1976 to 2001 . . . . . . . . . . . . . . 57
CDLs Greater than $5 Million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Appreciation is extended to Angela Napili of the Office of Information Resources
Management for bibliographic and research assistance.
Federal Assistance After Terrorists Strike:
Issues and Options for Congress
Following the terrorist attacks of September 11, 2001, Congress and the Bush
Administration quickly moved to meet the needs of victims, their families, and the
stricken communities and businesses of New York City and Virginia. Congress
appropriated funds in emergency supplemental legislation (P.L. 107-38 and P.L. 107117) for a range of purposes including payments to victims, removal of debris,
reconstruction of federal buildings and non-federal public facilities, and emergency
services. The assistance was provided by federal agencies through programs that
have been long established under existing laws that authorize grants, loans, technical
assistance, and the use of federal resources to save lives and property and to speed
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (the
Stafford Act) is a key statute that authorizes the President to determine when and
what types of federal assistance should be dedicated because a disaster has
overwhelmed state and local resources.1 Other statutes authorize specified federal
agency heads to provide aid for certain activities or purposes.2
Since September 11 considerable assistance, roughly $6 billion through March
2002, has been obligated for disaster assistance and other non-defense purposes
solely from the Emergency Response Fund established pursuant to appropriations in
P.L. 107-38.3 (As noted in the section “Tracking Federal Costs of Disasters,” it is not
possible to accurately identify total federal disaster assistance obligations.)
According to the Congressional Budget Office, $11.8 billion had been appropriated
for communities and victims for disaster relief as of March 31, 2002, in P.L. 107-38
and P.L. 107-117.4 President Bush reportedly promised that at least $20 billion
42 U.S.C. 5121 et. seq.
For an overview of federal assistance programs see: CRS Report RL31125, Recovery from
Terrorist Attacks: A Catalog of Selected Federal Assistance Programs, coordinated
by Ben Canada. See also: CRS Report RS20739, Federal Disaster Relief Programs: Brief
Summaries, by Keith Bea.
U.S. Office of Management and Budget, “Report on Expenditures from the Emergency
Response Fund” (Washington: March 31, 2002).
U.S. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 20032012 (Washington: Jan. 2002), p. 117.
would be provided to New York.5 Despite this assistance, news reports, statements
by officials testifying before Congress, and other sources provide insights into
perceived failures, gaps, and weaknesses in the range of federal policies.
This report has been prepared at the request of Members of Congress who
identified issues that might be explored by Congress if other terrorist attacks occur
in the United States. The request generally sought information that would facilitate
congressional consideration of existing governing authorities in order to improve
federal action in the future. The specific issues identified by the Members included:
1. Assisting communities suffering due to tax revenue shortfalls that result
from a terrorist attack;
2. The definitions of “major disaster” and “emergency” in the Stafford Act, and
related presidential declaration authority, to determine if other provisions may
be necessary to respond to destruction resulting from a terrorist attack;
3. Policies and practices concerning the reimbursement of costs incurred by
state and local governments for “high security alerts” issued by the director of
the Office of Homeland Security, or other federal officials;
4. Gaps in federal statutes that address environmental hazards and public health
5. The issues associated with economic development policies after disasters
(including terrorist attacks) occur, notably with regard to the provision of loan
assistance to small businesses;
6. The availability of information on federal costs incurred from past disaster
declarations and the need to improve the quality of such information for
7. Federal coordination of large-scale recovery efforts after terrorist attacks,
including current procedures and plans for agencies to combine resources;
8. Possible revision of provisions concerning the eligibility of organizations for
Stafford Act assistance, such as the expansion of the definitions section to
include certain for-profit enterprises such as utilities or medical institutions;
9. The unmet needs of educational institutions and systems.
This report has 12 issue sections because four separate entries have been included on
the fourth issue, gaps in environmental and public health policies.
Raymond Hernandez, “Bush Offers Details of Aid to New York Topping $20 Billion,” The
New York Times, March 8, 2002, p. A1.
Because the Stafford Act, most of which is administered by the Federal
Emergency Management Agency (FEMA), authorizes funds for a wide range of
disaster assistance activities, it is the focus of much of the discussion in this report.
However, federal consequence management policies are based upon statutory
authorities beyond the Stafford Act. Accordingly, the report provides information
on and discusses policy options for other statutes administered by federal agencies
other than FEMA.
The 12 issue areas included in the report may be viewed as an initial attempt to
identify areas of federal policy that Congress might consider. As debate proceeds on
legislative options, other issues will likely be identified and included in updates to
this report. This report is not intended to be comprehensive in identifying potential
issues for congressional consideration, but of assistance in debate on specific policy
issues or in a reconsideration of a range of federal emergency policies.
Federal Policy Limitations. Certain needs are common to all disasters,
whether of terrorist or natural origin. Survivors require temporary shelter and
possibly long-term housing alternatives when insurance coverage is nonexistent or
inadequate. Threats to health increase, financial assistance might be sought to meet
unexpected urgent needs, and public services might be disrupted or destroyed.
Federal disaster assistance policy has evolved over much of the Republic’s existence
to better meet these needs and to address others previously unmet.6
As a result of the growth and development of benefits over decades, citizens
have apparently developed increasing expectations of the assistance to be provided
after catastrophes. As summarized by one Member of Congress after Hurricane Hugo
struck the Carolinas and an earthquake destroyed parts of San Francisco in 1989:
I think one of the problems we have often had is that the expectations people
have for what FEMA is going to do are often not matched by what FEMA is able
to do, quite frankly. I think there has been a situation where we have raised
expectations and those expectations have not been met.... Perhaps the real issue
here is how we educate people to what FEMA is able or not able to do given the
That perception is not limited to FEMA and the policies it implements; it
arguably applies to all federal consequence management policies. Some expectations
cannot be met by the federal government because they are unrealistic, costly, or
difficult, if not impossible, to provide to all victims. For many victims of disasters,
For an overview of the historical basis for federal disaster assistance policy see: Michele
L. Landis, “Let Me Next Time Be Tried by Fire: Disaster Relief and the Origins of the
American Welfare State 1789-1874,” Northwestern University Law Review, vol. 92, Spring
1998, p. 967-1034. For information on the relatively recent evolution of federal disaster
policies see: U.S. Congress, Senate Bipartisan Task Force on Funding Disaster Relief,
Federal Disaster Assistance, S. Doc. 104-4, 104th Cong., 1st sess. (Washington: GPO, 1995).
Statement of Representative William F. Clinger, Jr. in: U.S. Congress, House Committee
on Public Works and Transportation, Subcommittee on Investigations and Oversight,
Federal Emergency Management Agency’s Response to Natural Disasters, hearings, 101st
Cong., 2nd sess., May 1 and 2, 1990 (Washington: GPO, 1991), pp. 127-8.
federal assistance cannot compensate for certain losses, including the death of or
permanent injury to loved ones, emotional trauma, and permanent changes in
neighborhoods. Some victims or communities may never be the same, and some
losses from terrorist attacks, in particular, can never be compensated. Other
expectations may be considered more realistic, but the needs of individual victims
and communities may overwhelm available federal resources. Despite the best of
intentions and efforts, the federal government cannot make whole the communities
that have been victimized by terrorist attacks. Federal aid assists, but does not
completely heal or resolve, losses. Historically, Congress has established the
boundaries of the extent to which expectations should be met.
The attacks of September 11 have renewed congressional interest in evaluating
the effectiveness of federal emergency management policies (now referred to, to
some extent, as homeland security).8 Both the scope and the administration of those
policies are under review9 as Members of Congress hear from constituents about
unmet needs as well as administrative difficulties that may be frustrating, considered
inhumane, or seen as incomprehensible. Throughout, Members of Congress will be
called on to balance perceived needs with fiscal and constitutional limitations.
Overall Structure of Report. This report provides background information
and policy analysis on both administrative and policy issues related to the
consequences of terrorist attacks in the United States. The report is intended to assist
Members of Congress and staff in the evaluation of legislation already introduced and
options for new legislation. While the terrorist attacks have served as catalysts for
the current debate, most of these issues apply equally to other catastrophic events.
As shown in the “Background” information included in each issue section, many of
these issues have been debated in the past, sometimes without resolution.
The first section of the report addresses administrative issues that have been
identified since September 11. These issues include the criteria used to determine
which communities or victims receive assistance, the procedures used to administer
the assistance, and the collection of information about the assistance provided. The
specific issues discussed include the following:
! Definition of “Major Disaster” and “Emergency”: What are the terms used in
federal statutes to trigger federal assistance; should Congress consider
legislation to revise the criteria for federal action?
The term “emergency management” includes a range of actions that involve planning for
disasters, responding to immediate needs, stimulating the long-term recovery of the affected
area, and reducing disaster risks (mitigation) for the future.
The CRS Terrorism Electronic Briefing Book provides overview information on
congressional action and issues under debate. See:
[http://www.congress.gov/brbk/html/ebter1.shtml], visited June 11, 2002. For a compilation
of legislation introduced on all facets of the terrorism issue, see:
[http://www.congress.gov/brbk/html/ebter149.html], visited May 23, 2002.
! Eligibility for Stafford Act Assistance:
Should private, for-profit
organizations be eligible to receive grants and technical assistance provided
to public or nonprofit organizations?
! Federal Coordination of Recovery Assistance: Do existing authorities and
plans governing federal recovery programs sufficiently facilitate coordination
of federal assistance?
! Expedited Public Health Studies: To protect citizens from diseases or health
risks, should federal law be amended to expedite public health studies?
! Tracking Federal Costs of Disasters: Is legislation needed to require the
systematic compilation of federal disaster assistance expenditures?
The second section of the report reviews some of the emergency management
policy issues reported or discussed since September 11. The types and amount of
federal assistance provided and options for federal involvement in meeting victims’
needs are discussed in this section. The seven substantive policy issues included in
this report include the following:
! Local Government Revenue Loss: Should the federal government provide
assistance for non-federal governments’ tax revenue replacement? Is so,
under what limitations?
! Reimbursement for Security Alerts: What are the options for possible federal
participation in or reimbursement of security costs associated with terrorist
! Environmental Hazard Assessment and Communication:
Congress address concerns that responses to threats posed by environmental
hazards have been deficient and have failed to protect the health of residents
! Indoor Air Testing and Cleaning: Are statutory and administrative policies
sufficient to establish responsibilities for these tasks?
! Temporary Housing: Should Congress reconsider existing authorities for the
provision of temporary housing needs after terrorist attacks?
! Small Business Assistance:
In the event of a disaster of catastrophic
magnitude, should federal authorities that stimulate recovery be revised?
! Assistance to Education Systems:
Are there unique and unmet needs
associated with effects of attacks that result in damages to public education
Caveats: Limitations of This Report. Three major caveats should be kept
in mind by readers of this report. First, the sources (generally news stories) used to
identify issues or problems encountered after September 11th may be of questionable
accuracy, may not be corroborated, or may have been produced with a partisan or
biased intent. Second, the report has been prepared to address issues that might arise
if the United States is attacked again. The likelihood of future attacks has not been
assessed in the preparation of the report; the assumption that other attacks will take
place might (we hope) prove incorrect. Third, the range of issues included in this
report is incomplete but partially indicative of the consequence management policy
issues Congress might decide to consider.
Information Sources. The first limitation concerns the information sources
used to prepare this report. A search of databases and agency contacts reveals that
only one report has been issued by a federal agency to summarize and identify
problems or issues that arose from the September 11 attacks.10 Some non-federal
organizations have completed limited “lessons learned” reports on issues primarily
associated with the emergency response phase, such as protection for first
responders,11 the collection and management of blood supplies,12 and health care
Also, federal information sources were not consulted for every issue raised in
the report. Other than the collection of primary data for the “Local Government
Revenue Loss” section, no attempt has been made to consult with officials from the
Federal Emergency Management Agency (FEMA) to assess the validity of some of
the information in the news reports. In part, these contacts were not initiated to
expedite the delivery of this information to Congress. To the extent known, however,
the data collected for this report reflects much of the information disseminated thus
far. A database search conducted by CRS revealed that no documents other than
those cited in this report have been published by federal agencies on the lessons
learned or experiences associated with the implementation of federal policies in the
The sources consulted in the preparation of this report also reflect the limitations
and caveats associated with the passage of time. While some of the consequence
management issues surrounding the attacks of September 11 in New York City may
have been somewhat or even fully resolved (such as the clearance of debris, certain
financial assistance needs, and eligibility determinations), others appear, or are
U.S. Environmental Protection Agency, Lessons Learned in the Aftermath of September
11, 2001 (Washington: GPO, 2002).
Brian Jackson and others, Protecting Emergency Responders—Lessons Learned from
Terrorist Attacks, (Arlington, VA: RAND, Science and Technology Policy Institute, 2001).
American Association of Blood Banks, Interorganizational Task Force on Domestic
Disasters and Acts of Terrorism, Report and Recommendations, at:
[http://www.aabb.org/Pressroom/In_the_News/idfddat013002.htm], visited June 14, 2002.
Joint Commission on Accreditation of Healthcare Organizations, “Mobilizing America’s
Health Care Reservoir,” Joint Commission Perspectives, Dec. 2001, at:
visited June 14, 2002.
As noted previously, this report is expected to be updated and expanded by CRS. Newly
available information and analysis pertinent to the report will be considered in preparation
of the update.
reported to be, in flux.15 The 12 issues in this report have been identified through
reviews of secondary sources, notably news reports, that discuss problems
encountered by individuals, organizations, and government agencies after September
11. Events and decisions have changed rapidly at times, and some of the information
and sources referenced in this report may have become moot or superseded through
discussions involving federal and non-federal officials.
Threat Assessments. The second limitation or caution concerns the
references in this report to future terrorist attacks. Such references should not be
construed to reflect any assumed probability that attacks will occur. Risk or threat
assessment, or the application of risk management and assessment methodologies to
the terrorist threat, is an analytical field still in development.16 While this study
assumes that future terrorist attacks, possibly even more devastating than those of
September 11, could occur, the authors have no basis for assessing the likelihood that
they will occur.
Scope of Report. The third limitation concerns the breadth of issues included
in the report. Some are relatively discrete and identifiable issues—notably the
eligibility of certain organizations for grant-in-aid assistance, the collection of data
on federal costs, and reimbursement of non-federal units of government for securityalert costs. Other issues—such as environmental and public health consequences,
coordination of recovery assistance, and aid to education systems—involve broader
policy issues that are only partially addressed in this report. In addition, some
consequence management issues that have been raised in press reports and other
sources are not addressed at all by this report, including victim compensation, mental
health counseling needs outside the school systems, and financial aid for certain
Perhaps the most significant limitation concerns the question of the overall
intent of federal consequence management policy. The issues addressed in this report
relate to possible modifications of existing policies but do not address options related
to a complete revision of federal policy objectives. More fundamental policy
questions might be phrased as follows: Should federal disaster assistance always be
provided after an attack? Should Congress consider factors—such as competing
budget priorities (e.g., funding for the armed forces to fight the war, continuity of
government, or urgent domestic social policy or civilian protection needs), the extent
to which a community has been contaminated, or the degree to which certain areas
has been or might be repeatedly struck by terrorists—in determining when, where,
and how much consequence management assistance is to be provided?
This report primarily focuses on the attack in New York City because the problems and
questions that have been reported in New York City pose particularly complex policy
questions and provide an indication of the possible impact of future attacks in metropolitan
areas. This focus should not be seen to reflect on the tragedy and impact of the attack on
the Pentagon, the airliner crash in Pennsylvania, and the anthrax mailings.
Refer to: U.S. General Accounting Office, A Risk Assessment Approach Can Guide
Preparedness Efforts, testimony of Raymond J. Decker, GAO-02-208T (Washington: Oct.
Historically, federal disaster assistance policy is intended to facilitate the
rebuilding, recovery, and reoccupation of areas destroyed by hurricanes, floods,
earthquakes, fires, or other events that occur for relatively brief time periods and do
not generally recur.17 The destruction associated with terrorist attacks, however,
could span longer periods of time, result in the contamination of residential or
commercial neighborhoods with toxic or radiological substances, and require
considerable investments of federal and non-federal resources. The Administration’s
proposal for the establishment of a Department of Homeland Security addresses this
issue to some degree, as follows:
We cannot assume that we can prevent all acts of terror and therefore must also
prepare to minimize the damage and recover from attacks that do occur....The
consequences of a terrorist attack are wide-ranging and can include: loss of life
and health, destruction of families, fear and panic, loss of confidence in
government, destruction of property, and disruption of commerce and financial
markets. The Department would lead federal efforts to promote recovery from
terrorist attacks and natural disasters. The Department would maintain FEMA’s
procedures for aiding recovery from natural and terrorist disasters.18
The complex and problematic issue of whether federal consequence management
policy should provide for options other than rebuilding, recovery, and reoccupation
is not addressed in this report, but may be considered in an update.
Some of the issues addressed in this report share certain features or reflect
common attributes. In addition to evaluating policy options on the specific issues,
Congress may decide to consider some broader policy concerns such as the
Grants or Loans? Those affected by disasters (individuals, private business
operators, and public officials) primarily seek federal financial assistance through
grants-in-aid instead of loans. Many managers of businesses or government entities
facing revenue loss because of the attacks (or any disaster) may find it difficult to
repay a loan, regardless of the interest rate charged. For example, as reported months
after the attack in New York, one group of small business owners was bused to
Washington “to lobby members of Congress for immediate relief and tell them they
need grants, not loans, to survive.”19 Accordingly, an overarching concern applicable
to many of the issues addressed in this report may be whether the current balance
between grants and loans is appropriate. For example, in the section that discusses
local government revenue loss, the option of creating a new grant program is
One exception is the issue of repetitive loss due to flooding, as explored in: National
Wildlife Federation, Higher Ground (Washington: 1998). Some have advocated a reduction
or limitation in federal assistance for properties subject to frequent flooding.
U.S. President (Bush), The Department of Homeland Security (Washington: June 2002),
Terry Pristin, “Desperate Trip to Lobby for Grants, not Loans,” The New York Times, Nov.
4, 2001, p. B9.
included as it represents a policy option previously adopted by Congress but modified
in 1974. Congress could decide to revisit its earlier decision to authorize loans and
Non-Federal Resources. The resources, efforts, and authority of nonfederal entities has a bearing on federal policy. State laws (and, in some cases, local
ordinances), insurance policies provided through the private sector, voluntary
association resources, and individual assets have all been used or sought to help
communities recover from the September 11 attacks. This report does not provide
many details on the role of non-federal organizations and the assistance they provide.
Non-federal entities have a long tradition of being involved in response and recovery
activities after disasters, and the provision or dearth of federal assistance can have a
considerable impact on the role of such organizations as well as the efforts of
individuals and families.
Some information has previously been compiled on the combination of federal
and non-federal assistance provided after an attack or other catastrophe.20 State and
local governments have historically provided considerable financial assistance to
victims of disasters, a practice continued after the September attacks.21 Insurance
companies continue to assess the extent of damages and their costs, estimated by
some to exceed $40 to $70 billion.22 One estimate, prepared by the New York City
Partnership and considered by the General Accounting Office (GAO) to include the
“most comprehensive estimates,” found that total damages in New York City from
the attacks resulted in losses of approximately $83 billion, $67 billion of which
“would most likely be covered by insurance, federal payments, or increased
Voluntary associations have also provided assistance to individuals and to
families. For example, the Liberty Disaster Fund administered by the American Red
Cross has provided roughly $560 million to meet needs of victims.24 Other
organizations provided assistance as well. Some of the issues raised in this report
One such compilation is: U.S. Congress, Senate Bipartisan Task Force on Funding Disaster
Relief, Federal Disaster Assistance, S. Doc. 104-4, 104th Cong., 1st sess. (Washington: GPO,
For a discussion of non-federal funding for emergencies and the terrorist attacks see:
Intergovernmental Financing of Emergency Management, by Steven Maguire, at:
[http://www.congress.gov/brbk/html]/ebter212.html], visited April 17, 2002.
For a discussion of insurance coverage and policy issues see: Insurance Industry Response
to Terrorist Attacks, by Rawle King, at:
[http://www.congress.gov/brbk/html]/ebter139.html], visited April 17, 2002.
U.S. General Accounting Office, Review of Studies of the Economic Impact of the
September 11, 2001, Terrorist Attacks on the World Trade Center, GAO-02-700R
(Washington: May 29, 2002), p. 2.
For information see: “News Release: American Red Cross and Former Senate Majority
Leader George Mitchell Unveil Plan Providing $360 Million in Additional Assistance to
9/11 Families,” at: [http://www.redcross.org/press/disaster/ds_pr/020130libertyfund.html],
visited April 17, 2002.
are, to some extent, addressed by non-federal entities or agreements, but this report
does not contain information on that assistance. In addition, an issue related to
assistance provided by voluntary and non-profit charitable organizations is not
addressed in this report—the effect of federal aid on the funding and operations of
such entities. Controversies associated with the distribution of funds received by
charities after September 11, discussions about the equity of financial assistance
awards, and the intent of federal law that prohibits duplication of assistance all have
a bearing on the respective roles of agencies in assisting victims and their families.
The Federal Role. The boundaries between federal and state responsibilities
might be examined in light of the attacks of September 11. One of the long-standing
principles of federal disaster assistance policies has been that federal aid should
supplement, not supplant, non-federal efforts. The record-level amounts of
assistance appropriated in P.L. 107-38 and P.L. 107-117, the assistance provided to
the airline industry in P.L. 107-42, the unemployment assistance extended in P.L.
107-147, and other actions taken by the 107th Congress and the Bush Administration
in the aftermath of the attacks might have established precedent for an expanded
federal role in consequence management after terrorist attacks. Some critics,
however, have argued that in certain areas the federal government has provided less
assistance, or insufficient aid, in comparison to that given after past disasters, leaving
the states to absorb the costs.
For some, an expanded federal role is justified because the attacks constituted
an act of war involving international terrorism. Accordingly, they contend, the federal
government has broad responsibility to provide assistance. The performance of
federal officials in processing and using intelligence data on potential threats, they
argue, led at least in part to the disaster. As reportedly asserted by one city
councilman in New York City, “It was the federal government that failed in its
responsibility to protect New York, and it’s the federal government that needs to pay
to make us whole.”25
The responsibility of the federal government is not easily settled. Precedent
arguably exists for the federal government to provide compensation for victims of
disasters caused, or aggravated by, federal officials. Congress has in the past
provided assistance, or authority to settle claims against the federal government, after
the culpability of the federal government in the consequence from certain disasters
was established, or action or inaction by federal employees exacerbated conditions.
Such disasters include the following:
! explosions and fire in Texas City, Texas, in 1947;26
! quality of federal inspections and design requirements that reportedly
contributed to the failure in Idaho of the Teton dam in 1976;27
Frank Lombardi, “Kelly Backed by Council in OT Aid Bid,” New York Daily News, March
19, 2002, p. 9.
P.L. -378, 69 Stat. 707.
P.L. 94-355, 90 Stat. 889; P.L. 94-400, 90 Stat. 1211; P.L. 94-438, 90 Stat. 1415; P.L. 95(continued...)
! fires in Yellowstone National Park and National Forests “which were
originally classified as prescribed fires but subsequently became wildfires” in
! the spread of a fire in New Mexico in 2000.29
Some might argue that the federal government is responsible for stopping
terrorist attacks before they occur, and therefore should be held responsible for costs
incurred if such efforts fail. Others might contend that liability was established in
most of the above examples because the disasters were the direct result of federal
actions, not of federal failure to stop the actions of other parties.
Debate on the budget for FY2003 and on the role of the federal government in
consequence management will continue in the shadow of threats of other terrorist
attacks in the United States. Congress might elect to establish boundaries for the role
of the federal government, acting from one or more of several perspectives—for
example, financial concerns and limitations (the budget will set the “bottom line”),
the balance of powers between the federal and state governments envisioned by the
creators of our federalist system, the role of the private and voluntary sectors, or the
needs of victims and stricken communities on a case-by-case basis (each terrorist
attack is different).
With regard to the last perspective, Congress might elect to shape federal
consequence management policies on the premise that each attack creates unique
needs that require congressional consideration, debate, and action. (This perspective
was arguably adopted in the aftermath of the September attacks when Congress
enacted a series of statutes that addressed liability and economic assistance or civilian
protection issues.) If this perspective is taken by Congress following any future
terrorist attacks, precedents in the development of consequence management policies
will exist. Traditionally, the types and amounts of assistance provided after one
disaster have been sought after succeeding catastrophes. This is not a new
development. The impact of precedents for federal assistance has always been
present in congressional debate on disaster relief and the federal role in consequence
management. This role may be seen in questions raised nowadays by citizens and
Members of Congress ( “They received this aid after the hurricane last year, why
aren’t we receiving it this year?”) as well as in reports of discussions that took place
in Congress over 200 years ago:
Mr. W. Smith said he wished to lay a resolution on the table. It was well known
that the city of Savannah, in Georgia, had suffered in the most alarming manner,
by that greatest of all calamities, fire, so that four-fifths of the whole town was
629, 92 Stat. 3635. For background on the disaster see: U.S. Congress, Senate Committee
on Energy and Natural Resources, Subcommittee on Energy Research and Development,
Oversight—Teton Dam Disaster, hearings, 95th Cong., 1st sess., Jan. 24, Feb. 21, 1977
(Washington: GPO, 1977).
P.L. 101-302, 104 Stat. 230-231.
P.L. 106-246, 114 Stat. 583-590.
reduced to ashes. He was desirous that some relief should be afforded to the
unhappy sufferers from the Treasury of the United States....Mr. Cooper said, it
was a very unpleasant thing to come forward to oppose a measure of this sort;
but, when they looked into different parts of the Union, and saw the losses which
had been sustained at New York, Charleston, etc., it would appear only
reasonable that, if relief was afforded in one case, it ought to be extended to
another; and, if this resolution were agreed to, he should certainly move to have
some relief afforded to New York.30
Presidential Discretion. As is the case with many significant policy issues,
Congress, in addressing any of the consequence management issues reviewed in this
report, will, directly or indirectly, confront the boundaries of the extent to which the
President is granted discretion. The decision to issue a major disaster or emergency
declaration, the determination of eligibility, and the type and amount of assistance to
be provided may be rigidly established by Congress or left, to some degree, to the
President or executive branch officials.
The extent of discretion granted to the executive branch touches many of the
issues discussed in this report. As explained in some of these issue sections, some
news reports indicate that certain decisions made by FEMA, EPA, and other officials
after September 11 appeared arbitrary or inconsistent with federal policies. As a
result of these concerns, Congress might reevaluate the degree of discretion that is
appropriate. Some options Congress might choose to consider include:
! in lieu of a presidential major disaster declaration, declare by statute that
when terrorist attacks result in specified levels of damages, or when terrorists
use a specified means of attack (such as a radiological dispersion device), such
incidents constitute a major disaster;
! authorize certain agency heads to provide assistance to communities that
suffer losses involving a certain percentage of the tax base, particularly if
exposure to a chemical or biological weapon forces local government officials
to close off a business district for years;
! specify that interagency commissions be established, a certain number of
meetings occur, or existing plans be integrated to ensure that interagency
coordination and communication improves.
These and other options related to increasing response efficiency and effectiveness
may be raised in the debate over the proposal of the Bush Administration to establish
a Department of Homeland Security.
“Relief to Savannah,” The Debates and Proceedings in the Congress of the United States,
4th Cong., 2nd sess., vol. 6, Dec. 26, 1796, p. 1695, 1712. See also an account of a similar
debate that reportedly took place in 1827 that involved Representative Davy Crockett in:
Rep. Ron Paul, remarks in the House, Congressional Record, 98th Cong., 1st sess., vol. 129,
This report makes no judgement on the need for any particular change. It
compiles information on difficulties, problems, or weaknesses cited in the media or
identified by governmental agencies. There is no question that much has been
accomplished with federal assistance in responding to the tragedies of September 11
and beginning the recovery process. It also is clear that some questions have been
raised that arguably bear further consideration.
One overriding question facing Congress is whether the range of existing federal
policies—many, but not all of which are discussed in this report—is appropriate for
consequence management purposes if a terrorist attack even more devastating than
that of September 11 were to occur. The Stafford Act, and other authorities that have
guided federal officials since September, have been used for years to manage the
consequences of hurricanes, floods, earthquakes, and some terrorist explosions.
However, scenario builders have, for years, posited that the release of a
chemical weapon, an outbreak of smallpox or other disease, or the explosion of a
nuclear device could wreak havoc and severely disrupt, if not destroy, urban centers.
To a certain extent, the horrifying events of September 11 are more similar to other
disasters in that they were caused by and associated with explosions. Chemical,
biological, radiological, and nuclear weapons, if used by terrorists, would pose
different and differently disruptive dangers. Congress might elect to evaluate the
need for alternative federal policies should future consequences of terrorist attacks
be more difficult to manage.
Definition of “Major Disaster” and “Emergency”31
Issue Summary. The Robert T. Stafford Disaster Relief and Emergency
Assistance Act (the Stafford Act) authorizes the President to issue a “major disaster”
declaration only when catastrophes have occurred due to such natural events as
floods, hurricanes, and earthquakes or, “regardless of cause, any fire, flood, or
explosion.”32 The Act grants the President greater latitude to issue an “emergency”
declaration for “any occasion or instance” in which the President determines federal
aid is required.33
Certain terrorist actions could devastate communities, yet not result in a major
disaster declaration because the event causing the destruction does not meet the
statutory definition of “major disaster.” While such events might well lead to an
emergency declaration, the authorized assistance might not be sufficient to meet a
community’s needs. Congress might choose to consider legislation that would
initiate federal assistance after terrorist actions, regardless of the means of attack.
Issue Analysis. Presidential designation of a catastrophe as a “major
disaster” might be a critical factor in the restoration of a community’s economy after
a terrorist attack.34 Terrorist attacks that do not result in either a major disaster or an
emergency declaration might result in the departure of businesses and the
deterioration of services in a community, due to the inability of the state or local
government to facilitate full recovery.
A Stafford Act major disaster declaration makes available the full range of
federal disaster relief assistance to stricken counties and cities. Some types of
assistance available under a major disaster declaration include the repair,
replacement, or reconstruction of public and nonprofit facilities, cash grants for
personal needs of victims, temporary housing vouchers or replacement
accommodations, and unemployment assistance related to the disaster.35
Considerably less federal assistance is authorized under an emergency
declaration. The Stafford Act imposes a limit of $5 million in assistance for each
Written by Keith Bea, Government and Finance Division.
42 U.S.C. 5122(2)
42 U.S.C. 5122(1)
Research on economic assistance for recovery is available in a number of sources,
including: Richard Vogel, “The Impact of Natural Disaster on Urban Economic Structure,”
Review of Radical Political Economics, vol. 30, Summer 1998, pp. 114-22; Roger G. Noll,
“The Complex Politics of Catastrophe Economics,” Journal of Risk and Uncertainty, vol.
12, May 1996, pp. 141-46.
For more information on the assistance available under the Stafford Act see:
[http://www.fema.gov/r-n-r/], visited Feb. 14, 2002.
emergency declaration.36 The assistance authorized under an emergency declaration
— emergency response aid, debris removal, and financial assistance to households
and individuals — could leave some unmet needs in attacked communities.
Application to Terrorist Attacks. The individuals and communities
affected by the terrorist attacks of September 11 in New York City and Virginia have
been eligible to receive the full range of major disaster assistance authorized in the
Stafford Act, as well as that available under other authorities.37 In the future, other
states might not be eligible for such declarations because of the form of the attack.
Terrorists can strike by using technology or weapons of mass destruction (WMD)
that do not result in fires, floods, or explosions.38 The following examples of other
types of attacks probably would not fit the Stafford Act definition of causal events
for a major disaster declaration, but might lead to considerable loss of life or
! A cyber-attack on computer systems in a community could result in a shut-
down of utilities, the loss of millions of dollars due to lost wages, spoiled
food, and traffic jams, and possibly the loss of life if emergency response
personnel were unable to provide life saving services.40
! The contamination of a water system or supply of food with nuclear, chemical,
or biological agents might result in illness or death of consumers and
emergency and response personnel.41
42 U.S.C. 5193. However, the President may exceed this limitation and must then report
to Congress on the extenuating circumstances and the need for legislation on the matter.
The types of assistance provided after a disaster depend on the needs of stricken
communities. Brief information on other federal authorities is provided in: CRS Report
RS20739, Federal Disaster Relief Programs: Brief Summaries, by Keith Bea. More detail
is available in: U.S. Federal Emergency Management Agency, Disaster Assistance: A Guide
to Recovery Programs, FEMA 229(4) (Washington: 1995).
A WMD has been defined as “any weapon or device that is intended, or has the capability,
to cause death or serious bodily injury to a significant number of people through the release,
dissemination, or impact of (A) toxic or poisonous chemicals or their precursors; (B) a
disease organism; or (C) radiation or radioactivity.” See 50 U.S.C. 2302.
For information, including scenarios, on potential terrorist attacks that might not result in
a Stafford Act declaration, see: Harry C. Vantine, Ph.D., “Threats Posed by Nuclear Devices
and Radiological Dispersal Devices,” and “Statement of Dr. Steven E. Koonin on
Radiological Terrorism,” testimony before U.S. Congress, Senate Foreign Relations
Committee, 107th Cong. 2nd sess., March 6, 2002 [unpublished]. For a list of witnesses see:
[http://foreign.senate.gov/hearings/hrg020306a.html], visited June 5, 2002.
“Among the scenarios often talked about are terrorists sabotaging air traffic control
systems and thereby causing plane crashes; sabotaging electric power systems and thereby
causing power blackouts; penetrating government databases; or sending computer viruses
around that world that cause disruption or even collapse of international financial and
banking systems.” Jeffrey D. Simon, The Terrorist Trap (Bloomington, IN: Indiana
University Press, 2001), p. xxiii.
“Nuclear material of no real quality, even power plant waste, could be placed in a major
! A small arms attack not involving explosives could close down a metropolitan
area for days and disrupt commerce.42
! The dispersion (not through an explosion) of radioactive or other
contaminants might require the destruction and abandonment of certain
buildings in a neighborhood or possibly parts of, if not an entire, city.43
! Terrorists might create costly disruptions by dispersing hazardous substances
through use of a civilian aircraft or surface transportation vehicles.44
Background. Over the past five decades, Congress has revised the definition
of the term “major disaster” through amendments to the disaster relief authorities that
preceded the Stafford Act. Since 1974, the term “emergency” has been revised.
Table 1, below, summarizes the evolution of both of these terms.
air conditioning or water system. There are past cases of terror groups contemplating or
attempting such actions in the United States.” Christopher C. Harmon, Terrorism Today
(London, Frank Cass Publishers, 2000), p. 171.
“The most pressing current threat is that of the individual or small group with simple
automatic weapons [emphasis in original].” Terrorism Today, p. 160.
The Chemical and Biological National Security Program of the Department of Energy is
preparing a computer model to simulate “chemical and biological releases within the
complex urban environment.” See: [http://www.lanl.gov/orgs/d/d4/aquality/chbio.html],
visited May 30, 2002. See also: Bill Keller, “Nuclear Nightmares,” The New York Times
Magazine, May 26, 2002; Marvin J. Cetron with Owen Davies, “The Future Face of
Terrorism,” The Futurist, vol. 28, Nov.-Dec., 1994, pp. 10-15.
Such an attack, while fearsome to contemplate, poses considerable difficulties for the
perpetrators. As summarized by one group that analyzes homeland security issues: “It is
unlikely that a terrorist group could, on its own, construct a nuclear weapon. However,
terrorist groups might try to steal or buy nuclear weapons or nuclear material from nations
where weapons and materials are available to such groups or poorly guarded. Although an
RDD [radiological dispersion device] would not likely cause a high number of casualties,
it would likely cause economic damage, necessitate the destruction of some contaminated
structures, and spread psychological fear. To counter the threat, the US has installed nuclear
sensors at ports and other sensitive areas, and is part of a global effort to create systems to
better track radioactive materials.” See: “Padilla Wanted to Build a Nuclear Bomb,”
Homeland Security Monitor, an email subscription service of Intellibridge, June 17, 2002.
“The fatalities from a successful biological agents attack—release of anthrax spores over
populated areas either from a low-flying airplane or a spray can, dissemination of various
agents into food supplies, release of botulinal toxin—could be tenfold what we have seen
in <conventional’ terrorism.” The Terrorist Trap, p. 359.
Table 1. Statutory Definitions of “Major Disaster”
Title of statute/P.L.
Major disaster definition
“To make surplus property
available for the
alleviation of damage
caused by flood or other
catastrophe,” (1947) [P.L.
Not defined, but see note a
“To authorize federal
assistance to states and
local governments in
major disasters, and for
other purposes,” (1950)
“Major disaster” means
any flood, drought, fire,
storm, or other catastrophe
... 64 Stat. 1109
“Disaster Relief Act of
1966,” P.L. 89-796
“The term <major disaster’
means a major disaster as
determined by the
to...[P.L. 81-875]. 80 Stat.
“Disaster Relief Act of
1969,” P.L. 91-79
“The term <major disaster’
means a major disaster as
determined by the
to...[P.L. 81-875]. 83 Stat.
“Disaster Relief Act of
1970,” P.L. 91-606
“Major disaster” means
any hurricane, tornado,
storm, flood, high water,
wind-driven water, tidal
wave, earthquake, drought,
fire, or other catastrophe
.... 84 Stat. 1745
“Disaster Relief Act of
1974,” P.L. 93-288
see note b
“Major disaster” means
any hurricane, tornado,
storm, flood, high water,
wind-driven water, tidal
drought, fire, explosion, or
other catastrophe ... 88
“Emergency” means any
hurricane, tornado, storm,
flood, high water, winddriven water, tidal wave,
snowstorm, drought, fire,
explosion, or other
catastrophe .... 88 Stat.
Title of statute/P.L.
Major disaster definition
“The Disaster Relief and
Amendments of 1988,”
“Major disaster” means
any natural catastrophe
(including any hurricane,
tornado, storm, high water,
winddriven water, tidal
mudslide, snowstorm, or
drought), or, regardless of
cause, any fire, flood, or
explosion .... 102 Stat.
“Emergency” means any
occasion or instance for
which, in the
determination of the
assistance is needed to
supplement state and local
efforts .... 102 Stat. 4689
The 1947 legislation that authorized the President to exercise discretion in determining when federal
disaster assistance would be needed did not use the term “major disaster.” The relevant provision
read: “That, notwithstanding any other provisions of law, the War Assets Administration shall,
whenever the President shall determine it to be necessary or appropriate because of flood or other
catastrophe, transfer, without reimbursement ... such articles of personal property ... which ... can be
utilized in alleviating ...” 61 Stat. 422
The types of catastrophes listed in both definitions in the 1974 Act were identical. The difference
rested in the authority of the President to determine whether the event caused “damage of sufficient
severity and magnitude to warrant major disaster assistance under this Act, above and beyond
emergency services by the federal government ... for a major disaster...” or whether it required “federal
emergency assistance to supplement state and local efforts ... for an emergency declaration.”
Congress might choose to continue to debate or revise the definition of these
terms in the context of questions such as the following:
! Should a distinction be drawn between “disasters” and national security events
such as terrorist attacks, which may be considered acts of war?
! Should “natural” disasters be the main triggers for a Stafford Act declaration?
If not, what are the limits to a President’s discretion to issue such a
! Should widespread diseases, economic disruptions (regardless of cause),
utility outages, bombings, or arson be eligible for assistance under the Stafford
Questions similar to these have been raised before. In the past, often after
particularly significant disasters have occurred or plans and studies have been
released, Congress has debated options that either specify the types of events that
might trigger Stafford Act assistance or that grant discretion to the President.45 Most
Information on the linkages among emergency management policy developments and
events, organizational changes, technological disasters, reports, and other elements are
presented in two time lines: Disaster Time Line: Selected Milestone Events & U.S.
of the declared disasters to date have been classified as natural, not technological or
There have been occasions in the past when Members of Congress have
questioned presidential disaster declaration decisions. In 1980, for example,
President Carter used the emergency authority enacted in the Disaster Relief Act of
1974 to help South Florida cope with the influx of Cuban migrants from the Mariel
boat lift. In disagreement, the Senate considered legislation (S. 3027, 96th Congress)
to insert the words “physical or natural” in the definitions of “major disaster” and
“emergency.” The report accompanying the legislation included the following
summary of the issue:
From discussion between Administration officials and Committee members it
became clear that a tendency was developing within the Administration to
consider, almost exclusively, effects of circumstances in determining the
appropriateness of federal response under the Act, rather than weighing as well
the nature of the circumstances which led to the disruption. On May 6, 1980, the
President declared an emergency for the state of Florida, using the authority of
the Act. All appreciated the severe impact the extraordinary numbers of refugees
had upon that state and upon the local municipalities of south Florida. Clearly,
the burdens surpassed their capabilities, requiring some form of federal
assistance in response to a national problem. However, Congress has historically
intended the Disaster Relief Act to provide an extensive but fixed range of
responses to particular kinds of events spelled out in the definitions provisions
of the Act.47
President Carter noted in a media interview that he “probably stretched the law
a little bit in allotting emergency funds...to alleviate the problem financially in Dade
County and other affected areas.”48
In an attempt to resolve this difference over statutory intent, the Senate approved
S. 3027, which redefined the terms “major disaster” and “emergency” to include the
words “other physical or natural catastrophe.” During debate on the Senate floor one
Senator expressed agreement with the new language while addressing the issue of the
Outcomes and Terrorism Time Line: Selected Milestone Events & U.S. Outcomes, at:
[http://www.disaster-timeline.com/http://www.disaster-timeline.com/], visited June 10,
A presentation of the distribution of declared disasters from 1965 to 1998 throughout the
United States is available. The graph does not include raw data on the number of disasters
within specified categories, but the great majority of disasters are attributable to “natural”
events (in rank order) such as floods, severe storms, tornadoes and floods, and hurricanes.
See: [http://www.bakerprojects.com/fema/mapmain.htm], visited March 27, 2002.
U.S. Congress, Senate Committee on Environment and Public Works, Disaster Relief Act
Amendments of 1980, report to accompany S. 3027, 96th Cong., 2nd sess., S. Rept. 96-891
(Washington: GPO, 1980), pp. 1-2.
U.S. President (Carter), “Interview with a Correspondent from the Florida News Network,”
Public Papers of the Presidents of the United States, Jimmy Carter, 1980-81, book III, Oct.
10, 1980, p. 2155.
scope of the Act, and questioned whether “the Disaster Relief Act [is] the appropriate
legislative vehicle to provide financial remedies” for costs associated with hazardous
waste dumps?49 The Senator did not receive an answer during the debate in the
Senate, and the House did not act on the legislation.
In Congress, the debate over the definition section of the 1974 Act continued.
In 1981, Senators considered the issue on at least two occasions, neither of which
involved legislation to amend the Disaster Relief Act. One instance involved debate
on reauthorization of a defense procurement statute and a proposed amendment
concerning the use of civil defense funds to prepare for disasters as well as enemy
attack, a concept referred to as “dual-use.”50 During discussion on the floor of the
Senate of an amendment to the Civil Defense Act of 1950, one Senator addressed a
dual-use proposal that would “allow states to expend those funds for certain disaster
assistance as well as civil defense purposes.”51 The amendment to the Civil Defense
Act incorporated the term “natural disaster” and, for the purpose of the Civil Defense
Act, defined it to include explosions, civil disturbances, or “any other manmade
catastrophe.”52 The Senator acknowledged that the dual-use provision “may have
much to commend it,” but noted concerns and questions such as the application of
standards in determining which events qualify as major disasters, confusion or
uncertainty over the use of similar terms, and the discretion granted the President, as
Would the President interpret this language to mean that Congress now intended
to broaden the basic law so that he could declare a major disaster for a civilian
riot or for a collision between two jumbo jets killing hundreds of people?53
Congress approved the dual-use provision and incorporated it into the Civil Defense
The second instance in which the issue was raised in 1981 was during Senate
consideration of the nomination of a FEMA official to be an associate director. One
Senator expressed concern about the nominee’s perception that the disaster relief
statute did “not appear to be limited to natural or physical occurrences.”55 Despite
Statement of Sen. Edward Zorinsky, “Disaster Relief Act Amendments of 1980,”
Congressional Record, vol. 126, Sept. 26, 1980, p. 27663.
The first congressional action on the dual use issue included a statement of congressional
policy recognizing that civil defense funds could be used for disaster preparedness “without
adversely affecting” civil defense objectives. 90 Stat. 931-32.
S. 815, 97th Congress. See: Sen. Robert Stafford, “Department of Defense Authorizations,
1982—Conference Report,” Congressional Record, vol. 127, Nov. 5, 1981, pp. 26841-42.
P.L. 97-86, 95 Stat. 1112, 50 App. 2252(b).
Sen. Robert Stafford, “Department of Defense Authorizations, 1982—Conference
Report,” p. 26842.
Sec. 803, P.L. 97-86, 95 Stat 1099 et seq.
Sen. Frank Murkowski, “Federal Emergency Management Agency,” Congressional
Record, vol. 127, Oct. 6, 1981, p. 23293.
this objection to the nominee’s position (but apparently not to the nominee himself)
the nominee was confirmed.
Two years after President Carter’s decision on the Mariel boat lift, the debate
apparently continued in the new Administration. An opinion issued by the
Department of Justice during the Administration of President Ronald Reagan
concluded that little stretching, if any, occurred. In a memorandum issued for thenAssociate Attorney General Rudolph Giuliani, the Justice Department concluded that
the 1974 statute “covers emergencies arising from both man-made and natural
disasters” and set out “touchstones” of an emergency as:
We believe that the Act was meant to encompass catastrophic events—either
impending or actual—that threaten property and the lives of people. In the
absence of specific facts, we are unable to say with certainty whether a particular
“immigration emergency” would constitute such a catastrophic event. Similarly,
we are unable to say that the Act could never apply....We have not found
anything, either in the Act, its legislative history or administrative practice under
it, that would disqualify an emergency or major disaster merely because it
involved a massive influx of aliens into the country...Not every immigration
emergency will necessarily be an emergency or major disaster under the
Act—the President must make separate determinations for each. We do not
believe, however, that there is anything in the Act to preclude him from using the
Act if he did determine that the requisite need and suffering existed.56
The Department of Justice memorandum also noted that, despite its view of the
authority, a lack of unanimity existed within the Reagan Administration. “FEMA has
taken the position that use of the Act for an immigration emergency is
The definition issue subsequently remained dormant for over a decade. In 1994,
with little debate or contention, the issue was addressed to a limited degree when the
Civil Defense Act of 1950 was amended and incorporated as Title VI of the Stafford
Act. Title VI, as amended, includes in the definition of “hazard” the term “natural
disaster” as well as “an accidental or man-caused event.”58 This amendment has no
bearing on the definition of a “major disaster,” however, as the definitions for Title
VI apply only to preparedness assistance authority and not to the federal disaster
assistance provisions in Titles IV and V of the Stafford Act.
Policy Options. Congress might choose to renew debate over the specificity
of definitions in the Stafford Act for a “major disaster” or “emergency.” A range of
policy options might be considered regarding the specification of the types of events
that lead to the commitment of federal resources after a terrorist attack.
Larry L. Simms, Office of Legal Counsel, Memorandum for Rudolph W. Giuliani,
Associate Attorney General, U.S. Department of Justice (Washington: Nov. 19, 1982), p.
Ibid, p. 9.
42 U.S.C. 5195a.
Maintain the Status Quo. Congress could elect to retain the existing
Stafford Act provisions. Should a terrorist attack occur that cannot be addressed
under the Stafford Act’s definition of “major disaster,” other authorities in addition
to the Stafford Act could be considered to be sufficient. For one, the National
Emergencies Act authorizes the President to declare a “national emergency” (a
condition the President determines to exist) and to call into operational status standby
provisions of statutory law, based on the needs of the situation, giving the President
special powers to meet the needs of the emergency.59 When declaring a national
emergency, the President specifies which provisions of the standby canon he is
activating. Using a proclamation or an executive order, the declarations are
published in the Federal Register. The President must maintain files and an index of
such executive orders and proclamations, and must transmit reports to Congress on
expenditures incurred as a result of the exercise of this authority.60 By joint
resolution, Congress may terminate a declaration of national emergency.61
Following the September 11 terrorist attacks, President George W. Bush used
the authority under the National Emergencies Act to meet certain needs. The
President issued two national emergency declarations, the first, issued September 14,
2001,62 called armed forces reserves into active duty and invoked authorities
concerning the retention and assignment of military personnel. The second, issued
September 23, 2001,63 invoked the International Emergency Economic Powers Act
mandating the freezing of certain foreign assets in American financial institutions.
In addition to the National Emergencies and Stafford Acts, the President has
authority to respond to a release of hazardous substances under the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) of 1980.64
Through the process set out in the National Oil and Hazardous Substances Pollution
Contingency Plan (“National Contingency Plan,” or NCP), federal response efforts
could be activated should a terrorist attack result in the discharge of “hazardous
substances, pollutants, and contaminants.” CERCLA authorizes the President to use
the NCP for remedial action “or take any other response measure consistent with the
national contingency plan which the President deems necessary to protect the public
health or welfare or the environment.”65
50 U.S.C. 1621. Harold Relyea of the Government and Finance Division contributed the
discussion of the National Emergencies Act.
50 U.S.C. 1641
50 U.S.C. 1622
U.S. President (George W. Bush), “Declaration of National Emergency by Reason of
Certain Terrorist Attacks,” Proclamation 7463, Federal Register, vol. 66, Sept. 14, 2001,
U.S. President (George W. Bush), “Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism,” E.O. 13224, Federal
Register, vol. 66, Sept. 25, 2001, p. 49079-81.
42 U.S.C. 9601 et seq. CERCLA is discussed in the section “Environmental Hazard
Assessment and Communication” in this report.
“Any person in charge of a vessel or an offshore or an onshore facility shall, as soon as he
Pro. Advocates of maintaining the status quo might contend that sufficient
authority exists to initiate federal assistance under the range of authorities set out in
the Stafford Act, the National Emergencies Act, CERCLA, and, to a limited extent,
other statutes such as the Small Business Administration (SBA) disaster loan
legislation.66 It might be argued that, in light of the definitions and the discretion
granted under these authorities, the President and specified executive officials could
direct federal assistance to communities affected by terrorist attacks without
additional legislative action (other than appropriations).
Con. Some may argue that, while the definitions in existing policies provide
authority for presidential action, the President needs clearer statutory authority to
respond to terrorist actions in order to direct specific types of assistance to victims
and to manage the crisis. In addition to directing the war effort and meeting other
urgent needs, it might be argued that potential legal challenges to executive branch
decisions regarding consequence management should be minimized or prevented.
From this perspective, congressional action on new legislation could enable
executive branch officials to develop implementation plans and procedures well in
advance of an attack. Some might consider the authority granted the President or
executive branch officials under existing statutes to be too limited to provide the
necessary assistance that could be required.
Increase Discretion of the President. The definition of “major disaster”
in the Stafford Act could be amended to expand the language pertaining to nonnatural disasters (“regardless of cause, any fire, flood or explosion”) to other events.
This could be accomplished, for example, by returning to the definition enacted in
1974 (see Table 1) and reinserting the phrase “or other catastrophe.” Also, the statute
could be amended to apply the definition of “hazard” in Title VI of the Stafford Act
to Titles IV and V (major disaster and emergency assistance, respectively).67 Another
option would be to specify the types of terrorist attacks likely to have a devastating
effect on a community (such as the use of a chemical, biological, radiological, or
nuclear (CBRN) weapon that presents a continued health hazard to residents) as
opposed to those with a more limited impact, such as a personal attack by one
terrorist, or a few, armed with guns or conventional explosives.
Pro. Advocates of this option might contend that the current definition overly
restricts the President’s ability to initiate federal assistance to communities affected
by terrorist strikes, regardless of cause. In this view, broader language might be
needed to give the President authority to take action, particularly in view of the many
forms another terrorist attack could take.
has knowledge of any release (other than a federally permitted release) of a hazardous
substance ... immediately notify the National Response Center established under the Clean
Water Act of such release.” 42 U.S.C. 9603. Regulations for the NCP are set out in: 40
CFR Part 300.
15 U.S.C. 636. The SBA authority is discussed in the section “Small Business Assistance”
in this report.
42 U.S.C. 5195a. “The term <hazard’ means an emergency or disaster resulting from—(A)
a natural disaster; or (B) an accidental or man-caused event.”
Con. Those opposed to broadening the definitions used in the Stafford Act
might argue that the original intent of the Stafford Act is to address needs that arise
from catastrophic disasters of natural origin, or from events that resemble such
disasters. A series of terrorist attacks, all of which resulted in declarations, they may
argue, could represent a different type of disaster, which raises policy questions such
as: (1) Should limited federal resources be “promised” when consequence
management could lead to a significant financial drain on federal fiscal and personnel
resources? (2) Should federal resources be committed to rebuild an area
contaminated by nuclear fallout or other hazards?
Expand the Role of Congress. Prior to 1950, Congress authorized the
provision of all federal disaster assistance through special legislation enacted after
specific catastrophes. Congress could consider using its legislative authority to, in
effect, declare that federal assistance is to be provided to communities after a terrorist
attack if the definitions in the Stafford Act prove too restrictive. To a limited extent,
Congress has exercised such authority through supplemental appropriations that have
targeted federal assistance to certain disaster-stricken areas, sometimes to supplement
existing authority. Some examples of such action focused on the oil spill from the
tanker Exxon-Valdez,68 flood damage at Camp Pendleton, California,69 needs arising
from disasters in Nebraska and Kansas,70 the costs associated with the crash of TWA
Flight 800 off Long Island, New York,71 and damages caused by ice storms in
Arkansas and Oklahoma.72
Another option would be to increase Congress’s oversight role regarding the
authority of the President to issue a declaration. One way of facilitating such a
review would be to increase reporting requirements for the President. For example,
the Disaster Mitigation Act (DMA) of 2000 included a requirement that the President
notify Congress of any public assistance grant exceeding $20 million for the repair,
restoration, reconstruction, or replacement of public or certain non-profit facilities
damaged or destroyed by a declared major disaster.73 Through an amendment to the
Stafford Act, a similar reporting requirement could require the President to notify
Congress when he has reason to consider issuing a major disaster declaration after
any suspected terrorist attack. Once such notification is received, Congress might
elect to examine the circumstances surrounding the President’s decision to declare,
or not to declare, a major disaster, and then possibly take legislative action.
Pro. Members of Congress concerned with the discretionary authority of the
President to decide when federal disaster assistance is to be provided might support
legislative options that place reporting requirements on the executive branch and
P.L. 101-45, 103 Stat. 102.
P.L. 103-50, 107 Stat. 255.
P.L. 101-302, 104 Stat. 243.
P.L. 105-18, 111 Stat. 193, P.L. 106-31, 113 Stat. 96.
P.L. 107-38, 115 Stat. 177.
42 U.S.C. 5172(a)(4), 114 Stat. 1562
facilitate congressional review. Congress could then fully debate and possibly
modify declaration decisions made by the President.
Con. Congress enacted the disaster assistance statute in 1950 to give
declaration authority to the President because it did not wish to delay the provision
of federal disaster assistance due to the press of other congressional matters. It may
be argued that congressional involvement in the declaration process could lead to
inefficiencies and cumbersome communications and decision-making processes.
Enact New Authority. A new statute could be enacted to authorize the
President to determine when federal assistance would be provided after any incident
attributed to or caused by terrorists. Such new authority could offer broader or
different categories of assistance for the response to terrorist attacks, including
military or medical assistance not necessarily available after “conventional” disasters.
Under such authority, other types of federal assistance could be reconsidered. For
example, the mitigation (loss reduction) initiatives in the Stafford Act might be
reconsidered to authorize the President to fund prevention and security improvement
The Administration’s proposal to establish a Department of Homeland Security
might arguably be one legislative vehicle for such authority. Of particular note, the
Administration proposes that the department, when established, “consolidate existing
federal government emergency response plans ... into one genuinely all-hazard
plan.”74 Through enactment of this authority Congress might direct the type of
assistance to be provided after any attack, the planning mechanism to be followed,
and the agency or office responsible for administering the federal effort, regardless
of the means used by terrorists. Congress is considering legislation (S. 2452/H.R.
4660, inter alia) to establish the department.
Pro. Proponents might argue that enactment of new authority specifically
oriented toward the prevention and response to terrorist attacks would enable
Congress to tailor assistance to meet the unique needs presented by such threats. For
example, the pre-disaster mitigation grant authority approved in the DMA of 2000
specifies that funds “may be used ... to support effective public-private natural
disaster hazard mitigation partnerships.”75 Proponents of change might seek to
remove the restrictions on “natural disaster.” Coordination problems experienced by
FEMA, as an independent agency, might be resolved if a Cabinet department
manages the federal response. Different statutory provisions might be required to
help communities mitigate against and recover from terrorist attacks and to involve
a range of partnerships, including private, interstate, and possibly international
Con. Opponents of such new authority might argue that the current range of
authorities, notably the Stafford Act and the National Emergencies Act, make such
a provision unnecessary and could be redundant of existing authority. Also, they
might contend that all disasters, regardless of cause, require similar types of response,
The Department of Homeland Security, p. 12.
42 U.S.C. 5133, 114 Stat. 1554.
recovery, and mitigation assistance. The legislation under consideration to establish
the Department of Homeland Security should, they might argue, concentrate solely
on organizational and administrative matters, and not include policy revisions.
Opponents might also voice concern that federal costs could increase dramatically
with enactment of new authority.
Expand Authority to Declare an Emergency. Congress might provide
limited authority to an administration official, such as the director of FEMA or OHS,
to issue an emergency (or other) declaration. Precedents for such authority exist. For
years the Administrator of the Small Business Administration (SBA) and the
Secretary of the Department of Agriculture have issued disaster declarations pertinent
to his or her agency’s mission. More recently, Congress has authorized the Secretary
of the Army to determine that a Stafford Act emergency exists “with respect to the
emergency need” for an outlet from Devils Lake, North Dakota, should water levels
Pro. Advocates of this option might argue that an agency head familiar with the
specific nature of a terrorist incident might be able to narrowly establish the
boundaries of federal assistance to ensure the efficient use of federal resources under
Con. Opponents might argue that only the President, or very few agency heads,
should be authorized to exercise such discretionary authority. Also, they might
contend that the extension of such authority to non-elected officials is inappropriate,
and that federal costs could increase.
U.S. Congress, Conference Committees, 2000, Making Appropriations for Energy and
Water Development for the Fiscal Year Ending September 30, 2001, and for Other
Purposes, conference report to accompany H.R. 4733, H. Rept. 106-907, 106th Cong. 2nd
sess. (Washington: GPO, 2000), p. 4.
Eligibility for Stafford Act Assistance77
Issue Summary. After a major disaster declaration is issued, private not-forprofit organizations may be eligible for Stafford Act grants to reconstruct and repair
their damaged facilities that provide such public services as education, medical care,
utilities, rehabilitation services, and custodial care. Private, for-profit enterprises
may be eligible for disaster assistance loans from the SBA or the Department of
Agriculture; however, they are not eligible for Stafford Act grants.
Some contend that private for-profit enterprises that provide necessary services
to the public should be eligible for Stafford Act grants. They argue that disasters that
overwhelm the resources of state and local governments and not-for-profit
organizations can also overwhelm the resources and insurance coverage of for-profit
enterprises. The issue is whether Congress should extend Stafford Act grants to
certain for-profit enterprises, notably those involved in the maintenance of the
nation’s critical infrastructure.
Issue Analysis. The types and amount of federal disaster assistance have
increased significantly since 1950 when the 81st Congress authorized the President
to direct federal agencies to provide aid to state and local governments.78 By
comparison, the categories of applicants eligible for federal assistance have remained
relatively constant. State and local governments, individuals, and families have
historically been the primary beneficiaries of federal disaster assistance grants, while
private property owners have primarily relied on loans and subsidized insurance.
Application to Terrorist Attacks. The terrorist attacks of September 11
in New York City disrupted services provided by utilities, transportation,
communication, educational, and medical care facilities. Utility facilities and
infrastructure elements were destroyed, alternative instructional arrangements had to
be made for students, and medical facilities lost considerable revenue as they shifted
resources.79 As a result, some institutions ineligible for Stafford Act grants face
considerable financial hardships.
In an effort to help those organizations, the supplemental appropriations request
for fiscal year 2002 submitted by the Bush Administration to Congress requested
$750 million for the Community Development Block Grant (CDBG) program
Written by Keith Bea, Government and Finance Division.
P.L. [81-]875, 64 Stat. 1109. The 1950 Act also authorized that federal disaster assistance
be provided to individuals through the distribution of consumable supplies through the
American National Red Cross and by “performing on public or private lands protective and
other work essential for the preservation of life and property.” 64 Stat. 1110. For a
summary of the expansion of federal assistance see: Rutherford H. Platt, “Shouldering the
Burden: Federal Assumption of Disaster Costs,” in his Disasters and Democracy
(Washington: Island Press, 1999), pp. 11-46.
For a description of such losses see: Greg Gittrich, “Telecommunications, Electricity
Companies Face Daunting Task at Ground Zero,” New York Daily News, Dec. 11, 2001, p.
42; Jayson Blair, “In an Urban Underbelly, Hidden Views of Terror’s Toll,” The New York
Times, Oct. 14, 2001, p. A32.
administered by the Department of Housing and Urban Development (HUD). In the
request the Administration noted that CDBG funds:
may be used for assistance for properties and businesses (including the
restoration of utility infrastructure) damaged by, and for economic revitalization
directly related to, the terrorist attacks on the United States that occurred on
September 11, 2001 in New York City and for reimbursement to the state and
City of New York for expenditures incurred from the regular Community
Development Block Grant formula allocation used to achieve these same
Both the House and Senate have agreed with this request, as reflected in committee
reports81 and the text of the engrossed House provision, as follows:
For an additional amount for <Community Development Fund,’ as authorized by
title I of the Housing and Community Development Act of 1974, as amended, for
emergency expenses to respond to the September 11, 2001, terrorist attacks on
the United States, $750,000,000, to remain available until expended: Provided,
That the State of New York, in cooperation with the City of New York, shall,
through the Lower Manhattan Development Corporation, distribute these funds:
Provided further, That such funds may be used for assistance for properties and
businesses (including the restoration of utility infrastructure) damaged by, and
for economic revitalization directly related to, the terrorist attacks on the United
States that occurred on September 11, 2001, in New York City and for
reimbursement to the State and City of New York for expenditures incurred from
the regular Community Development Block Grant formula allocation used to
achieve these same purposes: Provided further, That the State of New York is
authorized to provide such assistance to the City of New York: Provided further,
That in administering these funds and funds under section 108 of such Act used
for economic revitalization activities in New York City, the Secretary may waive,
or specify alternative requirements for, any provision of any statute or regulation
that the Secretary administers in connection with the obligation by the Secretary
or the use by the recipient of these funds or guarantees (except for requirements
related to fair housing, nondiscrimination, labor standards, and the environment),
upon a finding that such waiver is required to facilitate the use of such funds or
guarantees: Provided further, That such funds shall not adversely affect the
amount of any formula assistance received by the State of New York, New York
City, or any categorical application for other Federal assistance: Provided
further, That the Secretary shall publish in the Federal Register any waiver of any
U.S. President (Bush), Emergency Funding Request Submission to Congress for FY2002,
p. 48, at: [http://w3.access.gpo.gov/usbudget/fy2003/pdf/5usattack.pdf], visited May 3,
U.S. Congress, House Committee on Appropriations, Making Supplemental
Appropriations for Further Recovery From and Response to Terrorist Attacks on the United
States for the Fiscal Year Ending September 30, 2002, and for Other Purposes, report to
accompany H.R. 4775, 107th Cong., 2nd sess., H. Rept. 107-480 (Washington: GPO, 2002),
p. 54; U.S. Congress, Senate Committee on Appropriations, Making Supplemental
Appropriations for Further Recovery From and Response to Terrorist Attacks on the United
States for the Fiscal Year Ending September 30, 2002, and for Other Purposes, report to
accompany S. 2551, 107th Cong., 2nd sess., S. Rept. 107-156 (Washington: GPO, 2002), p.
statute or regulation that the Secretary administers pursuant to title I of the
Housing and Community Development Act of 1974, as amended, no later than
five days before the effective date of such waiver: Provided further, That the
Secretary shall notify the Committees on Appropriations on the proposed
allocation of any funds and any related waivers pursuant to this section no later
than five days before such allocation.82
Some of the most heavily affected entities included Consolidated Edison (Con
Ed) and Verizon, the telecommunications corporation. The reported financial
distress of Con Ed and Verizon reportedly stems, at least in part, from deficient
insurance coverage. One news account reported that Con Ed had insured two
destroyed substations for $70 million, requiring “an estimated $340 million in
additional costs. Verizon has estimated that its insurance will cover $1 billion in
damage, leaving $380 million in additional costs.”83
In addition to restoring lost facilities, the funding deficiency may be attributed
to the increased costs associated with improving the utility infrastructure after the
disaster. For example, one report stated that Con Ed “is now digging nearly seven
miles of trenches through the financial district to create a permanent grid, which it
expects to have operating by May. The substations were insured for about $70
million; Con Ed estimates that the work will cost a total of about $400 million.”84
Federal assistance was requested, according to news reports, to forestall adverse
economic consequences, including increases in rates associated with reconstruction.
In addition to the utilities, for-profit educational and medical facilities suffered
losses. Some of the costs incurred by educational institutions apparently were
associated with the placement of students in alternative educational settings.85
Medical facilities lost an estimated $340 million as they shifted resources to meet the
needs of the disaster victims, clean up airborne particles from building interiors, and
address other needs.86
Background. For decades Congress has authorized federal assistance to
rebuild or repair facilities owned by organizations that provide public services. The
1950 statute authorized “emergency repairs to and temporary replacements of public
H.R. 4775, 107th Congress.
Jayson Blair, “Con Ed Asks Permission to Hold Rebates,” New York Times, March 20,
2002, p. A24.
Neela Banerjee, “In Tumultuous Year, Con Ed Basks in Its Quiet Success,” New York
Times, Dec. 26, 2001, p. C1.
Fred Bruning, “Enduring Agony,” Newsday, March 10, 2002, p. A07. Joyce Purnick, “In
Schools, a Hidden Toll of Sept. 1,” Associated Press, May 13, 2002; Ellen Yan, “FEMA
Agrees to Aid NYU,” Newsday, May 16, 2002, p. A28.
Judith Messina, “Hospitals’ Chronic Pain Gets Worse; Surgery Cancellations, Unforeseen
Expenses from WTC Disaster Create Revenue Drain,” Crain’s New York Business, Oct. 15,
2001, p. 50; Margaret Ramirez, “Report: Cost to Hospitals $340M,” Newsday, Oct. 5, 2001,
p. A07; Greater New York Hospital Association, “The Fiscal Impact of the World Trade
Center Attack on New York Hospitals,” at: [http://www.gnyha.org], visited May 17, 2002.
facilities of local governments.”87 Since then Congress has enacted provisions that
have expanded the eligibility of organizations for such assistance, adhering to the
general principle that public entities are eligible for grants while corporations are
eligible for loans.88 For example:
! The Disaster Relief Act of 1966 authorized grants to repair or reconstruct “any
project of a state, county, municipal, or other local government agency for
flood control, navigation, irrigation, reclamation, public power, sewage
treatment, water treatment, watershed development, or airport construction”
damaged or destroyed.89 The Act also authorized the Secretary of Agriculture
to assist nongovernmental entities, specifically to: “make or insure loans to
associations, including corporations not operated for profit and public and
quasi-public agencies, for the acquisition, construction, improvement,
replacement, or extension of waste disposal systems and other public facilities
damaged or destroyed as a result of a major disaster...”90
The Disaster Relief Act of 1970 created new authority that authorized the
President to direct federal agencies to provide assistance by “making repairs
to, restoring to service, or replacing public facilities (including street, road,
and highway facilities) of state and local governments ...”91 This statute was
amended in 1971 to authorize grants to be made for the repair or
reconstruction of “any medical care facility which is owned by an organization
exempt from taxation ... which is damaged or destroyed by a major disaster.”92
! The Disaster Relief Act of 1974 superseded the provisions of the 1970 Act
and expanded the definition of “local government” (and therefore eligibility
for public facility repair grants) to include “any Indian tribe or authorized
tribal organization, or Alaska Native village or organization.”93
! The 1988 amendments authorized aid to private nonprofit “educational, utility,
emergency, medical, rehabilitational, and temporary or permanent custodial
care facilities (including those for the aged and disabled), other private
nonprofit facilities which provide essential services of a governmental nature
to the general public, and facilities on Indian reservations as defined by the
Sec. 3, P.L. [81-]875, 64 Stat. 1110.
An exception to that general principle was made in the 1971 amendment to the Disaster
Relief Act of 1970 that authorized grants for private medical care facilities. See summary
of the 1970 Act.
Sec. 9, P.L. 89-769, 80 Stat. 1320.
Sec. 6(b), The Disaster Relief Act of 1966, 80 Stat. 1318.
Sec. 203(a)(4)(B), The Disaster Relief Act of 1970, 84 Stat. 1747.
P.L. 92-210, 85 Stat. 742-43.
Sec. 102(6), The Disaster Relief Act of 1974, 88 Stat. 144.
Sec. 103(f), The Disaster Relief and Emergency Assistance Amendments of 1988, 102
The decades-long trend toward expanding eligibility for facility repair and
replacement authority shifted in 2000 when Congress amended the Stafford Act
through amendments titled “Streamlining and Cost Reduction.” One amendment
requires that the owner or operator of a private non-profit facility seeking assistance
that does not provide “critical services” apply first to the Small Business
Administration (SBA) for a disaster loan. If the SBA determines the applicant is
ineligible for such a loan or if the maximum amount of the loan has been granted and
further needs remain unmet, the owner of the facility might receive grant assistance.
The amendment defines critical services as “power, water (including water provided
by an irrigation organization or facility), sewer, wastewater treatment,
communications, and emergency medical care.”95
While some disasters over the years may have led some to quietly seek the
extension of grant-in-aid eligibility to affected corporations, the ice storms that
paralyzed much of New England in 1998 set the stage for perhaps the most public
debate over the ineligibility of for-profit entities for Stafford Act assistance. Utility
companies in the New England states lost millions of dollars due to the collapse of
electrical transmission lines weighed down by ice. Public utilities were eligible for
assistance under the Stafford Act, but the commercial (for-profit) utilities were not
eligible. In response to calls for assistance from the commercial utility companies,
Congress appropriated $130 million for the CDBG program.96 The statute directed
that these funds were to be disseminated through the CDBG program “for disaster
relief, long-term recovery, and mitigation ... except for those activities reimbursable
by or for which funds are made available” by FEMA, SBA, or the Army Corps of
A decision by the HUD secretary to allocate some of the $130 million to states
outside New England affected by other disasters and “just” $2 million to Maine
evoked considerable controversy. According to one news report “Maine’s delegation
in Congress called the federal grant <meager’ and <an outrageous betrayal’ of
Congress’ intent for the money.”98 Secretary Andrew Cuomo of HUD reportedly met
with Members of Congress, and a resolution to the matter was reached through
appropriations and the allocation of additional money for Maine utilities.99
The issue of appropriating CDBG funds to assist a for-profit corporation
affected by a major disaster came before Congress before the September 11 attacks.
Flooding caused by Tropical Storm Allison in June 2001 inundated much of the
Sec. 205(a), Disaster Mitigation Act of 2000, 114 Stat. 1562.
P.L. 105-174, 112 Stat. 76.
Steve Campbell, “Ice Storm Aid Pittance Seen as <Betrayal’,” Portland Press Herald, Nov.
22, 1998, at: [http://www.portland.com/], visited Nov. 23, 1998.
“Congress Grants Maine Utilities More Funds for Damage from 1998 Ice Storm,” Electric
Utility Week, June 7, 1999, p. 14.
Texas Medical Center (TMC), an administrative entity that provides support to
hospital and medical facilities in the Houston area. FEMA officials determined that
TMC facilities that provide medical services were eligible for facility repair grants,
but that the administrative facility was not. FEMA’s ruling was upheld on appeal.100
In recent action on the supplemental appropriations legislation for FY2002, Congress
approved a provision to authorize reimbursement to the TMC.101 An amendment to
extend similar aid to New York colleges affected by the September 11 attacks
reportedly was rejected by the House.102
Maintain the Status Quo. Federal disaster policies generally authorize loans
and subsidized insurance for private property owners recovering from a major
disaster and grants for facilities owned by public organizations. Some may argue that
this distinction between categories of applicants should continue to be recognized,
or await the results of ongoing congressional study before changes are made.103
Pro. Insurance has traditionally been the primary source of assistance for the
private sector after a disaster strikes. For-profit companies can arguably factor the
costs of that insurance into the prices they charge for goods and services, and can
generally obtain private and federal loans, if necessary, to supplement the insurance.
Congress might consider, on a case-by-case basis, the needs of for-profit entites
affected by a disaster and appropriate CDBG funds as needed.
Con. Some would argue that congressional debate after past major disasters
indicates that the current policy is deficient. Repair and reconstruction costs, in large
part, will be passed on to ratepayers or consumers, and services may be lost if forprofit entities declare bankruptcy or curtail significant operations because they
remain ineligible for federal aid beyond loans and subsidized insurance. Also,
Congress likely will continue to legislate assistance on a case-by-case basis, thereby
altering the longstanding intent of the Stafford Act to establish a continuing
assistance program that is uniformly administered and does not require congressional
debate on victims’ needs following each disaster.
Qualify Certain For-Profit Entities. Pending before the 107th Congress is
legislation (H.R. 3239) that would include private for-profit medical facilities in the
Stafford Act definition of private nonprofit facility to ensure the continuity of
Telephone conversation with Ms. Joanne Skinner, congressional liaison staffer, Houston
Disaster Field Office, May 3, 2002. For background see: Alan Bernstein, “TMC Corp.
Denied Flood Funds; FEMA: Hospital Coordinator Does Not Fit Nonprofit Profile,”
Houston Chronicle, Sept. 22, 2001, p. A31.
“That notwithstanding any other provision of law, the Texas Medical Center may be
provided FEMA Public Assistance and Hazard Mitigation grants as an agent for eligible
applicants.” H.R. 4775 (Version as placed on Calendar in the Senate), 107th Congress.
Ellen Yan, “House Move to Beef Up 9/11 School Aid,” Newsday, May 10, 2002, p. A16.
Diana B. Henriques, “Senate Panel Asks G.A.O. to Review FEMA’s Role,” The New York
Times, May 4, 2002, p. A12.
medical care following a major disaster. Similar legislation might be considered to
make for-profit utility companies or other types of organizations eligible for Stafford
Pro. Past experience indicates the high costs of replacing lost infrastructure,
restoring disrupted services, or compensating organizations for lost revenue if forprofit companies affected by a disaster do not receive federal assistance. Proponents
believe the federal government is a necessary partner in funding such improvements
that, they argue, benefit the national economy.
Con. Including for-profit companies in the definition of entities eligible for
Stafford Act grant assistance would increase federal disaster assistance expenditures,
possibly by a substantial amount. Such costs would increase considerably if forprofit companies other than utilities or medical service industries that provide
arguably “essential” services or goods sought to be included. There may also be a
question of whether covered for-profit utilities would decrease the amount of
insurance they carry once they are eligible for grants.
Amend the “Critical Services” Provision. The Disaster Mitigation Act
of 2000 listed utility services and emergency medical care as critical services that do
not require facility owners to apply first for SBA loans. The Act also grants the
President discretion in making such decisions.104 Other services deemed essential or
critical might be added to the list, such as education systems, providers of counseling
assistance, or those that feed or shelter the homeless. As another option, the
President could be granted greater discretion to identify such services on a case-bycase basis.
Pro. Some essential services are provided by for-profit as well as non-profit
organizations. The delivery of some of those services, even administrative services,
are important as communities attempt to return to business as usual after a terrorist
attack or other disaster. Congressional consideration of the unique needs of certain
disaster victims and of stricken communities may lead to the conclusion that greater
latitude should be given administration officials in identifying critical services.
Con. Federal disaster assistance costs would escalate if the cost savings
provisions of the 2000 Act were stricken. If the legislation were amended to
authorize administration officials to use greater discretion in deciding among
“essential” or “critical” services provided by for-profit or other non-profit
institutions, administration officials would be pressed to continue to expand federal
grant assistance. Decisions on where to draw the line could be colored by political
“The President may make contributions to a private nonprofit facility under paragraph
(1)(B) only if—“(i) the facility provides critical services (as defined by the President) in the
event of a major disaster...” Section 205, P.L. 106-390, 114 Stat. 1562.
Federal Coordination of Recovery Assistance105
Issue Summary. As a result of the catastrophic destruction of property in
lower Manhattan after September 11, New York City began a large-scale, long-term
recovery effort. The neighborhood is to be reconfigured, new infrastructure set in
place, and buildings repaired or newly constructed. FEMA and other federal
agencies, charged with providing recovery assistance after major disasters, will
contribute billions of dollars to the project and coordinate efforts with state and local
Some progress has been made in rebuilding the neighborhood despite the extent
of damage that occurred and the complexities of rebuilding a large part of lower
Manhattan. However, the magnitude of the destruction in New York City, the
projected costs, and the significance of this project to the nation present a new
challenge to federal officials. The issue before Congress is whether current federal
authorities and plans are adequate to coordinate and monitor federal and non-federal
rebuilding activities in New York City, and, by extension, long-term recovery efforts
that may be required in other cities after future terrorist attacks.
Issue Analysis. Some catastrophic disasters have struck major cities in the
United States with devastating costs in life and property. The flooding of Galveston
in 1900, the San Francisco earthquake of 1906, and more recently, the destruction of
part of Los Angeles in 1994 from the Northridge earthquake resulted in the remaking
of large parts of these urban centers and the coordination of federal and non-federal
resources. Whether the catastrophe is caused by an earthquake, flood, or terrorist
attack, disaster recovery involves decisions on land use planning, neighborhood
versus regional or national concerns, and the involvement of a host of interested
parties such as citizens, businesses, property owners, civic associations, and elected
Application to Terrorist Attacks. In coordinating federal assistance to New
York City, FEMA will work with a joint city-state corporation created in November
2001 to oversee the recovery process—the Lower Manhattan Development
Corporation (LMDC).106 The LMDC, in partnership with the Port Authority of New
York and New Jersey, is responsible for planning the long-term redevelopment of
affected portions of lower Manhattan and coordinating local, state, and federal
assistance. The corporation is led by a 16-member board, has a full-time staff, and
has nine advisory committees, including one committee that represents the families
of victims. The LMDC will fund its activities with state and federal money.
As the LMDC and the Port Authority coordinate New York City’s recovery
efforts, Congress might consider whether federal authorities and plans are adequate
for coordinating assistance to a large-scale, long-term recovery effort following
terrorist attacks. It may be that they are not adequate to address the large scale and
long duration of New York City’s recovery. Despite the considerable experience of
Written by Ben Canada, Government and Finance Division.
The Lower Manhattan Development Corporation’s Web site is
FEMA and other federal agencies in coordinating assistance, federal agencies are not
accustomed to a recovery project of this magnitude. Should an even more
devastating terrorist attack occur, such as one that involved the contamination of a
commercial district with a CBRN device, the recovery complexities could multiply.
Some specific questions Congress might address as it considers federal
coordination efforts after terrorist attacks include the following:
! Should the Stafford Act, which governs most federal disaster assistance, be
amended to better address long-term recovery issues?
! How will federal agencies coordinate efforts with the LMDC (or similar
entities in other cities) and implement recovery activities in a timely manner?
! Will federally funded recovery projects receive sufficient public input during
the planning process? How will the concerns and interests of some sectors
(e.g. low-income residents) be balanced with those of others (e.g., property
owners or developers)?
! Should other metropolitan communities be encouraged to devote more
resources to recovery planning in anticipation of a disaster or potential attack?
FEMA has not yet released an after-action report on federal recovery activities
in New York City.107 Federal officials, however, have commented on the
effectiveness of ongoing federal recovery efforts. For example, FEMA Director Joe
Allbaugh has expressed his belief that federal coordination efforts have been
successful to date. In congressional testimony, he said that FEMA has received
support from the Departments of Agriculture, Defense, Energy, Justice, and
Transportation, and other agencies.108
Another FEMA official expressed support for the current authorities provided
by the Stafford Act and the guidance provided in the Recovery Annex of the Federal
Response Plan. Marianne Jackson, FEMA’s deputy federal coordinating officer for
the World Trade Center disaster, testified before the Senate Committee on
Environment and Public Works that she believed the Stafford Act provided sufficient
authority for FEMA to effectively carry out response and recovery activities. She
also expressed support for existing plans:
Since 1992, and again in response to the tragic events on September 11, 2001, the
Federal Response Plan has proven to be a solid framework time and time again
for managing major disasters and emergencies regardless of cause.... The
FEMA, as well as state and local governments, typically publish after-action reports
following the response and recovery phases of a disaster. The reports generally offer an
overview of activities and an evaluation of the response and recovery efforts.
Statement of Joe M. Allbaugh, director of U.S. Federal Emergency Management Agency,
U.S. Congress, Senate Committee on Environment and Public Works, FEMA Response to
September 11, 2001 Attacks, hearings, 107th Cong., 1st sess., Oct. 16, 2001.
framework is successful because it builds upon the existing professional
disciplines and relationships among the participating agencies.109
A number of observers, however, have criticized the coordination of federal
assistance following the terrorist attacks. Some have faulted FEMA and the EPA
with failing to coordinate the reporting of air quality in lower Manhattan, a factor that
may affect rebuilding efforts as residents and businesses contemplate relocation.110
Others have criticized FEMA’s communication with nonprofit charities, stating that
a lack of coordination has resulted in eligibility problems for attack victims and the
distribution of funds that would facilitate economic recovery.111 FEMA has also
received criticism for the timeliness and interpretation of eligibility regulations in
some of its programs, notably mortgage and rental assistance for those who face
eviction or the loss of residences due to the effects of the attack.112
Some have expressed concern that the federal government will not sufficiently
assist the city with the replacement of lost infrastructure and will not provide
assistance over the duration of the recovery. They have specifically cited the need
for federal funding of transportation projects, including replacing demolished subway
tunnels and stations and extending train lines that were not damaged in the attacks.113
Still others questioned the methods by which public participation will be
integrated into the recovery planning process. Some have noted some conditions that
may inhibit public participation, including an accelerated design process established
by the LMDC, along with the potentially competing interests of family members of
victims, land developers, local residents, business owners, and public officials.114
Background. Given the devastation in New York City and the worse
devastation that could result from a terrorist attack involving a weapon of mass
Statement of Marianne Jackson, deputy federal coordinating officer, U.S. Federal
Emergency Management Agency, U.S. Congress, Senate Committee on Environment and
Public Works, Subcommittee on Clean Air, Wetlands, and Climate Change, Impacts on Air
Quality of the September 11th Attacks and Possible Health Effects in the Area of the World
Trade Center, hearings, 107th Cong., 2nd sess., Feb. 11, 2002.
This issue is discussed in the section of this report titled “Environmental Hazard
Assessment and Communication.” See also: Stevenson Swanson, “Panel Told NYC Was
Misled on Air Quality,” Chicago Tribune, Feb. 12, 2002, p. 11; Associated Press State and
Local Wire, “Data on Toxic Dust Never Made It to Ground Zero,” February 10, 2002.
Dana B. Henriques and David Barstow, “Change in Rules Barred Many from Sept. 11
Disaster Relief,” New York Times, April 26, 2002, p. A1.
Raymond Hernandez, “FEMA’s Pace on 9/11 Aid Is Criticized,” New York Times, June
14, 2002, p. A1. Also See: David Barstow and Diana B. Henriques, “Sorting Out Why U.S.
Agency Spent So Little,” New York Times, April 26, 2002, p. A13.
Steven Malanga, “How to Rebuild New York,” City Journal, Autumn 2001, vol. 11, no.
4, at: [http://www.city-journal.org/html/11_4_how_to_rebuild.html], visited June 11, 2002.
Monika Iken, “WTC Agency Ignores Families and Reality,” New York Daily News, May
6, 2002 and Edward Wyatt, “Blueprint for Ground Zero Begins to Take Shape,” New York
Daily News, May 4, 2002.
destruction (WMD), Congress may examine past practices and consider new
mechanisms for coordinating assistance. At least one such examination has been
reported to have occurred in the past. Following the Northridge earthquake of 1994,
some observers believed that federal assistance programs were not suitably structured
for a large-scale disaster. In a 1996 congressional hearing on the federal
government’s response to the earthquake, one California official stated:
Because of the inherent technical complexities of the seismic damage, the
Northridge earthquake has highlighted limitations in the current structure of
federal disaster assistance regulations and policies. I believe that federal disaster
assistance policies, particularly as they apply to damaged public structures, need
to be reformed. Quite simply, current programs are too costly to administer, too
often applied in an inconsistent and arbitrary manner, placing FEMA in roles and
decisions that sometimes directly conflict with the authority of local and state
As the recovery process in New York City proceeds, it is possible that the terrorist
attacks of September will lead to another examination of federal disaster policy and,
specifically, coordination of recovery assistance.
Following a major disaster declaration, affected areas became eligible for a wide
array of federal recovery assistance. The recovery phase typically begins when the
response phase, which involves search and rescue and other lifesaving activities, is
nearly complete or has ended. The “Recovery Annex” in the Federal Response Plan
describes recovery activities as “... actions by disaster victims that enable them to
begin the process of rebuilding their homes; replacing property; resuming
employment; restoring their businesses; permanently repairing, rebuilding, or
relocating public infrastructure; and mitigating future disaster losses.”116 Congress
has authorized recovery assistance for individuals and families, small businesses, and
state and local governments through several statutes, including the Stafford Act.
The Stafford Act authorizes FEMA to coordinate all federal assistance provided
to eligible recipients following a disaster declaration. Other agencies administering
recovery programs include the Small Business Administration (SBA) and the
Departments of Justice and Labor. In addition, many other agencies administer
general assistance programs that may be applicable in disaster situations. In general,
federal recovery programs do not have public participation requirements other than
requirements to provide public notice.117
Statement of Richard Andrews, director, Office of Emergency Services in: U.S.
Congress, House Committee on Government Reform, Subcommittee on Government
Management, Information, and Technology, The Government’s Response to the Northridge
Earthquake, hearings, 104th Cong., 2nd Sess., Jan. 19, 1996. pp. 65-66.
U.S. Federal Emergency Management Agency, Federal Response Plan (Washington:
April 1999), p. RF-1, available at [http://www.fema.gov/r-n-r/frp/], visited April 8, 2002.
An exception concerns the authority of the EPA regarding a release or threatened release
that might pose an imminent and substantial threat to public health or welfare or to the
environment. EPA has prepared a public participation guidance for coordinators. For an
overview of the authority, delegation of responsibility, and summaries of directives see:
The “Recovery Annex” of the Federal Response Plan includes guidance for
federal recovery activities authorized by the Stafford Act. The Annex emphasizes
that the affected state and local governments are ultimately responsible for setting
recovery priorities, developing plans, and coordinating assistance, and that federal
resources are meant to “... complement and supplement State, local, and private
resources to facilitate recovery.” Furthermore, the Annex acknowledges FEMA as
the lead federal agency in the recovery process and instructs other agencies to work
with FEMA in delivering recovery assistance.118 The “Recovery Annex” does not
address long-term recovery issues or public participation in planning federally funded
Policy Options. If Congress examines the existing authorities and plans
governing federal assistance in the context of recovery on a large scale from terrorist
attacks, it might consider such options as the following.
Maintain the Status Quo. Congress might maintain the existing authorities
and plans governing the coordination of federal assistance. While certain aspects of
federal recovery efforts have been criticized, changes in statutory authority may not
be necessary. The city’s long-term recovery, however, is in its early stages and
evaluations of federal coordination have not been completed.
Pro. Arguably, the Stafford Act already gives the President sufficient authority
and flexibility to address unique needs that might arise during recovery from terrorist
attacks. It is possible that amending the Act in a way that directs the President to use
a specific plan or process could decrease the President’s flexibility in bringing federal
resources to bear after terrorist attacks.
Con. There have been a number of criticisms about aspects of the recovery
process. Coordination of information among federal agencies, nonprofits, and
individuals is the subject of much of the criticism. Some applicants and elected
officials have questioned federal agencies’ determination of eligibility for assistance.
The existing authorities and plans might not be appropriate for recovery that is longterm and large-scale. Changes might better ensure coordination of agencies’ activities
over a multi-year recovery effort after communities suffer from a terrorist attack.
Create a Special Coordinating Office. Congress might create or authorize
the President to create a special office for coordinating assistance after certain
disasters when lengthy and extensive federal involvement is expected. Congress
most recently pursued this option following the Cerro Grande fires in New Mexico
in 2000. After that disaster, Congress created the Office of Cerro Grande Fire Claims
within FEMA and charged it with overseeing federal assistance to victims.120
Similarly, if a special office were authorized for recovery activities in New York
[http://es.epa.gov/oeca/osre/980210.html], visited June 17, 2002.
Ibid., pp. RF-4-RF-7.
Ibid., pp. RF-8-RF-11.
P.L. 106-246; 114 Stat. 583-590.
City, it could represent federal interests and provide a continuing presence for the
needs of the city and its residents.
Officials from the LMDC reportedly have stated that the recovery of New York
City will take several years.121 One task Congress might assign to a special
coordinating office would be to explore means of expediting the delivery of federal
assistance, including the advantages and disadvantages of returning federal offices
and employees to Lower Manhattan.122 For example, some observers have suggested
that some assessments required by federal, state, and local governments, including
environmental impact statements, could be jointly conducted, and that procedures for
granting building permits could be combined.123
A special office also could undertake and coordinate non-recovery activities that
might be required solely in the context of terrorist attacks, such as improving warning
systems and coordinating security and law enforcement resources. Congress could
charge a special office with facilitating communication between federal law
enforcement agencies and state and local officials. Federal officials have warned that
terrorists may again attempt attacks on New York City landmarks and “highvisibility” targets.124 A special office might include a law enforcement branch with
liaisons from the Federal Bureau of Investigation, Coast Guard, and other agencies,
as needed. The framework envisioned in the proposed Department of Homeland
Security might be applied to or considered in developing such an option.
Another option would be to delegate to the State of New York a degree of
decision-making authority over the federal assistance it receives. Congress could
delegate specific authorities to the state (which the state might elect to pass to the
LMDC), such as authority to coordinate administrative review processes, award
grants, and request funds directly from federal agencies. Congress enacted a similar
option in the 1974 amendments to the Public Works and Economic Development Act
of 1965.125 The amendments provided for the creation of “recovery planning
councils” following a disaster. The councils were required to include at least one
official each from the state government and the federal government, but they had to
maintain a majority of local government officials. The law gave them authority to
develop recovery plans and request funds from federal agencies (with the governor’s
consent). It also authorized the President to fund the activities of the recovery
planning councils, including the provision of funds for councils to make recovery
Edward Wyatt, “A Nation Challenged: Ground Zero: Years of Work Underground Before
Steel Reaches Skyward,” The New York Times, March 27, 2002, p. A12.
Associated Press, “Elected Officials Demand Return of Customs Service to Lower
Manhattan,” June 17, 2002.
Stephen L. Kass and Jean M. McCarroll, “Rebuilding Lower Manhattan,” New York Law
Journal, Oct. 26, 2001, pp. 3-4.
Dan Barry and Al Baker, “Security Tighter in New York After Vague Terrorist Threat,”
The New York Times, May 22, 2002, p. A2; Philip Shenon, “Suicide Attacks Certain in U.S.,
Mueller Warns,” The New York Times, May 21, 2002, p. A3.
P.L. 93-288; 88 Stat. 160.
grants and loans.126 Congress, however, never appropriated money for the councils,
and the provision was stricken in 1988.
A bill introduced in the Senate, S. 1624, proposes an Office of World Trade
Center Attack Claims. Under this proposal, the office would oversee only claims
from individuals, families, and small businesses. The bill does not address the
replacement of public infrastructure and long-term economic recovery issues.
Pro. A special office, with its own authorities and budget, might ensure that
federal resources are used more efficiently and effectively throughout the recovery
process. It could also offer state and local officials a single point-of-contact for
collecting information and resolving issues. Congress could also instruct the office
to undertake specific activities to assist recovery efforts and ensure that congressional
objectives are attained, such as administering the appeals process for assistance
programs, monitoring for fraud, identifying opportunities for mitigation, and
evaluating the effectiveness of federal programs.
Con. Given that existing federal plans already establish a framework for
coordinating federal recovery efforts, a special office might be considered
unnecessary. FEMA officials have expressed support for the existing authorities and
framework. This option could possibly disrupt existing relationships among federal,
state, and local agencies. Lastly, such an office might or might not fit the design that
Congress adopts in creating a Department of Homeland Security.
Expand Waiver Authority. Statutory and administrative requirements
placed on disaster assistance programs may at times delay the delivery of assistance.
Providing federal agencies the authority to waive selected requirements could
facilitate the coordination and distribution of assistance to recipients.
The Stafford Act grants federal officials discretion in waiving administrative
regulations for major disaster situations. If a state or locality is unable to satisfy an
administrative regulation due to the consequences of a major disaster, federal
officials may waive or modify such requirements that might impede the delivery of
federal assistance.127 Some observers have suggested that federal agencies should
have comparable authority to modify regulations to expedite the delivery of
assistance in lower Manhattan. For example, they suggest agencies could simplify
permitting processes, shorten public comment periods, or minimize reporting
The Stafford Act also affords FEMA statutory flexibility in the public assistance
program. States and localities have the option of accepting a contribution of up to
75% of the estimated cost of a proposed project in lieu of a matching grant for
P.L. 93-288, sec. 802(b), 802(c)(2), and 803(a); 88 Stat. 160.
42 U.S.C. 5141.
“Rebuilding Lower Manhattan,” pp. 2-3.
reconstruction.129 Should state and local officials determine that the community
would be better served by not repairing or replacing damaged or destroyed public
facilities, they might apply for an in-lieu contribution rather than seek reimbursement
for the cost of replacement or repairs. Congress might consider extending such
authority to other federal assistance programs, such as the Individual Assistance
program, SBA disaster loans, and CDBG, which limit federal assistance to specific
activities. Such an option could allow individuals, small businesses, and
governments to better adapt federal assistance to meet their unique needs. On the
other hand, it could generate problems in assuring accountability of federal funds.
A related option would be to allow federal agencies, upon request from a
recipient government, to deobligate funds for one activity and obligate them to
another activity. Some observers have suggested that this option would allow New
York City and New York state more flexibility in using federal funds for recovery
projects. For example, one specific recommendation from observers is to use funds
remaining from the debris removal phase (completed under budget and ahead of
schedule) for transportation projects. The latter might be the most costly of the city’s
While plans are still under discussion, it appears that city and state officials in
New York might seek flexibility within the requirements of federal programs. The
LMDC stated in its preliminary blueprint that it will not seek to replicate the former
urban landscape, but design a new lower Manhattan that will better accommodate
mass transit systems, encourage residential development, promote commercial
enterprises, and create urban parks.131 Existing federal requirements that would bind
grantees to past development patterns or practices might be reconsidered.
Pro. In some cases, waiving or modifying certain statutory and regulatory
requirements could expedite the delivery of federal assistance, which could
subsequently expedite the recovery process. Also, it could allow states and localities
to better adapt federal assistance to their particular recovery plans.
This option might also allow federal agencies to better assist areas threatened
by terrorism. The existing authorities governing disaster assistance might not be
appropriate for dealing with terrorist attacks, because many of the programs were
created to respond to natural disasters, which typically strike a given area and then
dissipate. Terrorist attacks, however, could be continuing incidents with lasting
effects that require different types of aid. Multiple or successive attacks could occur
in one community, possibly requiring greater flexibility in recovery efforts.
Con. If federal agencies have discretion in waiving or modifying statutory
requirements, federal recovery programs might not be applied pursuant to
42 U.S.C. 5172.
Edward Wyatt and Randy Kennedy, “$7.3 Billion Vision to Rebuild Transit Near Ground
Zero,” The New York Times, April 20, 2002, p. A1.
Lower Manhattan Development Corporation, “Principles and Preliminary Blueprint for
the Future of Lower Manhattan,” April 9, 2001, available at the LMDC Web site,
[http://www.renewnyc.com], visited June 10, 2002.
congressional policy objectives. Compliance with congressional economic
development or environmental protection goals could be disregarded or minimized
in favor of satisfying state and local recovery needs. Expanding waiver authority
could also inhibit the ability of federal officials and Congress to evaluate the
efficiency and effectiveness of assistance programs. It could also create problems in
tracking and accounting for funds.
Establish Requirements for Public Participation. Given the large
number of stakeholders in New York City’s recovery, the complications of
recovering from other terrorist attacks, and the substantial amount of federal
assistance that will fund recovery projects, Congress might establish requirements for
The LMDC and the Port Authority have established an accelerated planning
schedule. The two organizations expect to have six proposed land-use plans appoved
by July 1, 2002, and a final plan in place by December 1, 2002. Some observers have
stated that this schedule does not allow enough time for planning officials to receive
public input or for designers to formulate proposals.132 The LMDC and Port
Authority, however, have released a schedule of public forums and comment periods
that will continue through the remainder of 2002 in order to obtain viewpoints of
many interested parties.133
Other observers have criticized city and state officials in New York for
establishing an LMDC governing board that they believe is not conducive to public
participation. Specifically, stakeholder groups such as families of victims and local
residents have argued that the LMDC board should contain representatives of their
groups. At the time of this writing, the board did not include a family member of a
victim or a resident of lower Manhattan. The LMDC, however, has attempted to
incorporate input from these and other groups by forming advisory councils
exclusively for such groups as victims’ families, residents, and small business
owners. Some observers believe that excluding these stakeholder groups from the
LMDC’s board is inappropriate.134
Pro. Establishing requirements for public participation might better ensure that
recipients of federal assistance, including New York state agencies, New York City,
and the LMDC, receive and consider the range of viewpoints during the various
phases of the city’s recovery. It could also ensure that planning officials consider
input from the broad range of stakeholders. Establishing such requirements could
also serve as a model for public participation in future large-scale recovery efforts.
Con. It is possible that setting requirements for public input could lengthen the
planning process since planning officials might have to receive and analyze more
William Neuman, “What’s the WTC Rush?” New York Post, May 7, 2002, at:
[http://www.nypost.com/news/regionalnews/47301.htm], visited June 11, 2002.
Available at LMDC web site: [http://www.renewnyc.com], visited May 24, 2002.
Iken, “WTC Agency Ignores Families,” May 6, 2002; Paul Goldberger, “Groundwork:
How the Future of Ground Zero Is Being Resolved,” The New Yorker, May 20, 2002, pp.
suggestions from citizens representing competing interests. Some observers have
suggested that, with such a broad range of stakeholders, a consensus approach to
lower Manhattan’s new design ultimately might not satisfy some of the city’s goals
such as economic revitalization and construction of an appropriate memorial to
victims.135 It might also be characterized by some as substituting federal judgements
for those more appropriately made at the state and local levels.
Promote Pre-Disaster Recovery Planning. Congress has authorized the
President to assist states in preparing for disasters, including planning for recovery
of damaged or destroyed facilities.136 At present, FEMA encourages states to include
recovery planning in their comprehensive plans. Should Congress decide further
effort is needed, it could promote pre-disaster recovery planning by increasing
funding for disaster planning grants and authorizing funds for recovery training and
Pro. This option could encourage states to develop new (or enhance existing)
plans for disaster recovery. The “Recovery Annex” in the Federal Response Plan
endorses this concept, stating, “Before a disaster, interagency planning and
coordination provide a foundation for strengthening relationships among Federal and
State agencies, voluntary organizations, and private sector entities ....”137
Con. Some states, perceiving themselves to be at little risk of terrorist attacks,
might find other, arguably higher priorities, for the funds. In addition, pre-disaster
recovery training and assistance activities would likely involve federal officials
experienced in disaster relief. It is possible that assigning them to provide such
assistance could detract resources from other federal emergency management
Tony Coles, “Ground Zero: Get Moving,” New York Post, May 3, 2002, p. A10.
42 U.S.C. 5131(b).
FEMA, Federal Response Plan, p. RF-3.
Expedited Public Health Studies138
Issue Summary. Exposure to chemical, biological, and/or radiological
(CBR) agents released in a terrorist situation can threaten victims’ health for some
time after exposure. Careful monitoring of the health of victims by academic
researchers, in addition to federal agency monitoring efforts, as soon as possible after
exposure could be useful in quickly determining regimens that would help the
victims recover most successfully. Such monitoring practices could also advance the
state of medical knowledge and public health policies and procedures and assist
public officials responsible for negotiating liability and damage issues.
Many academic health researchers and other professionals not affiliated with
government agencies and research laboratories might choose to delay the start of
health monitoring until funding is secured. Conventional funding processes, such as
applying for study grant money, often requires time-consuming review and clearance
procedures. Early opportunities to begin monitoring victims’ health and to gather
relevant exposure information could be lost while applications are in process.
Congress might elect to consider changes to current federal law to authorize
expedited funding for public health studies, particularly after terrorist attacks that
potentially increase public health concerns.
Issue Analysis. Federal administrative requirements associated with the
provision of federal assistance after a major disaster can be waived in a major
disaster by any federal agency if requested by the applicant state or local authorities
pursuant to Section 301 of the Stafford Act.139 At issue here is not typical disaster
assistance per se, but expeditious funding for researchers in the private sector so that
they might conduct health monitoring studies while optimum (although potentially
tragic) conditions exist. Whereas the waiver authority in Section 301 applies to
requests made by state and local authorities, qualified health researchers and other
professionals might seek such authority to expedite the data-collection and analysis
Application to Terrorist Attacks. Impacts on human health began from the
moment of the attacks.140 Victims were exposed to chemical, physical, and
psychological hardships during and after the September 11th attacks. At the WTC,
asbestos and other substances were airborne and landed on animate and inanimate
surfaces. Many people may have been exposed to these potentially health-threatening
Written by Michael Simpson, Resources, Science, and Industry Division.
42 U.S.C. 5141.
Department of Health and Human Services, Centers for Disease Control, “Assessment of
Injuries Among Survivors of the Terrorist Attack on the World Trade Center—New York
City, September 2001,” MMWR Journal Weekly, vol. 51, Jan. 11, 2002, pp. 1-5; Trudy
Berkowitz, Mt. Sinai School of Medicine, telephone conversations with the author, Jan.Feb., 2002.
substances. In addition, residents and workers experienced psychological stresses
related to the attacks; some may show evidence of that stress for years.141
As the consequences of the attacks on the survivors became known, various
private sector medical, public, and occupational health researchers and other
professionals recognized the need and unique opportunity to monitor the physical and
psychological health of victims. Studies were seen to be needed to determine the best
regimens for recovery, to add to medical and public health knowledge, and to provide
facts for possible future efforts to address health as well as liability issues.
Despite the recognition of the needs and opportunities, some researchers
postponed initiation of their studies until funding could be secured.142 In the process,
some opportunities for gathering data from victims and from the field may have been
lost. As one example, pregnant women exposed to airborne emissions around the
World Trade Center are being monitored for health effects of various substances
including polychlorinated biphenyls, dioxins, furans, polycyclic aromatic
hydrocarbons, lead, cadmium, and mercury. However, women who delivered their
babies prior to the start of the study were excluded from the study cohort. Additional
funding has been applied for to allow monitoring the babies’ health to two years of
age to assess possible effects of exposure on growth and development.143
Background. The Department of Health and Human Services (HHS)
administers approximately 300 grant programs. Most of the grants are funded in a
decentralized manner by several HHS agencies, including the National Institutes of
Health and the Health Resources and Services Administration. Announcement and
review guidelines help ensure that limited research grant funds are awarded fairly.144
In general, considerable time is required to comply with the routine guidelines or
rules for the programs. Under very unusual circumstances, sometimes involving
interactions with foreign governments, a different set of procedures can be followed.
It is possible, for example, for the secretary of HHS to designate that a “sole source”
shall receive funds to perform a specific task.145
One study examined victims of “floods, earthquakes, and hurricanes” and found that
natural disasters increased suicide rates for flood victims “in the four years after floods by
13.8 percent” and “in the two years after hurricanes by 31.0 percent,” but “suicide rates did
not change significantly after tornadoes or severe storms.” Etienne G. Krug, M.D., and
others, “Suicide After Natural Disasters,” The New England Journal of Medicine, vol. 338,
Feb. 5, 1998, p. 373-378.
Trudy Berkowitz, Mt. Sinai School of Medicine, telephone conversations, Jan.-Feb. 2002.
Frederica Perera, Mailman School of Public Health, Columbia University, telephone
conversations, Jan.-Feb., 2002; Trudy Berkowitz, Mount Sinai School of Medicine,
telephone conversations, Jan.-Feb., 2002.
Details about HHS grants can be found at [www.hhs.gov/grantsnet/grantinfo.htm], visited
June 11, 2002.
The applicable statutory authority authorizing one type of sole source procurement is 41
USC 253 (c) (1), as set forth in FAR 6.302-1.
Authority somewhat analogous to proposals to expedite the application process
for studies is suggested in P.L. 107-188, the “Public Health Security and Bioterrorism
Response Act of 2001.” That statute authorizes the HHS Secretary, during a public
health emergency, to transfer funds between appropriations accounts without lengthy
waiting periods. Another legislative option (S. 1621), pending before Congress,
would authorize the President to “carry out a program for the protection, assessment,
monitoring, and study of the health and safety of community members, volunteers,
and workers in the disaster area.”
Policy Options. Congress might consider the extent to which, or whether,
existing federal policies pose an obstacle to efforts to examine the health effects of
terrorist attacks. Some of the options that might be considered by Congress include
Maintain the Status Quo. One policy option is to keep, without change,
current policies and procedures regarding funding for health studies. If Congress
elects not to consider legislation on this issue, conventional announcement and
review procedures would continue to be used to be followed.
Pro. It takes time and human and material resources to create a scientifically
sound study of physical and psychological health effects of exposure to physical and
psychological hardships and to review and refine such a proposed study. Proponents
of the status quo may contend that limited federal private research grant funds should
be reserved for studies that have been thoughtfully and carefully created and
reviewed. Holders of this view might argue that data losses incurred while creating
and reviewing research funding applications are not worth jeopardizing conventional
procedures meant to protect objectivity and quality of research.
Con. Those who perceive the need for modifications to existing policy might
argue that conventional scientific peer review prevents the loss of objectivity and
quality in the performance of expedited health studies. In some situations, they may
argue, the data lost while securing funding in conventional ways could be significant,
and that explicit provision for expedited funding is needed to help insure the most
complete knowledge base possible.
Amend the Public Health Service Act. Another option might be to amend
Section 319 of the PHS Act to permit the secretary during a public health emergency
to accelerate reviews of grant applications and related funding mechanisms.146 The
Secretary could be given discretion to award research funds without lengthy waiting
periods in the aftermath of severe emergencies or disasters.
Pro. Proponents believe that an amendment to the PHS Act would contribute
to maximizing the knowledge base from which determinations are made regarding
the best regimens to help victims recover physically and psychologically from a
terrorist attack. They assert such studies could add to medical and public health
knowledge of causes of illnesses, the progression and manifestation of health
impacts, and the range and effectiveness of remedies.
42 U.S.C. 247d-3.
Con. Those who oppose an expedited review procedure may argue that
expedited funding could waste limited federal resources on hasty health studies of
inferior scientific quality. Moreover, findings of inferior scientific quality could
pollute the knowledge base and complicate future efforts to address liability and
damage issues associated with terrorist attacks.
Tracking Federal Costs of Disasters147
Issue Summary. Information on federal disaster assistance costs likely will
be of interest in congressional assessments of current disaster assistance policies and
their application to future terrorist attacks. Cost data might be used to compare
benefits provided from one disaster (including terrorist attacks) to another, to monitor
the expenditure and use of federal funds, and to establish budget priorities and
estimates. At present, individual federal agencies might report to Congress in the
annual budget requests on the obligations they have made on preparedness, response,
recovery, or mitigation activities. However, information is not collected in a
comprehensive or consistent fashion.
Many, if not all, congressional appropriations subcommittees have jurisdiction
over agencies that provide disaster assistance. The issue before Congress is whether,
and to what extent, federal resources should be committed to tracking federal costs.
Among the options it may elect to consider, Congress might choose to mandate that
the executive branch collect and publish federal emergency management cost data,
consolidate such information based on each agency’s submissions, or establish a
common reporting framework to be used by the agencies.
Issue Analysis. The need for comprehensive data on federal disaster
expenditures has been discussed by Members of Congress as well as researchers and
administrators in the emergency management field.148 The tremendous costs of
responding to and recovering from the terrorist attacks of September 11 might result
in additional requests for such information, particularly as Congress makes budget
allocation decisions among pressing needs.
Application to Terrorist Attacks. The attack on the WTC and the
Pentagon might have resulted in the most expensive disaster assistance effort in the
nation’s history. FEMA work constitutes just one part, although a significant
element of, the federal effort. The FEMA budget justification for FY2003 notes that
“response and recovery efforts have been, and continue to be, massive, as are the
projected financial costs, which are expected to eventually approach $9.5 billion.”149
Before the attack, the highest level of FEMA obligations for a single disaster
was $7 billion provided to California after the Northridge earthquake in 1994.150 The
costs of consequence management associated with September 11 might be compared
to an entire year’s obligations. The disaster assistance costs associated with
Written by Keith Bea, Government and Finance Division.
For example see: U.S. Congress, House Committee on the Budget, Task Force on Budget
Process, Budgetary Treatment of Emergencies, hearing, 105th Cong., 2nd sess., June 23, 1998
(Washington: GPO, 1998).
U.S. Federal Emergency Management Agency, Justification of Estimates FY2003
(Washington, 2002), p. DR-5.
Ibid., p. DR-7.
September 11 appear to be almost twice the amount obligated for “the decade high
total of $4.4 billion” in FY1999.151
The emergency supplemental legislation enacted after September 11 requires
that OMB report to Congress on funds provided in response to the September 11
attacks.152 Accordingly, OMB collects comprehensive data on obligations committed
with the $40 billion appropriation. As of March 31, 2002, of the $40 billion
appropriated, $18.275 billion had been obligated, $11.6 billion (63%) by the
Department of Defense. Of the $6.7 billion obligated by the other federal agencies
as of that date, $1.1 billion had been obligated by FEMA; $1.7 by the HHS for health
care expenses and counseling; and other departments and agencies obligated less than
$1 billion each for disaster recovery assistance.153
While the quarterly report issued by OMB contains some information on federal
disaster assistance costs, it could be perceived to provide insufficient detail to enable
Members of Congress to discern the particular purposes for which funds have been
used, and might raise additional questions about federal disaster assistance priorities.
Brief summary information on obligations is presented for some agencies, but not for
all. For example, the $2 million obligated by the Economic Development
Administration of the Department of Commerce “will be used to support business
development assistance programs.” To what extent are those programs linked to the
September 11 attacks? The destination or potential use of these funds is not
indicated.154 Also, considerable controversy has been reported regarding the needs
of the educational system in New York City.155 Some claim that needs have not been
met. However, no obligations had been made by the U.S. Department of Education
(ED) as of March 31, 2002, and all of the funds will not be used in New York City.
According to the OMB report:
The Department of Education expects to obligate $5 million of its $10 million
in emergency funds for the NYC areas by the end of May. No obligations have
been made because the Department has not determined the relative funding
U.S. Federal Emergency Management Agency, Justification of Estimates Fiscal Year
2002 (Washington: 2001), p. DR-5. In FY1999 a total of 103 declarations were issued, as
follows: 40 major disasters, 5 emergencies, and 58 fire suppressions. Historical data on
FEMA disaster relief obligations are presented in CRS Report RL31359, Federal
Emergency Management Agency Funding for Homeland Security and Other Activities, by
“That the Director of the Office of Management and Budget shall provide quarterly
reports to the Committees on Appropriations on the use of these funds, beginning not later
than January 2, 2002:” P.L. 107-38.
U.S. Office of Management and Budget, “Report on Expenditures from the Emergency
Response Fund,” amounts as of March 31, 2002 (Washington: 2002).
Note that information such as this may justifiably not be expected in summary reports
provided by OMB, but may be available from each agency. This, however, raises the issue
of the degree of effort Congress would be expected to exercise in order to obtain
information on the use of appropriated disaster assistance funds.
For example, see: Michelle Davis, “New York Schools, U.S. Officials at Odds Over 9/11
Aid,” Education Week, May 15, 2002, vol. 21, pp. 24, 26.
allocation for NY City, NY State, Connecticut and New Jersey. The Department
has no specific plans to obligate the remaining $5 million in emergency funds.
Congress instructed the Department not to spend all of its emergency funds on
September 11th response, but instead use a portion of the funds for other
jurisdictions and emergencies.156
In summary, while the reports issued by OMB pursuant to the congressional directive
provide information on tracking total obligations, they might be considered deficient
for purposes of assessing the intended use of the funds.
If other terrorist attacks were to occur in the future, Congress might ask for and
require data on total federal obligations from the responding agencies in order to
monitor the flow of federal funds and establish funding priorities. The need or
usefulness of such an extensive database, however, might be debated. Such a
database could help Congress estimate the funding that might be needed and to
allocate funds among competing accounts. However, the establishment of a data
baseline on past and ongoing expenditures might arguably be unnecessary as
Congress would likely meet all eligible costs for which victims are entitled to receive
Near unanimous statements have been issued by officials and analysts that other,
more costly, attacks should be anticipated. Accordingly, it may be necessary for
Congress to begin to collect information on disaster assistance payments in order to
make decisions regarding disaster costs. For example, Congress might use the
information to set priorities among needs unmet due to a variety of reasons, including
the type and extent of damage suffered by a community or the potential threat of
future attacks.157 The information might also be used to reassess budget priorities,
evaluate the future viability of cities damaged by nuclear attacks, or make other
Background. FEMA is only one of several federal agencies that provide
federal disaster assistance after terrorist attacks and other disasters. Depending on
the type of devastation and the area affected, the Departments of Agriculture,
Defense, HUD, Commerce, and Transportation, the SBA, and the Environmental
Protection Agency (EPA) are among other federal agencies that have obligated and
will continue to obligate billions of dollars for disaster assistance. While data on
disaster obligations are generally maintained and available from each federal
department or agency, total federal disaster assistance obligations are not collected
or disseminated on a regular basis.
Following devastating disasters in 1989 and the early 1990s (Hurricane Hugo,
the Loma Prieta earthquake, Hurricane Andrew, the Midwest floods), some Members
of Congress expressed concern about the rising costs of federal disaster assistance.
Bipartisan leadership task forces were established in both the House and the Senate
“Report on Expenditures from the Emergency Response Fund.”
Reconstruction of the WTC complex in lower Manhattan could invite future “copycat”
attacks. See: Blair Kamin, “Skidmore Eyes Huge Skyscraper to Replace NYC’s Twin
Towers,” Chicago Tribune, June 6, 2002, p. 1.
in 1993 to collect data and consider policy options. The reports issued by the task
forces provided comprehensive information on federal disaster costs and policies.
The House Task Force on Disasters recommended that Congress seek data on
disaster costs as follows:
Congress should request data on the cost of all phases of disasters, including the
cost to federal taxpayers of the tax deduction for casualty losses from disasters.
This information has never been comprehensively gathered, and as a result it is
not known how much the nation pays for all phases of disasters, particularly the
recovery phase which can take several years.158
The report issued by the Senate Task Force on Funding Disaster Relief, published
more than a year after the House report was completed, contained perhaps the most
comprehensive information on federal disaster assistance costs that has yet been
compiled. The Senate report included the results of a survey conducted by the
General Accounting Office of federal disaster assistance obligations made from fiscal
year 1977 through 1993.159 Table 2, below, presents information drawn from that
compilation for the 10-year period FY1984-FY1993. Data are presented for federal
programs in accordance with the four major phases of disaster assistance:
preparedness, mitigation, response, and recovery.
U.S. Congress, House Bipartisan Task Force on Disasters, Report [unpublished]
(Washington: Dec. 14, 1994), p. 12.
U.S. Congress, Senate Bipartisan Task Force on Funding Disaster Relief, Federal
Disaster Assistance, S. Doc. 104-4, 104th Cong., 1st sess. (Washington: GPO, 1995).
Table 2. Federal Disaster Assistance Obligations, FY1984-1993
(millions of dollars)
Source: U.S. Congress, Senate Bipartisan Task Force on Funding Disaster Relief,
Federal Disaster Assistance, S. Doc. 104-4, 104th Cong., 1st sess. (Washington: GPO,
1995), p. 5.
The data collected for the Senate task force report provides a snapshot of costs,
a picture of federal funding that had previously not been available. Some may
perceive the data in the Senate task force report to have little relevance to the needs
of the 107th Congress, and future Congresses, as budget needs and priorities are
considered and established. On the other hand, one researcher who has long
considered the issue of emergency management policies and activities asserts:
What is needed is a comprehensive database that contains information
about (1) current levels of vulnerability to natural hazards on national and local
scales, (2) compilations of past losses, and (3) the costs of pre-event mitigation
activities.... Previous loss records only indicate in a general way the overall scale
and scope of the problem. Monetary losses have not been systematically
assessed, nor have the economic ramifications of a disrupted social structure
been compiled. The next generation requires better delineation of the types and
extent of losses in specialized categories. A national loss inventory would
document losses from past and current natural disasters, thereby establishing a
baseline for comparison with future losses. Data on the type of loss, location,
specific cause of the loss, and actual dollar amounts needs to be compiled in a
uniform fashion for across-hazards comparisons.160
Dennis S. Mileti, Disasters by Design (Washington: Joseph Henry Press, 1999), p. 102103.
Policy Options. If Congress wished to require the collection and
dissemination of federal disaster assistance costs, including those costs associated
with terrorist attacks, Members might could consider the following options.
Maintain the Status Quo. Congress might take no legislative action and
rely on periodic surveys such as the one completed by GAO and published in 1995
by the Senate, or on special reports issued by OMB pursuant to legislative mandates
such as those included in P.L. 107-38.
Pro. Some may argue that the costs associated with the collection of the
information would be better spent on disaster assistance itself or on other needs.
Historically, Administration requests for disaster funding are not contentious issues
of debate in Congress, and some may contend that, regardless of the costs, Congress
will appropriate funds needed for disaster recovery.
Con. Escalating costs involved in the terrorism conflict may require Congress
to make difficult decisions among high level priorities. A lack of systematic data on
federal assistance after terrorist attacks might complicate the establishment of budget
priorities. If, as directed by the President, the proposed Department of Homeland
Security (DHS) coordinates a national strategy to combat terrorism, the existence of
comprehensive data could enable Congress to better evaluate and decide among
Administration budget requests.
Require OMB to Collect and Report Data. Legislation might be
considered to require OMB to collect data on federal disaster assistance costs each
year and publish the information in the Budget Appendix.
Pro. OMB receives expenditure data from all federal agencies in order to
compile the President’s budget each year. As part of that process, OMB could direct
agencies to provide data in a standardized format on emergency management
expenditures (obligations, outlays, or both) made each fiscal year.
Con. Additional funds likely would be requested from federal agencies, and
OMB, to collect this information. Also, a standardized format to be used by all
federal agencies might not be easily developed as different forms of assistance such
as loans, insured loans, grants, and technical assistance are provided to disaster
victims, depending on the needs of the stricken communities.
Department of Homeland Security Requirement. The task of
developing a database on federal consequence management costs could be assigned
to the Department of Homeland Security when Congress debates legislation (H.R.
4660/S. 2452, inter alia) to implement the President’s proposal.
Pro. The department would have the authority and the purview to collect
federal obligations in a uniform fashion from all agencies. Such data could be used
by congressional appropriators charged with oversight of the department.
Con. The Department of Homeland Security will likely be assigned a range of
missions and functions that impinge on questions of continuity of government and
national security. The collection of data on federal assistance might be considered
a low priority for the new organization.
Local Government Revenue Loss161
Issue Summary. Areas struck by disasters or terrorist acts often experience
a decline in economic activity, and, consequently, a reduction in tax collections for
affected local governments. However, the financial and public service obligations
of local governments persist and may actually increase after the catastrophe. The
unexpected loss of revenue, coupled with the increased financial burden of
responding to a terrorist act or natural disaster, often leads local governments to
request assistance from both the state government and the federal government.
The Stafford Act authorizes financial assistance to local governments that face
tax revenue losses as a result of a major disaster. Congress might elect to modify the
existing authority in light of the needs of communities that could be devastated by
Issue Analysis. Generally, local governments maintain a capital budget and
an operating budget. The capital budget, which is financed with debt for public
infrastructure spending, is usually kept separate from the operating budget. The
operating budget matches current expenditures with current revenues and is meant
to be balanced every fiscal year. Deficits in the operating budget are not usually
financed with debt. As a result, a sudden loss of revenue, without a corresponding
drop in current expenditures, is difficult for local governments to overcome.
The Community Disaster Loan (CDL) program, authorized by the Stafford Act
and administered by FEMA, assists local governments that lose tax revenue after a
major disaster. The objective of the CDL program is to help
... any local government which may suffer a substantial loss of tax and other
revenues as a result of a major disaster, and has demonstrated a need for financial
assistance in order to perform its governmental functions.162
The loans are intended to help local governments finance governmental functions by
replacing lost tax revenue after a disaster interferes with or diminishes economic
The CDL program allows for loan forgiveness when it is apparent (in the
judgment of the independent auditors hired by FEMA and FEMA staff) that the
affected government will not be able to service the loan. Loan forgiveness, or the
anticipation of a cancelled loan, may be one significant reason local governments
participate in the CDL program.
Application to Terrorist Attacks. The effect of terrorist attacks on
economic activity is similar in many ways to the effect of natural disasters. Revenue
Written by Steven Maguire, Government and Finance Division.
42 U.S.C. 5184
from local income, property, and sales taxes will almost certainly decline when
terrorist attacks take lives, destroy buildings, and disrupt commerce. If, as occurred
in New York and Virginia after September 11, a major disaster declaration is issued
after a terrorist attack, affected local governments may be eligible for CDL
assistance. Attacks as significant as those of September 11 may merit greater aid
(more than the current CDL program allows) given the magnitude of the destruction.
For example, the New York City comptroller estimated that tax revenues in FY2002
would be “... $738 million less than currently projected,” as a result of the attacks.163
To date, unlike some natural disasters, the physical effects of recent terrorist acts
have been concentrated in relatively small geographic areas. The physical impact of
the September 11 attacks affected concentrated areas of New York City, NY,
Arlington, VA, and Stony Creek Township, PA. Similarly, the destruction in 1995
of the Murrah federal building affected a portion of Oklahoma City. In contrast,
some natural disasters, such as severe hurricanes, tornados, and floods have affected
many local governments in several jurisdictions. The limited boundaries of areas
affected by terrorist attacks may change. In the future, terrorist acts may affect larger
and less defined areas across political jurisdictional boundaries. The effect of these
types of terrorist acts would more closely resemble that of large natural disasters,
such as those affected by catastrophic earthquakes and hurricanes.
Background. Local governments in a declared major disaster area (states are
not eligible) can apply for a CDL of up to 25% of their operating budget for the fiscal
year in which the disaster occurred. The implementing regulation stipulates that the
... shall include ... copies of the local government’s financial reports (Revenue
and Expense and Balance Sheet) for the 3 fiscal years immediately prior to the
fiscal year of the disaster and the applicant’s most recent financial statement
must accompany the application.164
The maximum loan amount is $5 million; before 2000, there was no limit.165 In
general, the jurisdiction may draw down the loan in increments as prescribed in the
promissory note for up to five years. The associate director of FEMA, under special
circumstances, may extend the loan term to 10 years.166
New York City Comptroller, “Trade Center Attack Could Cost City Economy More Than
$100 Billion Over 2 Years: City Will Need Additional Federal Aid To Recover,” press
release, Oct. 4, 2001. The press release is available at the following website:
[http://comptroller.nyc.gov/press/2001_releases/print/01-10-064.shtm], visited May 15,
2002. The Federal Reserve Bank of New York seems to agree with the $738 million
estimate, noting that the “New York City Comptroller’s initial estimate of the attack-related
tax revenue losses to the city, on the order of $600 million in the fiscal year ending in June,
appears reasonable; a similar amount is expected to be lost in the next fiscal year.” From
document accompanying a letter from William J. McDonough, President, Federal Reserve
Bank of New York, to The Honorable Carolyn B. Maloney, April 18, 2002, p. 7.
44 CFR 206.364(b)(1).
P.L. 106-390 imposed the $5 million limit.
According to 44 CFR 206.361(e), the loan can be extended even beyond the 10 years
The interest rate on CDLs is based on the five-year Treasury bill rate on the date
of the loan approval. On June 7, 2002, the average interest rate (yield) on five-year
municipal bonds was 3.40% and for five-year Treasury notes the average yield was
4.32%.167 The interest rate on CDLs is higher than the average rate on municipal
(state and local) bonds. Generally, municipal debt carries a lower interest rate
because the interest is not included in the holder’s taxable income. The tax
exemption of state and local government bond interest allows the issuing
governments to issue bonds with lower interest rates.
Since 1976, officials administering the CDL program have approved 64 loans
(four of which were withdrawn by the applicant before any funds were disbursed,
thus only 60 loans were made) to local governments that experienced significant
revenue losses from a declared disaster (see Table 3, below, for summary information
on the CDL program).168 Of the 60 loans made, 12 have been completely cancelled;
all principal and any interest owed by the borrower was forgiven. Cancellation is
allowed under the statute.169 Regulations governing implementation of the Stafford
Act provide that FEMA shall:
“... cancel repayment of all or part of a Community Disaster Loan to the extent
that the Associate Director determines that revenues of the local government
during the full three fiscal year period following the disaster are insufficient, as
a result of the disaster, to meet the operating budget for the local government,
including additional unreimbursed disaster-related expenses for a municipal
Pursuant to this regulation, FEMA has the discretion to cancel all principal and
interest due on a CDL or on some portion of CDL principal and interest. As of
December 31, 2001, $97.9 million of principal and interest on CDLs had been
cancelled (almost 42% of total disbursements).171 Table 3 shows the amount of
cancelled principal and interest as a percentage of disbursed funds.
under extenuating circumstances. Also, as exhibited in Table 3 of this report, the entire loan
or parts of the loan principal and interest can be cancelled.
The two interest rates (or yields) are from the following web sites: municipal bonds,
[http://www.bloomberg.com/markets/psamuni.html]; and five-year Treasury notes,
[http://www.bloomberg.com/markets/C13.html]. Sites visited April 23, 2002. Since 1976,
the average monthly rate on mixed grade municipal bonds with long term maturity (20
years) was 7.1%; for five-year Treasury bills, the average monthly rate was 8.0%. Data are
from: [http://www.federalreserve.gov/releases/H15/data.htm#top], site visited April 23,
FEMA Program Specialist Gerry Miederhoff said in an interview with CRS on March 23,
2002, that no application has been declined.
42 U.S.C. 5184(c).
44 C.F.R. 206.366.
Four cancellations account for almost four-fifths of the total. Those loans were issued to
the U.S. Virgin Islands after hurricane Hugo ($33.2 million); Kauai, HI, after hurricane Iniki
($19.1 million); Homestead City, FL, after hurricane Andrew ($13.5 million); and American
Samoa after hurricane Val ($12.0 million).
Table 3. Summary of CDL Program, 1976 to 2001
Amount of Principal and
Principal and Interest as
Percent of Disbursed Funds
Source: FEMA data provided by FEMA program specialist Gerry Miederhoff, and CRS calculations,
as of Dec. 31, 2001.
Four additional loans were approved but later withdrawn by applicants.
Cancellation authority under the CDL program follows on the precedent enacted
by Congress in the Disaster Relief Act of 1970 (the 1970 Act).172 The deferred grants
authorized by the 1970 Act were in response to the “... extensive property damage
and a loss of tax base ...” in the aftermath of Hurricane Camille.173 After a series of
hearings following Hurricane Agnes in 1972, the deferred grant program was
converted into a loan program under the Disaster Relief Act of 1974 (the 1974
Act).174 In the 1974 Act, the original deferred grant program “... was retained as the
cancellation feature of the [new CDL] program.”175
It appears that the current CDL program is significantly underutilized given the
number of disasters and affected jurisdictions.176 Since 1976, there have been 906
declared major disasters, many of which affected multiple jurisdictions per disaster.
However, only 64 loans resulting from 19 separate disasters have been approved.177
If the policy objective of the CDL program is to help “... any [emphasis added] local
government which may suffer a substantial loss of tax and other revenues as a result
of a major disaster,” the relatively low utilization rate of CDLs may indicate that this
objective has not been achieved.
Disaster Relief Act of 1970, P.L. 91-606, 84 Stat. 1756.
U.S. Congress, House Committee on Appropriations, Subcommittee on VA, HUD, and
Independent Agencies, Departments of Veterans Affairs and Housing and Urban
Development and Independent Agencies Appropriations for 1998, hearings, part 4, 105th
Cong., 1st sess., March 6, 1997 (Washington: GPO, 1997), p. 91.
P.L. 93-288, 88 Stat. 158.
Departments of Veterans Affairs and Housing and Urban Development and Independent
Agencies Appropriations for 1998, p. 91.
Alternately, the low utilization rate may indicate that few local governments need
assistance following a declared major disaster.
FEMA, Total Major Disaster Declarations, at: [www.fema.gov/library/dis_graph.htm],
visited April 2, 2002.
Another possible contributing factor to the low utilization of CDLs is the FEMA
guidance that participants establish a sinking fund for the CDL.178 (Sinking funds are
generally used for eventual retirement of a loan.) The money allocated to the
recommended sinking fund would increase the cost of the CDL to the local
government. In addition to the sinking fund, the relatively higher interest rates for
CDLs and the uncertainty surrounding the probability of a loan cancellation may be
other explanations for the low ratio of loans made to disasters. Table 4 provides
more details of the outcomes of loans made under the CDL program.
Table 4. Summary of CDLs by Current Status, 1976 to 2001
Number of FEMA
Loans by Status
Amount of Loan:
Amount of Principal and Interest:
1 debt collection
1 written off
Source: FEMA data and loan status information provided by FEMA program specialist Gerry
Miederhoff, and CRS calculations, as of Dec. 31, 2001.
Reflects amount of principal and interest cancelled for loans still in repayment as of December 31,
Total number does not include four loans withdrawn by applicants.
As of December 31, 2001, a significant amount of principal and interest on loans still in repayment
was still accruing. Therefore, the amount of principal and interest paid and cancelled accounts for
only a portion of the total amount approved and disbursed.
Policy Options. In the short run, reduced economic activity in the aftermath
of a natural disaster or major terrorist act typically leads to reduced local tax revenue.
However, the need for government services does not decline along with the drop in
tax revenue, but may increase after a disaster. Through the Disaster Relief Act of
1974, Congress created the current CDL program for the short term budget crises that
often arise following natural disasters. It may be argued that the CDL program could
be reshaped to meet the challenge likely to be presented by terrorist acts because of
the similar budget crises attacks have on economic activity and local tax revenue.
Following are some policy options that Congress might consider.
Maintain the Status Quo. The current CDL program has approved 64 loans
from 1976 through December 31, 2001. Over this same period, there have been 906
44 CFR 206.365(a)(2).
declared major disasters. The data provided by FEMA and presented in Table 3,
seem to show that the CDL program is better characterized as a grant program with
a loan component due to the high rate of loan cancellation. Almost 42% of disbursed
funds for CDLs have been cancelled. One option for Congress is to continue with
the current CDL rules and procedures without modification, including the
ineligibility of states for CDL assistance.179
Pro. Maintaining the status quo could be achieved with little or no additional
federal cost. The relatively tight federal budget suggests that additional spending for
an expanded CDL program would necessarily lead to: reduced spending on other
priorities, higher taxes, more debt, or some combination of the three. Thus,
continuing the current CDL without changes would have minimal impact on the
federal fiscal position.
Con. Many local governments would not benefit significantly from the existing
CDL program in the event of a disaster because of the recently imposed $5 million
limit per disaster. For example, the New York City comptroller projected that tax
revenues in FY2002 will be “... $738 million less than currently projected.”180 Even
though all of the projected shortfall in New York City tax revenue may not be
directly attributable to the terrorist acts, even 25% of the revenue loss generated by
the attacks would greatly exceed the current $5 million CDL cap. In addition, state
revenue loss needs continue to be unmet.
Authorize Grants, Not Loans. The current CDL program has served as a
de facto grant program for the 12 jurisdictions whose CDLs have been fully
cancelled. Replacing the current loan mechanism with a direct grant program is
Pro. With a grant program, immediate revenue relief could be provided without
saddling the affected areas with additional debt. Because the cost of the grant would
be shared by all federal taxpayers, the burden on the affected government would be
minimized. In addition, federal monitoring of loan compliance and loan repayment
may not be necessary with grants. Thus, relative to the current CDL program, lower
administrative costs per dollar of aid delivered are likely with a grant program. In
The Fiscal Policy Institute reports that, according to the New York state budget director,
state “...tax revenue will be down by up to $9 billion over the course of the next 18 months
as a direct result of the September 11th attacks.” Fiscal Policy Institute, “New York and the
Federal Fisc in the Aftermath of September 11th: The State and Local Impacts of Federal
Policy Options,” (New York: January 23, 2002), p. 11.
New York City Comptroller, “Trade Center Attack Could Cost City Economy More Than
$100 Billion Over 2 Years: City Will Need Additional Federal Aid To Recover,” press
release, Oct. 4, 2001. The press release is available at the following Web site:
Reserve Bank of New York notes that the “New York City Comptroller’s initial estimate of
the attack-related tax revenue losses to the city, on the order of $600 million in the fiscal
year ending in June, appears reasonable; a similar amount is expected to be lost in the next
fiscal year.” From document accompanying a letter from William J. McDonough, President,
Federal Reserve Bank of New York, to The Honorable Carolyn B. Maloney, April 18, 2002,
1997 congressional testimony, then FEMA Director James Lee Witt asked
“... then let it be a grant program if they can’t pay the money back. Why spend
all the money we are having to spend administratively to support these loans and
to have accounting firms go in and do audits of the cities or governments that are
getting the loans if they are not being repaid?”181
Con. A grant program would likely be used by more applicants and could be
potentially more expensive for federal taxpayers. The greater cost would also
redistribute more revenue from non-affected areas to affected areas. Even though
administrative costs would decline with grants, the grants might require more federal
control and oversight on the use of funds. Administrative compliance might increase
the implicit cost of the grant program.
Change the CDL Interest Rate. Modification of the CDL program to make
the loans more attractive would serve more governments that have experienced
revenue shortfalls after declared major disasters. Greater use of the program could
result from lower CDL interest rates.
Pro. Existing administrative structures could easily be adapted to allow for
lower interest rates. For example, FEMA could implement a different interest rate
base, such as a fixed amount (basis points) below the host state’s (or local
government’s) current five-year bond rate. Such a change would reduce the burden
on the borrowing government.
There would be other benefits to modifying the interest rate on the CDLs.
Linking the CDL interest rate more clearly to the underlying credit rating of the
borrowing government would reduce the adverse selection that may exist under the
current program.182 As noted previously, the average municipal bond interest rate is
lower than the CDL rate. Thus, it seems that only those jurisdictions with lower than
average credit ratings, and higher than average interest rates, would be attracted to
the CDL program.
Con. A lower interest rate would, by design, increase the attractiveness of the
CDL program to more units of local government. The increased demand that might
result would increase the federal cost of the program. Also, some might question
whether the federal role should be expanded when the benefits of the federal
expenditure would flow to a relatively narrow constituency.
Eliminate the $5 Million Cap. The current CDL program limits the total
amount of a loan to $5 million per jurisdiction, per event. The recently established
Departments of Veterans Affairs and Housing and Urban Development and Independent
Agencies Appropriations for 1998, pp. 64-65.
The term “adverse selection” refers to the concept in insurance markets where only those
who are likely to need insurance will purchase policies. For borrowing, only jurisdictions
with budget trouble will need to borrow.
limit would prevent large jurisdictions from benefitting significantly from the CDL
Pro. Increasing or removing the $5 million limit would likely deliver more
federal aid to large jurisdictions than would otherwise be allowed under current
authority. Because of the limit, assistance has not significantly benefited large
jurisdictions. Thus, the limit leads to a redistribution of benefits from large to small
jurisdictions that receive CDLs. Eliminating the cap would minimize this
redistribution effect. In addition, some would argue that the other cap, 25% of the
borrowing government’s operating budget in the fiscal year of the event, achieves the
objective of capping the federal exposure, albeit at a higher level.
Con. The primary argument against eliminating the cap is the greater potential
cost to the federal government. Five of the 64 CDLs approved exceeded the $5
million cap and together accounted for almost 80% of the cancelled interest (see
Table 5). The large loans seem more likely to be cancelled. As a result, removing
the $5 million cap would further increase the federal cost. Another argument against
removing the cap is the increased local reliance on federal financing of primarily
Table 5. CDLs Greater than $5 Million
(in $ millions)
Date of Event
Hurricane Hugo, U.S.V.I.
Hurricane Val, American Samoa
Hurricane Andrew, Homestead, FL
Hurricane Iniki, Kauai, HI
Hurricane Marilyn, U.S.V.I.
Total for CDLs over $5 million
(5 loan approvals)
Total for all CDLs
(64 loan approvals)
Source: Data are from Gerry Miederhoff, FEMA program specialist, as of Dec. 31, 2001.
Eliminate the CDL Program. Some argue that direct federal assistance for
lost local tax revenue via a loan program is not an efficient means of providing
assistance to affected local governments. Thus, eliminating the CDL program might
be considered a viable policy alternative.
Pro. Elimination of the CDL program would also eliminate the direct federal
revenue loss and the related FEMA administrative burden. In the absence of a
federal program, states might assume a larger role in relief efforts for communities
suffering after a natural disaster or terrorist act. State control over revenue
replacement could be a more efficient allocation and redistribution of revenue given
that the benefits of such spending will likely remain in the state.
Con. The CDL program, even with the previously noted criticisms, has
provided needed aid to several communities. Supporters of a federal role in helping
stricken communities cope with revenue losses note that “By definition, disasters
exceed the capacity of the governments whose jurisdiction they strike.”183
Amy K. Donahue and Philip G. Joyce, “A Framework for Analyzing Emergency
Management with an Application to Federal Budgeting,” Public Administration Review, vol.
61, Dec. 2001, p. 728.
Reimbursement for Security Alerts184
Issue Summary. In the immediate aftermath of the September 11 attacks the
attorney general, in coordination with the director of the Office of Homeland
Security, issued alerts to the nation that warned of threats of other terrorist attacks.
In response to the alerts, state and local agencies, including the National Guard,
established security patrols and stepped up enforcement capabilities to prevent
additional attacks. As a result, these agencies incurred overtime and other costs in
response to the alerts.
To improve the usefulness of the alerts, the OHS established a color-coded
Homeland Security Advisory System to identify the estimated likelihood that a
terrorist threat may be acted upon.185 At issue is whether or not the federal
government should help pay for security measures following an alert issued under the
Advisory System or by a responsible federal official. Related issues include whether
federal law enforcement resources should be assigned to non-federal facilities,
National Guard troops should be federalized under certain conditions, or a mission
for the U.S. military should be created to respond to the alerts.
Issue Analysis. Congress has funded and assisted state and local
governments facing emergency situations for years, including those governments
confounded by particularly complex criminal cases (such as the Atlanta murder cases
involving Wayne Williams in 1981), international threats to foreign visitors or
dignitaries (such as the visits of the Pope to the United States), and reimbursement
for law enforcement costs incurred after certain disasters (aid to the U.S. Virgin
Islands in 1989 after Hurricane Hugo). While there is less history for congressional
support for preparedness and prevention activities, some precedent exists, as
Application to Terrorist Attacks. Congress has recognized that federal
assistance is required to supplement state and local counter-terrorism efforts. Federal
aid has been provided for decades for a variety of shared law enforcement activities
related to terrorist actions in past years, notably those of international drug cartels,
interstate crime activities of organized crime syndicates, and the consequences of
suspected terrorist actions such as destruction of airliners.
Following the terrorist attacks on the World Trade Center in 1993 with a truck
bomb and the destruction of the Murrah federal building in Oklahoma City in 1995,
Congress increased the federal role in preparedness and prevention activities.
Congress appropriated $50 million in 1998 “to initiate and expand activities of the
Department of Defense to prevent, prepare for, and respond to a terrorist attack in the
Written by Keith Bea, Government and Finance Division, with contributions by Steven
R. Bowman, Foreign Affairs, Defense, and Trade Division.
See: U.S. Office of Homeland Security, “Gov. Ridge Announces Homeland Security
Advisory System,” [http://www.whitehouse.gov/news/releases/2002/03/20020312-1.html],
visited April 8, 2002.
United States involving weapons of mass destruction.”186 Another example of
federal support for domestic preparedness concerns preparation for international
Olympic events hosted in the United States. For example, the FY2001 supplemental
appropriations act included funds for security activities at the 2002 Winter
Since September 11, Congress has supported increased vigilance and enhanced
security through appropriations for the deployment of National Guard troops and
continued jet fighter patrols over New York City and Washington, D.C. Also,
roughly two months after the September attacks, Congress enacted legislation to
authorize the Department of Transportation to assume responsibility for screening
airline passengers, carry-on luggage, and checked baggage.188
The security and terrorism prevention efforts in the United States continue to be
a shared function of the federal and state governments. It is generally agreed that
federal officials and federal resources alone cannot protect the entire nation from
further attacks. State and local law enforcement officials, National Guard troops
subject to each governor’s call, as well as private security forces continue to guard
communities and potential targets. These forces comprise the largest front line of
homeland defense, and operate subject to budget decisions of state and local officials
or facility owners.
As discussion on the proposed Department of Homeland Security indicates,
certain counterterrorism activities are best undertaken by the federal government,
including the analysis and dissemination of intelligence on terrorist threats. All
officials working with intelligence information face challenges in assessing the
accuracy of the large amount of collected data, sorting and analyzing the material,
and producing useful material for key decision makers. As was widely publicized in
May 2002, questions have been raised about the intelligence process and its adequacy
prior to September 11. Fortunately, terrorist attacks that have been the subject of
warnings and announcements have not occurred.189 Unfortunately, the United States
remains at risk, and many officials generally agree that other attacks will occur in the
Background. Federal resources have been used for years to respond to
domestic emergencies. The National Guard, established over a century ago, has a
P.L. 105-277, 112 Stat. 2681-567.
“For costs of providing operational and perimeter security at the 2002 Winter Olympics
in Salt Lake City, Utah,” 115 Stat. 188.
P.L. 107-71, 115 Stat. 597.
Among the most publicized events have been reported plans by a terrorist to smuggle a
nuclear weapon into New York City in October 2001, reports later found to be false, and the
interception of an individual allegedly investigating the possible use of a radiological
dispersion device in the United States. See: Massimo Calabresi and Romesh Ratnesar, “Can
We Stop the Next Attack?,” Time, v. 159, March 11, 2002, p. 20-37; Bob Drogin, Eric
Lichtblau, and Josh Meyer, “<Dirty Bomb’ Probe Widens,” Los Angeles Times, June 12,
2002, p. A1.
joint federal and state mission and a long history, according to one report, “in
emergency management and disaster response.”190 As summarized by another
source, “Each year, in virtually every state, Guard members combat floods, forest
fires, hurricanes, snow emergencies, and civil disturbances.”191 Also, in 1984,
Congress authorized the attorney general to provide resources (funds, equipment,
information, and personnel) to state and local law enforcement agencies
overwhelmed by an emergency situation “which is or threatens to become of serious
or epidemic proportions.”192 While funding has been provided for this purpose in
past years, none has been available since FY1995.193 In addition, Congress has
appropriated funds in supplemental legislation to reimburse local law enforcement
agencies for costs associated with federal activities (police costs associated with
presidential inauguration activities)194 or for a disaster that initially was thought to be
caused by a terrorist act (the costs associated with the TWA 800 crash off Long
The task of meeting the costs of terrorism prevention and enhanced security is
high. One economist reportedly calculated that “security decisions made in the first
weeks after September 11 will cost the U.S. economy $236 billion a year,” including
federal and non-federal security forces as well as the cost of higher insurance
payments.196 Some local governments have difficulty meeting these costs, as noted
by one county official: “Minus the funding, it’s going to be difficult to implement the
system Ridge wants.”197 In response to requests from mayors seeking reimbursement
for overtime expenses of public safety officers assigned to work after alerts are
issued, the director of the Office of Homeland Security reportedly stated that:
it would be a mistake for the federal government to take on those costs directly
but that he was open to the possibility of making a portion of the $3.5 billion the
National Academy of Public Administration, The Role of the National Guard in
Emergency Preparedness and Response (Washington: Jan. 1997). Appendix E of the report
summarizes some relatively recent activities of Guard forces in disaster response and the
management of civil disorders.
U.S. Advisory Commission on Intergovernmental Relations, The National Guard:
Defending the Nation and the States, A-124 (Washington: April 1993), p. 21.
P.L. 98-473, 98 Stat. 2102, 42 U.S.C. 10501-13.
Source: Telephone conversation with Greg Morris, U.S. Department of Justice, Feb. 7,
For example, Congress appropriated $5.7 million for inaugural costs incurred by the
District of Columbia government in 1997. Doug Struck, “Holiday on a Holiday
Shortchanges Some,” The Washington Post, Jan. 7, 1997, p. A7.
“Provided further, That notwithstanding any other provision of law, of the amount
provided to the National Transportation Safety Board, not more than $6,059,000 shall be
made available to the State of New York and local counties in New York, as reimbursement
for costs incurred in connection with the crash of TWA Flight 800.” P.L. 105-18, 111 Stat.
John Maggs, “From Guns to Butter?,” The National Journal, v. 34, Jan. 5, 2002, p. 24.
Statement of Javier Gonzales in: Beverly Schlotterbeck, “Homeland Security Alert
System Gets Passing Grade,” County News, March 25, 2002, p. 1.
administration wants to distribute to states and localities this year for homeland
defense become <a block grant within a block grant,’ available for cities to use
as they see fit. Ridge suggested that perhaps 10 percent of the money could
Maintain the Status Quo. The work of the FBI and other federal agencies,
along with the emergency law enforcement assistance authority granted the attorney
general, arguably provides sufficient authority for a range of federal resources to be
provided to non-federal government agencies before and after terrorist attacks. In
addition, the National Guard has exercised a long-standing role during domestic
emergencies, and military installations have established procedures for providing
assistance after disasters and disturbances.199 State and local governments also
dedicate non-federal resources to meet the contingencies associated with threatened
Pro. Through appropriations, Congress can ensure that adequate funding exists
to provide emergency law enforcement assistance under existing authority. The
decision by the director of the OHS to issue a security alert under the advisory system
indicates that public safety activities are encouraged by the federal government.
Accordingly, it may be argued that sufficient authority exists to reimburse states and
localities for some of the non-federal costs of complying with the alerts issued by
OHS, should Congress decide to do so.
Con. The cost of paying expenses associated with security alerts may lead some
to urge the director of OHS to exercise caution in issuing warnings of possible
terrorist actions. As a result, the Director may be placed in the difficult position of
having to weigh the degree of risk with cost evaluations in deciding whether to issue
an alert. As it is difficult, if not impossible in some cases, to make that
determination, Congress may decide that the emergency law enforcement authority
is insufficient to guard against terrorist threats. Also, state and local officials may
contend that existing authority is deficient and that new authority is needed to
provide assistance associated with alerts.
Enactment of New Legislation. Congress might consider legislation that
increases the federal role in counterterrorism efforts in the United States. For
example, it could authorize the Director of FEMA, the attorney general, the secretary
of the proposed Department of Homeland Security, or the heads of other executive
agencies to provide technical assistance or funds to state and local governments to
help meet expenses incurred in responding to high security alerts issued by federal
David S. Broder, “Mayors Seek Clear Security Plan,” The Washington Post, June 18,
2002, p. A10.
For example, regulations of the Department of the Air Force concerning civil disturbance
and disaster assistance are found at 32 CFR Part 809a.
Pro. Some non-federal officials might argue for higher levels of support and
financial reimbursement from the federal government because the destruction in New
York City was caused by an act of war, thereby directly implicating the federal
government in its aftermath. Enactment of legislation authorizing federal payments
for the costs of meeting security alerts might be considered another element of
Con. The warnings issued by the attorney general, or other officials, are a
necessary and proper function of a federal official, but such warnings do not
constitute federal mandates. Therefore, new legislation that authorizes compensation
is unnecessary because the federal role is one of assisting and supplementing, not
mandating, state and local actions.
Detail National Guard Units. National Guard costs are covered by the
federal government when those troops are tasked for specified exercises and other
duties.200 Legislation might be considered by Congress to authorize National Guard
units to be placed under operational control of federal law enforcement agencies,
giving federal officials responsibility for paying their costs.201 This option could also
be accomplished without legislative action through a decision by the President to
federalize the National Guard units of one or more states. As described in one media
report: “For an exclusively federal responsibility, such as guarding the borders or
oceans, when the Guard was mobilized for federal purposes, the secretary of defense
would lead.”202 The author noted that not all federal responsibilities undertaken by
National Guard units, however, would be controlled (and therefore paid for) by the
Department of Defense. “Even if the Guard were tasked with a federal function, such
as assisting at airports but it took place within a state without a declaration of
emergency, the governor would be in charge, of course coordinating with national
Pro. The integration of federal law enforcement and military personnel could
result in an efficient use of federal resources. As commander-in-chief and as the lead
administrator of executive branch, the President would exercise ultimate authority
over civilian and military personnel and could hypothetically ensure coordination of
all dedicated federal resources. The National Guard, as the militia of the states as
well as a federal military reserve force, could be used for these purposes without
raising concern over the use of active Army troops for domestic purposes.
32 U.S.C. 503.
This proposal, reportedly under consideration by the Bush Administration, is taken from:
Brigadier General Joseph R. Barnes, “Amend the Stafford Act to Fund Emergency State Use
of the National Guard,” Journal of Homeland Security, at:
ntary=12], visited April 26, 2002. Related to this option, one news report indicated that
Homeland Security Director Ridge “held out the possibility of National Guard troops being
made more available to mayors to share the security work.” See: David S. Broder, “Mayors
Seek Clear Security Plan,” The Washington Post, June 18, 2002, p. A10.
Donald Devine, “Bold Military Reform Rollout,” The Washington Times, April 26, 2002,
Con. The inclusion of the military in domestic law enforcement, or homeland
security matters, would reverse a long tradition of keeping such functions separate.
The Posse Comitatus Act which proscribes the use of the military to execute
domestic laws except as authorized by the Constitution or statute, rests in “an
American tradition, born in England and developed in the early years of our nation,
that rebels against military involvement in civilian affairs.”204 There also could be
issues of command and control if federal civilian agencies were put in command of
National Guard units which have been federalized.
Authorize Stafford Act Funds for National Guard Details. The
Stafford Act could be amended to authorize the President to use National Guard
troops for security needs associated with alerts issued by the director of the OHS.205
Section 403(c) of the Act authorizes the President to direct the secretary of defense
to use DoD resources “during the immediate aftermath of an incident which may
ultimately qualify” for Stafford Act assistance.206 The secretary of defense could be
authorized, at the request of a governor, to mobilize National Guard troops in any
area or type of facility identified by the director of the OHS as being vulnerable to a
high level threat.
Pro. This option follows on existing provisions of the Stafford Act, and appears
consistent both with the intent of Section 403(c), which authorizes federal assistance
before a major disaster declaration is issued, and Section 406(a), which authorizes
reimbursement for “the costs of mobilizing and employing the National Guard for
performance of eligible work.”207 Reimbursement would proceed in the manner
currently used by FEMA under Section 406(f) authority.208
Con. Federal Stafford Act costs could increase as the war on terrorism
continues, particularly if high security alerts are issued more frequently by the
director of OHS. Since it is virtually impossible to protect every potential terrorist
target, it could require federal officials to make difficult decisions as to priorities.
Some would contend that such decisions are more productively made at the state
U.S. Library of Congress, Congressional Research Service, “Restrictions on Military
Assistance to Domestic Authorities,” by Charles Doyle, at:
[http://www.congress.gov/brbk/html/ebter156.html], visited April 26, 2002.
This option is based on a proposal in: Barnes, “Amend the Stafford Act to Fund
Emergency State Use of the National Guard.” The author suggests, as one option, that the
President be authorized to issue a “security emergency” declaration in order for the National
Guard troops to be considered federalized.
42 U.S.C. 5170b(c)(1).
42 U.S.C. 5172(a)(2).
42 U.S.C. 5172(f). The Disaster Mitigation Act (DMA) of 2000 struck this provision.
However, under interim authority granted in the DMA, the provisions of Section 406(f)
remain in effect until the President issues newly authorized management cost rates. Sec.
202 of P.L. 106-390, 114 Stat. 1560.
Modified Military Role. There is little question that the Department of
Defense is going to be more involved in combating terrorism in the United States.
Domestic defense operations, however, have not been a primary undertaking for the
armed forces since the 19th century. Consequently, there is an on-going debate about
the extent to which DOD resources should be committed to domestic antiterrorism
efforts, the manner of their employment, and the resource, legal, and organizational
repercussions of such a commitment.209 On October 1, 2002, a new combatant
command (Northern Command or NORTHCOM) will become operational. Its area
of responsibility will include the United States, Canada, Mexico, and much of the
Caribbean. It will subsume the existing North American Air Defense Command.
Aside from these parameters, few details concerning its projected resources,
missions, and organization have been released. Congress has authorized the
President, through the secretary of defense and in consultation with the Joint Chiefs
of Staff, the authority to establish and structure combatant commands.210 Congress,
however, has substantial precedent for involvement in this process.211
Pro. Proponents of greater military involvement in homeland security
operations maintain that the Department of Defense has unique resources, both in
capability and size, that are critical to domestic antiterrorism efforts. DOD, they
argue, must be prepared to employ these resources in a rapid and decisive manner.
Examples include fighter-interceptor aircraft, chemical-biological defense assets, and
nuclear weapon detection and recovery teams. In addition, only the Department of
Defense has large personnel and logistical resources that can be made available
rapidly nationwide to assist in incident response and recovery operations.
Consequently, proponents believe that a seamless integration of these resources with
other federal and state/local assets would significantly improve antiterrorism
response and deterrence.
Con. Those who have reservations about increasing DOD involvement in
domestic antiterrorism efforts generally acknowledge there is little question that
some unique DOD assets, such as air defense, can and should be utilized in
antiterrorism efforts. However, they maintain that these demands must be carefully
balanced against the requirements for overseas military operations. They believe that
the potential for diversion of financial, material, and personnel resources is great,
and that DOD, through its new Northern Command, should be allowed to manage
their allocation. They argue that the Department of Defense should generally be the
source of last resort, and the civilian sector should create or bolster its own
antiterrorism capabilities where possible. There are also concerns that excessive
reliance upon DOD resources could encourage complacency among civilian
authorities regarding their own antiterrorism programs, leading them to seek to place
an ever-increasing share of antiterrorism responsibilities on the armed services. In
addition, there are those who have fundamental reservations about the domestic use
For a discussion see: Steven J. Tomisek, “Homeland Security: The New Role for
Defense,” Strategic Forum, no. 189, Feb. 2002, p. 8.
10 U.S.C. 161.
For examples, see P.L. 99-661, Title XIII, Sec. B, 100 Stat. 1783, regarding the Special
Operations Command, and P.L. 99-433, Sec. 212, 100 Stat. 1012, regarding the missions,
responsibilities, and force structure of unified combatant commands.
of armed forces in what could become law enforcement situations, i.e. posse
See CRS Report RS21012, Terrorism: Some Legal Restrictions on Military Assistance
to Domestic Authorities Following a Terrorist Attack, by Charles Doyle.
Environmental Hazard Assessment and Communication213
Issue Summary. In the aftermath of a disaster, local residents and emergency
workers require information about the safety of environmental conditions and
necessary protective measures to be taken. When the attack on the WTC caused
buildings to collapse, creating tons of dust and releasing a mixture of toxic materials
into the air, local, state, and federal agencies promptly began monitoring air quality,
and the U.S. Environmental Protection Agency (EPA) soon issued public assurances
that the air was safe. Nevertheless, there are continuing concerns about the quality
of the air in the lower Manhattan area and potential health impacts. For months after
the disaster, residents and workers in the area continued to report respiratory
difficulties and related problems.214
Some have accused the EPA of failing to protect the health of the general public
and first responders by issuing inconsistent and misleading statements about the
safety of air quality in the vicinity of the WTC.215 Release of some air quality
information was delayed for weeks, reducing its utility to the community. Several
scientists have questioned the accuracy of EPA hazard assessments (and related
public statements). Some have raised the question of whether legislation is needed
to ensure health protection from environmental pollution for victims and emergency
responders in future disaster recovery operations.
Issue Analysis. People potentially affected adversely by releases of
hazardous chemicals expect environmental and public health officials to evaluate
health risks quickly and accurately and clearly communicate the results to the
community. Emergency personnel need such information so they can protect
themselves from short- and long-term adverse health effects that would result from
high-level, short-term exposure to dangerous chemicals, as well as to guide their
efforts to mitigate harm to the general public. The public needs health risk
information so that individuals may choose rationally, based on personal judgment
and values, a level of protection for themselves and others for whom they feel
responsible. Because information about health risks can be provided only by
environmental and public health experts, government officials with such expertise
arguably have a responsibility to make such information available to the affected
Application to Terrorist Attacks. According to news reports and
congressional testimony, statements made by the EPA and local officials shortly after
September 11 might have provided misleading information to people in New York
Written by Linda-Jo Schierow, Resources, Science, and Industry Division.
Charisse Jones, “Anxieties Over Toxins Rise at Ground Zero,” USA Today, Feb. 6, 2002;
Johnson, Kirk. “Air Testing after September 11 is Both Perplexing and Reassuring.” New
York Times, May 15, 2002.
For example see statement of Representative Jerrold Nadler, U.S. Senate, Subcommittee
on Clean Air, Wetlands, and Climate Change, Committee on Environment and Public
Works, Impacts on air quality of the September 11th Attacks and Possible Health Effects
in the Area of the World Trade Center, hearing, February 11, 2002,
[http://www.senate.gov/~epw/Nadler_021102.htm], visited June 10, 2002.
City, including first responders. EPA stated repeatedly that monitoring had not found
levels of pollutants posing significant health risks beyond Ground Zero.216 Critics
have charged that the statements led many to believe that the air pollution, smoke,
and dust resulting from the collapse of the World Trade Center towers posed no
serious health concerns in either the short- or long-term.217 In addition, some have
complained of long delays in the release of air quality data.218
EPA officials have defended the agency’s performance, arguing that it
responded to the City’s request for assistance “promptly and thoroughly,” as required
under the Federal Response Plan (FRP). The EPA administrator for Region II,
which coordinated the regional response, has denied that the Agency intentionally
misled the public, and stated that the agency never dismissed risks to sensitive
populations (for example, asthmatics) or to site workers.219
At the WTC site, EPA took numerous measurements of air quality. Through
September 30, 2001, EPA, together with the Occupational Safety and Health
Administration (OSHA), collected 835 ambient air samples in the metropolitan area.
Results are available on EPA’s website.220
Out of a total of 442 air samples EPA took at Ground Zero and in the immediate
area, only 27 had levels of asbestos above the standard EPA uses to determine
if children can re-enter a school after asbestos has been removed – a stringent
standard based upon assumptions of long-term exposure. OSHA has analyzed 67
air samples from the same area, and all were below the OSHA workplace
standard for asbestos.221
Based on monitoring data, EPA determined that WTC hazards to the general
public were below the “levels of concern” established for the site.222 (“Levels of
concern” are discussed below.) Since September 2001, levels of pollution have
decreased, but EPA continues to measure air quality at 29 fixed monitoring sites in
the New York City area.
For example, see EPA’s Web site summarizing the results of air monitoring,
[http://www.epa.gov/wtc/questions/index.html], visited June 10, 2002.
“Kept in the dark about WTC air,” Newsday, Feb. 13, 2002, p. A17; Impacts on Air
Quality of the September 11th Attacks and Possible Health Effects in the Area of the World
Trade Center, [http://www.senate.gov/~epw/Nadler_021102.htm], visited June 10, 2002.
Statement by Representative Jerrold Nadler in: Impacts on air quality of the September
11th attacks and possible health effects in the area of the World Trade Center.
Herzfeld, John. “Senators question EPA handling of health risks from Trade Center site,”
Daily Environment Report, Feb. 12, 2002, p. A-1.
EPA Response to September 11, EPA and OSHA Web Sites Provide Environmental
Monitoring Data From World Trade Center and Surrounding Areas,
[http://www.epa.gov/wtc/], visited June 10, 2002.
Notwithstanding these efforts, an internal review of the events of September 11
and EPA responses found that public information dissemination was one of the
means by which major lessons were learned. The report acknowledges that, although
some helpful information was provided by EPA during the response, “other
information fueled the fears of an anxious public.”223 The agency recognized that its
health statements sometimes may have been subject to misunderstanding, as follows:
Although OAR [the Office of Air and Radiation] is EPA’s designated lead for
health effects and risk communication for air pollution, OAR sometimes had to
correct potentially misleading information after it had been issued.224
EPA concluded that, overall, its “existing mechanisms for decision-making and
communication in Agency emergency responses ... were not well utilized.”225
According to EPA, data obtained and distributed by different agencies
sometimes appeared inconsistent due to use of different sampling and analytic
methods.226 New York City collected and made available to the public its own air
quality data, but asked EPA to interpret them.227 To interpret data, however, requires
knowledge of how and when samples were taken, handled, and analyzed. EPA
observed, “When there are many agencies involved in gathering monitoring data for
a response, efficient consolidation and interpretation requires up-front coordination
of sampling and analysis protocols.”228
Several independent scientists and one EPA scientist publicly questioned the
accuracy of EPA statements about the safety of the environment in lower Manhattan.
Generally, they criticized EPA’s choice of monitoring equipment and health risk
standards.229 Other independent scientists have agreed with EPA statements
regarding the safety of breathing New York City air following the attacks.230 For
example, Paul Lioy, an expert on exposure to toxic substances and associate director
of the Environmental Occupational Health Sciences Institute in New Jersey,231 stated
U.S. Environmental Protection Agency, Lessons Learned in the Aftermath of September
11, 2001 (Washington: GPO, Feb. 1, 2002), p. ES-7.
Ibid., p. 3-3.
Ibid., p. 2-11.
Ibid., p. D-7.
Ibid., p. 2-11.
“Scientist challenges EPA to produce risk assessment of WTC site,” Risk Policy Report,
Mar. 19, 2002. Online access through InsideEPA.com,[http://www.insideepa.com/], visited
June 11, 2002.
Charisse Jones, “Anxieties over toxins rise at Ground Zero,” USA Today, Feb. 6, 2002,
[http://www.USAToday.com/news/nation/2002/02/07/usat-wtc-acov.htm], visited June 11,
A joint institute of Rutgers University, and the University of Medicine and Dentistry of
New Jersey - Robert Wood Johnson Medical School.
“... for the most part, people didn’t get a high enough or long enough exposure for
Examination of Information Failures. There are at least three possible
explanations for the allegations about EPA health statements, any or all of which
might have given rise to concerns –
! EPA statements were not understood;
! EPA statements were not believed; or,
! EPA statements were based on inadequate monitoring data or health
Available information is not sufficient to judge the relative merit of these three
explanations, alternative explanations, or of the allegations themselves. What
follows is a description of the three hypotheses and some of the events or statements
that support or undermine them.
Information Misunderstandings. The first possibility is that New Yorkers did
not receive the information that EPA meant to convey – that is, either EPA
communicated information in an unclear manner, or the news media and the public
did not understand what EPA communicated. For example, early EPA statements
may have been too general, meant to reassure the nation, and not to advise
individuals who lived or worked in the vicinity of the WTC. Also, EPA officials
may have meant to say that most New Yorkers should not fear severe, long-term
health problems. However, such statements appeared to deny the short-term effects
some people were experiencing from breathing dust and smoke. In fact, as compared
to earlier messages, later EPA messages appear to have been more detailed and more
targeted to specific segments of the population.
The change from general to more specific statements and to targeted audiences
could have given the appearance that EPA’s messages were inconsistent. Similarly,
when EPA officials used words and phrases with specific, technical meanings for
environmental professionals—e.g., “level of concern”—they may not have been
understood by the general public, and some messages might have been
misinterpreted. In the immediate aftermath of the collapse of the towers,
inexperience, stress, and fatigue also may have been factors affecting
Information Credibility. A second possible explanation for concerns about
EPA statements is that, although they were accurate and understood correctly, some
people may have thought the statements were not credible. People who were having
trouble breathing in their homes or offices due to dust and smoke, or who heard about
others speak of health concerns, may have rejected EPA statements because they
seemed inconsistent with their own personal experiences. Also, distrust of EPA
communications may have been fueled by communications from other environmental
Jones, “Anxieties Over Toxins Rise at Ground Zero.”
or health authorities that seemed contradictory, or by media reports that some
independent experts had challenged the scientific basis for EPA statements.
Delay in releasing information also may have impaired trust. As noted by EPA
in Lessons Learned, “The public expects timely access to environmental information
on risks posed by the emergency. If that information is not provided in a timely
manner, the delay will engender in the public a sense of distrust.” At the WTC site,
EPA observed problems in “the time it took to interpret information, apply standards,
and communicate risks.”233 “The dissemination of EPA’s health-related sampling
results to non-EPA, front-line responders was delayed for at least two weeks.”234
EPA noted a need “to develop means to get data results to non-EPA responders
quickly to ensure effective personnel health and safety decisions.”235
EPA employees identified at least three reasons for the delays: (1) the difficulty
of data interpretation due to lack of appropriate exposure guidelines (health-based
standards) for evaluating risks of some hazardous substances, (2) the need to
determine the quality and accuracy of sampling data obtained from various
laboratories, and, (3) scrutiny of EPA sampling data for national security purposes.236
Many EPA employees believe that delays were due primarily to national security
Many EPA employees believe that although EPA developed timely information
for the responders and the public, the National Security Council, White House,
and the Council on Environmental Quality took too long to scrutinize
information that EPA intended to distribute in the first three weeks.237
In addition, it is possible that some New Yorkers did not feel they knew whom
to believe, given the number of agencies and jurisdictions involved in the response
action, seemingly conflicting results from air quality monitoring efforts, and
confusion about the roles of various agencies.238 EPA stated in Lessons Learned that
its authority often was not recognized by responders, and even EPA staff themselves
were unclear about their roles under the circumstances.239 In part, confusion about
roles may have been inevitable, given that federal, state, and local responders and the
public had never before confronted terrorism attacks with such devastating effects
within the United States. Mechanisms for coordinating emergency operations had
been devised but never tested against a real attack.
It also is possible that existing legal authorities for EPA do not clarify
responsibilities for response to an act of terrorism. (Statutory authorities, executive
Lessons Learned, p. D-10.
Ibid., p. 2-11.
Ibid., p. D7 - D8.
directives, and agency regulations are described in the “Background” section below.)
Under existing authorities, New York City has had jurisdiction over consequence
management at the WTC site, direction of the emergency response, and collection of
its own monitoring data.240 After the President issued the major disaster declaration
for New York, FEMA, within hours of the attack, assigned to EPA the mission of
protecting health and safety of site workers and others in the vicinity from hazardous
substances under the FRP. Thereafter, EPA coordinated the responses of federal
agencies to the consequences of the release of hazardous substances. In addition,
because the WTC was attacked by terrorists, the FBI was the designated Lead Federal
Agency (LFA), in charge of managing the crisis overall under terms of the
interagency cooperation plan known as CONPLAN.241
Information Deficiencies. A third possible explanation for misunderstandings
involving EPA health statements might be that there was a lack of consensus on the
accuracy of EPA statements for a number of reasons. 242 First, although EPA
officials collected numerous measurements of air quality, the Agency appeared to
face difficulties that might have limited the number or quality of measurements.
Judgments about the adequacy of EPA monitoring and health assessment, therefore,
and the search for any legislative solutions to perceived failures, must be made in the
context of the confusion and disorder surrounding the WTC events.
Second, when EPA personnel arrived on the scene to begin monitoring the
environment, communications and transportation systems had been disrupted.
Monitoring personnel were hampered by smoke, fire, debris, rescue work, and their
own protective equipment. Apparently, resources were inadequate. According to
EPA, officials were “not adequately prepared to conduct environmental monitoring
work on a scale as large as the WTC where electrical power was not available.”243
Moreover, regional EPA officials responsible for the emergency response found
insufficient laboratory capacity to analyze samples quickly. In addition, there were
disagreements among EPA scientists and policy officials about which hazardous
materials should be monitored.244
Third, EPA monitoring and health risk assessment efforts also were challenged
by the presence of novel pollutants that were created when the towers burned and
collapsed following the impact of fully fueled airliners. For example, asbestos fibers
were so finely pulverized that they were difficult to measure and their potential health
Lessons Learned, p. D-7.
U.S. Federal Emergency Management Agency, United States Government Interagency
Domestic Terrorism Concept of Operations Plan (Washington: Jan. 2001), at:
[http://www.fema.gov/r-n-r/conplan/conplan.pdf, visited June 11, 2002.
The technical arguments employed by scientists who criticized EPA monitoring methods
and safety assessments at the WTC site are beyond the scope of this analysis.
Lessons Learned, p. 2-11.
Lessons Learned, p. D-6..
effects are unknown.245 In other cases, it has been reported that metals were
vaporized then surrounded and attached to minute cement particles. Again, the longterm health effects that might be associated with such particles remain unknown.
Perhaps such particles account for the effects some New Yorkers reportedly have
experienced. “[T]here’s enough anecdotal information out there that some good solid
studies need to be done to confirm or deny the effects being observed,” according to
Fourth, data interpretation for conventional pollutants has proven difficult,
especially with respect to New Yorkers’ health. Little baseline data existed (that is,
data on background levels of air pollution and health conditions prior to the tragedy)
against which to measure changes in pollutant exposure or subsequent health status.
It appears, for example, that some pollutants detected at moderately high levels by
monitoring equipment after September 11 (e.g., benzene, a major source of which is
motor vehicle emissions and evaporation from gasoline service stations) probably
were present prior to that date.
Fifth, another serious challenge was the lack of health-based guidelines for
“safe” levels of exposure to many of the pollutants of concern around the WTC site.
Where such exposure guidelines exist, they generally applied only to long-term
exposure and a few types of health impacts, such as cancer.247 The need for such
standards is illustrated by EPA’s standard operating procedure when it first evaluates
a release of hazardous substances. In general, EPA begins testing for pollutants when
it first arrives at the site of a hazardous substance release.
EPA determines the seriousness of the threat, and the need for immediate
response, based on the toxicity of the substances present and their possible health
effects. The information collected by EPA is used by all the agencies involved
in the emergency response. EPA response personnel use direct-reading
instruments and testing equipment when performing air monitoring. One
important goal of monitoring during initial site entry is to establish safety or
work zones at the site. As the emergency response action continues, response
personnel conduct periodic monitoring to ensure that any new hazards are
identified promptly and that appropriate controls are implemented to protect the
responders and nearby communities.248
In evaluating the “seriousness of the threat,” EPA compares the measured levels
of pollutants in the environment to a “level of concern” (LOC), a threshold level
above which a health hazard might exist.249 However, because few health-based
Kirk Johnson, “What’s in New York Air: Ground Zero Data May Finally Tell,” The New
York Times, May 15, 2002, p. A19.
Ibid. The issue of the time frames under which such health studies are conducted is
discussed in the “Expedited Public Health Studies” section of this report.
Lessons Learned, p. D-11.
See information on the EPA Superfund Emergency Response website, at:
[http://www.epa.gov/superfund/programs/er/hazsubs/insites.htm], visited June 10, 2002.
A more detailed explanation of LOCs is available at the Web site of the National Oceanic
exposure guidelines have been established, EPA must first identify or develop
suitable “levels of concern” for some pollutants before it can interpret monitoring
data and communicate about health risks. Current guidance for establishing LOCs
when a chemical spill occurs near a population center indicates that LOCs should be
situation-specific but should protect “all segments of the population, including the
very young and the very old, pregnant women, and hypersensitive individuals.”250
If the measured levels of pollution are lower than the LOC, EPA communicates that
information to other agencies and the general public, and the agency continues to
monitor the air, but no other precautionary action is required. When measured levels
of pollutants are above the LOC, responders generally take additional precautions.
For example, they don protective equipment, restrict access to the site, and call for
Background. To facilitate congressional evaluation of EPA performance and
possible means of enhancing future performance, this section provides background
information on EPA’s statutory authority for responding to releases of hazardous
Statutory Authority and Implementation Policy. EPA’s statutory authority
to conduct environmental monitoring, issue health statements, and otherwise respond
to a release of a hazardous substance, pollutant, or contaminant primarily derives
from the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.251 CERCLA, more popularly known as Superfund, authorizes
an immediate EPA response to a public health or environmental emergency due to
a chemical release as well as long-term remedial work at contaminated sites where
release into the environment of a pollutant or contaminant may present an imminent
and substantial danger to the public health or welfare.252
CERCLA mandated the establishment of a National Response Team (NRT)
made up of 16 federal agencies,253 chaired by EPA, and required development of the
and Atmospheric Administration, National Ocean Service, Office of Response and
Restoration, “Aids for Chemical Accident Responders and Planners.” That office provides
and coordinates advice on science and natural resource issues under the National Oil and
Hazardous Substances Pollution Contingency Plan (NCP). LOCs are used whenever the
NCP is in effect, see [http://response.restoration.noaa.gov/chemaids.html], visited June 10,
National Oceanic and Atmospheric Administration, National Ocean Service, Office of
Response and Restoration, “Public Exposure Guidelines,” see:
[http://response.restoration.noaa.gov/cameo/locs/expguide.html], visited June 10, 2002.
42 U.S.C. 9601-9675.
42 U.S.C. 9604(a).
The 16 NRT agencies are: EPA (chair), U.S. Coast Guard (USCG) (vice chair), FEMA,
Department of Defense, Department of Energy, Department of Agriculture, Department of
Commerce, Department of Health and Human Services, Department of the Interior,
Department of Labor, Department of Justice, Department of Transportation, Nuclear
Regulatory Commission, Department of State, General Services Administration, and
National Contingency Plan (NCP) to coordinate the agencies’ responses to
environmental releases of hazardous substances, pollutants, and contaminants.254
EPA and the U.S. Coast Guard (USCG), which has jurisdiction over chemical spills
in coastal waters, respond to thousands of oil spills and hazardous substance releases
every year, under CERCLA authority.255
CERCLA, Section 104(a) provides –
Whenever (A) any hazardous substance is released or there is a substantial threat
of such a release into the environment, or (B) there is a release or substantial
threat of release into the environment of any pollutant or contaminant which may
present an imminent and substantial danger to the public health or welfare, the
President is authorized to act, consistent with the national contingency plan, to
remove or arrange for the removal of, and provide for remedial action relating to
such hazardous substance, pollutant, or contaminant at any time (including its
removal from any contaminated natural resource), or take any other response
measure consistent with the national contingency plan which the President deems
necessary to protect the public health or welfare or the environment.256
The Act also provides that:
...to the extent authorized by this section , the President may respond to any
release or threat of release if in the President’s discretion, it constitutes a public
health or environmental emergency and no other person with the authority and
capability to respond to the emergency will do so in a timely manner.257
With regard to the issues involved at the WTC site, the statute specifically
authorizes environmental monitoring and assessment, as follows:
... whenever the President has reason to believe that a release has occurred ..., he
may undertake such investigations, monitoring, surveys, testing, and other
information gathering as he may deem necessary or appropriate to identify the
existence and extent of the release or threat thereof, the source and nature of the
40 CFR Part 300, §300.1-300.920. The NCP was originally established under the Clean
Water Act to coordinate the responses of federal agencies to oil spills in coastal areas.
CERCLA required substantial revisions to the NCP.
Lessons Learned, Appendix C.2, describes enabling statutes, regulations, and policies that
authorize EPA response actions. Other enabling laws include the Clean Water Act (33 USC
1321), the Oil Pollution Act (33 USC 1321, 1486, 1503, 2701-2719), the Superfund
Amendments and Reauthorization Act (SARA, Public Law 99-499), and the Emergency
Planning and Community Right to Know Act (EPCRA, 42 USC 11001-11050). For more
information see: [http://www.epa.gov/oerrpage/oilspill/lawsregs.htm], visited June 11, 2002.
42 U.S.C. 9604(a)(1).
42 U.S.C. 9604(a)(4).
hazardous substances, pollutants or contaminants involved, and the extent of
danger to the public health or welfare or to the environment.258
CERCLA also directs the President to provide information to citizens affected
by hazardous releases.259 The NCP specifies that the federal on-scene coordinator
(OSC, designated by the EPA regional administrator) must “ensure that all
appropriate public and private interests are kept informed and that their concerns are
considered throughout a response, to the extent practicable, consistent with the
requirements of” the NCP.260 That section (of the NCP) also sets forth procedures
for the dissemination of information to the public, as follows:
(a) When an incident occurs, it is imperative to give the public prompt, accurate
information on the nature of the incident and the actions underway to mitigate
the damage. ... They should coordinate with available public affairs/community
relations resources to carry out this responsibility by establishing, as appropriate,
a Joint Information Center bringing together resources from federal and state
(B) An on-scene news office may be established to coordinate media relations
and to issue official federal information on an incident. Whenever possible, it
will be headed by a representative of the lead agency. ... All federal news
releases or statements by participating agencies should be cleared through the
The Stafford Act provides additional authority to respond to releases of
hazardous materials in that it directs the President (who has delegated authority to
FEMA) to coordinate provision of “ technical and advisory assistance” to states and
communities where a major disaster emergency has been declared. Assistance is
authorized for “issuance of warning of risks or hazards,” as well as “public health and
safety information, including dissemination of such information.”261
FEMA coordinates federal assistance provided by 27 federal agencies under the
Stafford Act based on the Federal Response Plan (FRP). Regulations implementing
the FRP establish 13 emergency support functions that federal agencies may provide
to states after the President issues a major disaster or emergency declaration. If an
emergency or major disaster involves release of a hazardous substance, FEMA, in
consultation with EPA, determines whether Emergency Support Function #10,
Hazardous Materials (ESF#10), should be activated to supplement state and local
efforts. If ESF#10 is activated, the FRP designates EPA as lead agency to coordinate
efforts of all federal agencies responding to the release, and requires use of NCP
procedures to prevent, minimize, or mitigate threats to human health, welfare, or the
environment caused by hazardous substance releases and oil discharges.262 The FRP
42 U.S.C. 104(b)(1).
42 U.S.C. 9613(k)(1).
National Contingency Plan, 40 CFR 300.135(n).
42 U.S.C. 5170a(3), 5192(a).
Federal Response Plan, [http://www.fema.gov/r-n-r/frp/frpbpln.htm], visited June 11,
authorizes specific environmental monitoring and response activities. “Appropriate
response actions under the NCP include efforts to detect, identify, contain, clean up,
or dispose of released hazardous materials.”263
A key difference between EPA authority to act under CERCLA and under the
Stafford Act is that, under the former, EPA has direct authority to respond. Under
the Stafford Act, a major disaster or emergency first must be declared, then FEMA
must determine, in consultation with EPA, whether ESF#10 activation is required to
supplement the efforts of state and local governments. It is unclear what effect, if
any, activation of ESF#10 might have on EPA’s ability to exercise CERCLA
EPA’s exercise of its authority to respond to hazardous substance releases can
also be influenced by other authorities, including executive orders on the
Superfund,264 and federal emergency preparedness.265 Such authority also extends
from several Presidential Decision Directives (PDDs) issued through the National
Security Council), including PDD 39 (Crisis Management), PDD 62 (Combating
Terrorism), PDD 63 (Critical Infrastructure Protection), and PDD 67 (Ensuring
Constitutional Government and Continuity of Government Operations).266 Generally,
these directives have been issued to clarify responsibilities of various governmental
agencies, including EPA, when an act of terrorism or other catastrophe with
environmental consequences occurs. The PDDs are classified, but in general they
appear intended to expand EPA’s duties by providing explicit instructions for
implementing existing authority under such circumstances.267 In particular, PDD 39
reportedly directs EPA to respond to releases of certain chemical, biological, and
other weapons of mass destruction under the NCP and FRP. Executive orders and
presidential directives are administrative, neither increasing nor decreasing statutory
As noted above, the Stafford Act authorizes EPA to respond to a release during
a major disaster or emergency only if the President has declared an emergency or
major disaster and EPA assistance is needed to supplement the efforts of state and
local governments. FEMA regulations and the presidential directives emphasize the
U.S. President (Reagan), “Superfund Implementation,” Executive Order 12580, Federal
Register, vol. 52, Jan. 23, 1987, p. 2923.
U.S. President (Reagan), “Assignment of Emergency Preparedness Responsibilities,”
Executive Order 12656, Federal Register, vol. 53, Nov. 18, 1988, p. 47491.
PDDs are discussed in CRS Report 98-611, Presidential Directives: Background and
Overview, by Harold Relyea. The unclassified portions of PDD text are available through
the Federation of American Scientists’ Intelligence Resource Program website, at:
[http://www.fas.org/irp/offdocs/pdd/index.html], visited June 11, 2002.
U.S. Environmental Protection Agency, Chemical Emergency Preparedness and
Prevention Office (CEPPO), “Counter-Terrorism: EPA’s Role and Authority” at:
[http://www.epa.gov/ceppo/ct-epro.htm], visited June 11, 2002.
respective roles of the federal and state governments in responding to emergencies.
The roles are delineated according to the following principles contained in the
CONPLAN as follows:
The laws of the United States assign primary authority to the Federal government
to prevent and respond to acts of terrorism or potential acts of terrorism....The
laws of the United States assign primary authority to the State and local
governments to respond to the consequences of terrorism; the Federal
Government provides assistance as required.268
Under the CONPLAN provisions, the FBI takes the lead role for preventing
future incidents and crisis management aspects of the incident in the immediate
aftermath through designation of the on-scene commander (OSC). CONPLAN also
designates FEMA as the lead federal agency (LFA) for consequence management,
but FEMA does not assume that role until the Attorney General “transfers the LFA
role from the FBI to FEMA.”269 Other federal agencies, including EPA, serve as
support agencies to the FBI and to FEMA. According to the CONPLAN,
EPA provides technical personnel and supporting equipment to the LFA during
all aspects of a [Weapon of Mass Destruction (WMD)] terrorist incident. ... EPA
assistance and advice includes threat assessment, consultation, agent
identification, hazard detection and reduction, environmental monitoring; sample
and forensic evidence collection/analysis; identification of contaminants;
feasability assessment and clean-up; and on-site safety, protection, prevention,
decontamination, and restoration activities. EPA and the United States Coast
Guard (USCG) share responsibilities for response to oil discharges into
navigable waters and releases of hazardous substances, pollutants, and
contaminants into the environment under the National Oil and Hazardous
Substances Pollution Contingency Plan (NCP). EPA provides the predesignated
Federal On-Scene Coordinator for inland areas and the USCG for coastal areas
to coordinate containment, removal, and disposal efforts and resources during an
oil, hazardous substance, or WMD incident.270
In summary, EPA has broad statutory authority to respond to releases of
hazardous materials, contaminants, or pollutants regardless of cause, as long as the
release “constitutes a public health or environmental emergency, and no other person
with the authority and capability to respond to the emergency will do so in a timely
manner.”271 Under the Stafford Act, the agency has authority to coordinate federal
assistance to states with regard to hazardous materials when given a mission
assignment by FEMA through activation of ESF#10 under the Federal Response
Plan. However, EPA’s role might not be clear in all situations. For example, if there
is a deliberate release of hazardous materials (e.g., a nerve gas) by a terrorist, if the
release does not result in a presidential declaration of an emergency or major disaster
CONPLAN, p. 7.
Ibid, p. 8.
Ibid., p. 5.
42 U.S.C. 9604(a)(4).
under the Stafford Act, or if state officials do not request federal assistance, the
uncertain line of authority could result in confusion.272
Policy Options. The need for timely and clear information about health risks
may be especially critical to the physical and emotional well-being of victims of
biological, chemical, or nuclear attacks. At the same time, the problems in obtaining,
analyzing, and communicating information about contamination levels and health
risks may be even greater in some circumstances than those experienced in New
York City. Air contaminants, whether anthrax, mustard gas, radiation, or some other
agent, would be much more dangerous to monitoring personnel than the levels of
asbestos, PCBs, and other chemicals found at the WTC site. Moreover, it is likely
that fewer emergency workers would have the training to collect such samples, and
that fewer laboratories would be equipped to handle the analysis. Finally,
communications following an attack by an unconventional weapon likely could be
emotionally charged, so that any difficulties (such as those that result from
conflicting authorities) in quickly conveying accurate health messages might be
If the scale of an attack were much greater than the attacks on September 11,
EPA might be quickly overwhelmed. In Lessons Learned, EPA acknowledges that:
... the events of September 11 presented an almost overwhelming challenge to the
Agency’s resources. The potential resource demands of an actual NBCR
(nuclear, biological, chemical, or radiological) incident, in which the Agency
would play a much more significant role, should be a critical concern for the
In addition, due to national security concerns, delays in releasing certain data to the
public might be greater, eroding public trust and the utility of data to the community.
Many policy options might be considered by Congress with regard to alleged
inadequacies of EPA public health statements or responses to those announcements.
Five approaches are discussed below.
Maintain the Status Quo. One option is to take no legislative action,
assuming that any emergency operation is going to receive some criticism, deserved
or not. The WTC attack was unprecedented in scope and character, and EPA has
undertaken a fairly comprehensive self assessment in Lessons Learned. Current
statutory authorities may be considered sufficient; administrative procedures,
however, could require adjustment.
Pro. Proponents of this option might argue that agencies should reconsider
existing administrative mechanisms to correct any perceived deficiencies in EPA
performance. EPA has internal procedures for evaluating and improving its
performance. Interagency coordination mechanisms also exist, and interagency
Some of these issues surrounding the cause of a disaster are discussed in the section
“Definitions of Major Disaster and Emergency” in this report.
EPA. Lessons Learned in the Aftermath of September 11, 2001. Feb. 1, 2002. p. 1-9.
coordination is mandated for emergency planning in the Stafford Act and PDDs 39,
62, and 63. In addition, EPA performance is evaluated annually by the
appropriations committees and the OMB. Existing and planned reforms within EPA
may be adequate to prepare the agency for future terrorist attacks. The EPA report
Lessons Learned can guide internal discussions and serve as a checklist for needed
changes in resource allocation, training, interagency coordination, and procedures.
Congress would hold EPA accountable for implementing any needed improvements.
Con. On the other hand, some might argue that a congressional investigation,
and perhaps subsequent legislation, are needed to ensure that EPA has the authority
it needs to monitor environmental quality, evaluate health risks, and communicate
effectively and quickly with communities and first responders, particularly in the
event of a terrorist attack using chemical, biological, or nuclear weapons. They may
contend that the mix of authorities requires clarification and emendation.
Establish a Blue Ribbon Panel. Congress could direct a “blue ribbon”
panel or the National Academy of Sciences to study the issue and submit
recommendations to Congress.
Pro. Congress often relies on expert panels to clarify and mediate disputes
among scientists, or to identify the strengths and weaknesses of agency programs.
A neutral panel could investigate claims, evaluate evidence, and develop
Con. Those who believe they already understand the issue and have solutions
in hand might resist a call for more study. In particular, some might argue that a
study would be redundant of EPA’s Lessons Learned. Studies take time and
resources that might be better spent on other projects. If EPA performance needs to
improve, it could be argued, then remedies should be put into place immediately
before EPA services are needed again.
Develop Additional Exposure Guidelines. EPA has no statutory mandate
or explicit authority to develop exposure guidelines for emergency situations.
Consequently, few such health guidelines exist for short- or medium-term exposures
to acutely toxic chemicals.274 Congress might direct or encourage EPA to develop
exposure guidelines for various hazardous substances and periods of exposure, or
direct EPA to rely upon such guidelines when responding to hazardous substance
releases where the President has declared an emergency or major disaster.
Pro. Advocates of this option might contend that health-based exposure
guidelines could facilitate EPA decisions about the safety of measured levels of
hazardous substances in the environment and expedite release of health risk
information to the public. Such guidelines also might be useful to the President in
For level of concern (LOC) information, refer to the Web site of the Office of Response
and Restoration, National Ocean Service, National Oceanic and Atmospheric
visited June 11, 2002.
determining whether any future site of terrorist activity qualifies for assistance under
the Stafford Act.
Despite a lack of explicit statutory authority, EPA has been developing acute
exposure guidelines since 1995. The Bush Administration appears committed to
continuing development of acute exposure guidelines and has proposed increased
funding to expedite the activity.
Proponents of this option might also argue that the United States should have
a consistent and authoritative basis for evaluating health risks at disaster sites, and
for ensuring consistent risk management decisions and communications in future
emergency response actions. In the absence of guidelines for acute exposures to
specific contaminants, occupational safety standards or the responders’ best
judgments are used to select LOCs in many emergency situations. If safety standards
for exposure to toxic chemicals following accidents or terrorist acts were authorized
by statute or regulation, the meaning and basis of EPA health statements might be
better understood and accepted by independent observers.
Con. Opponents of this option might argue that guidelines would do little to
reduce risks and would cost more than any benefits they might provide. The
probability that the specific chemicals selected for guideline development would be
released by terrorists might be too small to warrant an expedited development effort.
They may instead advocate perhaps a more generic approach to safety that would
provide protection against an array of toxicants. Moreover, if information needed to
develop guidelines—about lethal and disabling concentrations of chemicals—were
to become public, it might point terrorists to the most effective targets (e.g., chemical
plants) or chemical weapons for mass destruction. Fear of this possibility recently
prompted a decision by a federal advisory committee not to post such information on
Clarify Agencies’ Authorities. Congress might want to examine and, if
necessary, clarify agencies’ authorities for environmental data collection,
interpretation, hazard assessment, and communication, especially with respect to
EPA’s leadership role when FEMA gives the agency a mission assignment under
Stafford Act authority.
For example, P.L. 107-188, the Public Health Security and Bioterrorism
Preparedness and Response Act of 2002, directs the secretary of the Department of
Health and Human Services (DHHS) to establish an advisory committee on
emergency public information and communications to report on appropriate ways to
communicate public health information regarding bioterrorism and other public
health emergencies to the public. In addition, the secretary is directed to develop a
strategy and a means for effectively communicating such information to ensure
appropriate information is disseminated to the public.
Pat Phibbs, “Short-term Emergency Exposure Levels Will Not be Posted on Web, Official
Says,” Daily Environment Report, Apr. 12, 2002. p. A-8.
S. 1621, reported by the Committee on Environment and Public Works (S. Rept.
107-114), would amend Title IV of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act to authorize the President to collect and analyze
environmental exposure data; develop and disseminate educational materials to
community members, volunteers, and workers; and provide the public access to
current information on continuing releases of a harmful substance in an area that the
President has declared a disaster. The legislation defines “harmful substance” as one
that the President determines may be harmful to human health.
Pro. Clear roles for the various federal, state, and local responders, and
established lines of command and communication, are essential to reduce
misunderstandings and facilitate prompt, effective action in any emergency. In the
event of a terrorist attack employing a weapon of mass destruction, conflicting hazard
assessments, health risk statements, or advice about appropriate protective measures
could exacerbate tensions and result in unnecessary injuries and loss of life. It would
be preferable to resolve any problems with coordination and cooperation among
agencies well before disaster strikes again, so that responders have time to learn and
practice the new procedures. Legislation, therefore, might be useful to facilitate
For example, Congress might authorize EPA or another agency to oversee and
coordinate environmental monitoring and analysis in the aftermath of an emergency.
Such authority could increase the comparability of data and reduce delays in
interpreting and communicating those data to the community during an emergency
or major disaster. If all data were collected and analyzed in a similar way, they could
be more readily combined and interpreted. Currently, EPA is the agency primarily
responsible for collecting environmental information when ESF#10 is activated.276
However, the FRP directs HHS to assist EPA by providing “assistance on all matters
related to the assessment of health hazards at a response and protection of both
response workers and the public health.”277
President Bush has suggested that the new Department of Homeland Security
would centralize communication about health and safety issues, as follows:
Under the President’s proposal, a single government Department would
communicate with the American people about a chemical or biological attack.
The new Department would also be the organization that coordinates provision
of specific threat information to local law enforcement and sets the national
threat level. The new Department would ensure that local law enforcement
entities—and the public—receive clear and concise information from their
national government. Citizens would also have one Department telling them what
actions—if any— they must take for their safety and security.278
Environmental information includes data on pollutants, contaminants, or hazardous
substances in the air, water, or soil.
See the Emergency Support Function #10 Hazardous Materials Annex to the Federal
Response Plan at: [http://www.fema.gov/r-n-r/frp/frpesf10.htm], visited June 11, 2002.
The Department of Homeland Security, p. 5.
Proponents of this option might argue that because it may not be possible, or
useful, to equip EPA, another federal agency, or every state and locality with
sufficient equipment and personnel to respond to the full range of environmental
hazards that might result from terrorism, there often will be a need for federal
agencies to rely in part on data collected, analyzed, and interpreted by contractors, as
well as state, local, and private laboratories. It might be argued that problems such
as those experienced at the WTC site might be alleviated if the EPA (or another
agency) had additional authority and resources to encourage use of standard
procedures for sampling and analysis across jurisdictions and among contract
laboratories. If procedures were standardized, all available data could be combined
more readily and quickly evaluated in terms of public health and environmental risks.
Statements issued by various entities then might be more consistent because they
would be based on a single data set. In addition, the use of available resources could
be maximized if data collection were coordinated to eliminate unproductive
duplication of effort. Finally, centralization of data collection might facilitate
clearance for public release by White House officials without sacrificing national
Con. On the other hand, some may contend that EPA has sufficient authority
to assess environmental hazards and communicate that information to emergency
responders and the community. Its role relative to the roles of other agencies is
described in the FRP and clarified in executive orders and presidential directives.
Thus, additional legislation might be redundant.
Others might contend that if data collection, analysis, and release were overseen
by EPA or any other single federal entity, the public might never be told if other
agencies found elevated levels of hazardous substances in isolated samples of air and
dust. Arguably, coordination of data could lead to data control and prevent
independent oversight of scientific methods and health standards. It also may be
argued that the federal government’s role in emergencies is to assist states and
communities, not to oversee or direct them.
Codify Selected FRP and NCP Procedures. Congress might consider
enacting legislation that would codify some procedures and roles that currently are
embodied in the plans and in regulations. EPA noted that some administrative
procedures require improvements. For example, EPA noted that no Joint Information
Center (JIC) had been established at the WTC site.279 The absence of a JIC may
account for some of the concerns about inconsistent health risk messages.
Pro. Congress could more easily evaluate and hold agencies accountable for
performance of administrative duties if legislation clearly mandates specified actions
to be taken.
Lessons Learned, p. 2-7. The Federal Response Plan Procribes staff assigned to ESF
Function #5 (Information and Planning) from releasing “information directly to the public.
It will provide information to the Joint Information Center (JIC) for release to the public and
the media.” Federal Response Plan, p. ESF #5-3.
Con. Opponents may contend that legislation codifying procedures might take
away some of the flexibility that agencies need to respond to a wide range of
Indoor Air Testing and Cleaning280
Issue Summary. Many concerns about environmental quality in the
aftermath of the terrorist attack on the WTC focus on conditions inside residences,
schools, and businesses. Occupants of these buildings seek information on whether
indoor environments are dangerously contaminated; if so, they may likely seek
cleaning assistance. Citizens generally look to the federal government, especially
EPA, for such assistance. EPA, however, at first declined to monitor indoor air,
explaining that it had no clear authority to do so.281 Although EPA later announced
a plan to test and possibly clean as many as 15,000 residences,282 this came eight
months after September 11 and only after congressional and New York City council
hearings, numerous media reports on the issue, and demands from New York City
While it is true that in most circumstances EPA has no explicit authority to test
indoor air or accumulated dust or to clean private residences, EPA is authorized to
address the release of hazardous substances to the environment as a result of the
collapse of the WTC towers under CERCLA284 and the Stafford Act.285 Congress
might elect to address the question of whether EPA authorities are adequate with
respect to indoor air quality in the event that hazardous substances, pollutants, or
contaminants are released in future terrorist attacks.
Issue Analysis. No federal statutes clearly authorize EPA to regulate (that
is, to set limits on) any pollutant in indoor air in buildings not owned by the federal
government.286 State and local governments traditionally regulate indoor air quality
(e.g., through building codes), often relying on national standards established by
professional groups such as the American Society of Heating, Refrigerating, and Air
Written by Linda-Jo Schierow, Resources, Science, and Industry Division.
John Herzfeld, “Senators Question EPA Handling of Health Risks from Trade Center
Site,” Daily Environment Report, Feb. 12, 2002, p. A-1; Christine Todd Whitman, Letter
to the Honorable Jerrold Nadler, Feb. 22, 2002.
John Herzfeld, “EPA to Provide Cleanup, Testing to Address Fears About Dust From
World Trade Center,” Daily Environment Report, May 10, 2002, p. A-1.
Margaret Ramirez, “Officials Prod EPA; Urge Cleanup of Apartments Near WTC,”
Newsday, Mar. 9, 2002, p. A4.
42 U.S. C. 9601-9675.
42 U.S.C. 5121 et seq.
However, five statutes provide EPA limited authority to conduct research and provide
educational outreach and technical assistance to states, localities, and environmental
professionals: the Radon Gas and Indoor Air Quality Research Act (Title IV of the
Superfund Amendments and Reauthorization Act (SARA) of 1986,); the Toxic Substances
Control Act, Section 6, as well as Titles II (asbestos), III (radon), and IV (lead-based paint);
the Federal Insecticide, Fungicide and Rodenticide Act, the Clean Air Act, and the Safe
Drinking Water Act. SARA directs EPA to coordinate indoor air quality activities
conducted by the federal government through an interagency Committee on Indoor Air
Conditioning Engineers (ASHRAE). The Occupational Safety and Health
Administration (OSHA) generally regulates indoor air pollutants in the workplace.
Application to Terrorist Attacks. In the first weeks following September
11, 2001, EPA vacuumed streets and rooftops, set up stationary monitors in
numerous locations, and attempted to ensure the safety of first responders working
at Ground Zero.
EPA monitoring generally was limited to the ambient (outdoor) environment,
while indoor environments were tested by the city of New York, because, according
to EPA Administrator Christine Todd Whitman, EPA served “in a supporting role
to the City of New York and the State of New York, consistent with the Federal
Response Plan and mission assignments from FEMA.”287 The EPA administrator
stated that :
... under the Federal Response Plan local governments have primary
responsibility for responding to an event. Those governments, however, can turn
to the federal government for assistance where they need it. In this event, the
City of New York asked, through FEMA, that EPA assume lead responsibility
for monitoring the outdoor conditions at and around the site of the event and for
decontaminating the streets and other outdoor public areas. ... the City assumed
responsibility for indoor testing and the reoccupancy of buildings.288
In response to questions raised by U.S. Representative Jerrold Nadler about this
division of responsibility,289 Whitman replied:
I believe that Congress and the Administration need to revisit the issue of
authority and responsibility for indoor environmental conditions in the wake of
a terrorist attack. While the current practice is to vest responsibility in local and
state governments for indoor air conditions, perhaps this approach is not
appropriate in the wake of an event like September 11th.290
The Senate Subcommittee on Clean Air, Wetlands, and Climate Change, of the
Committee on Environment and Public Works, held a field hearing in New York City
February 11, 2002, to examine Representative Nadler’s concerns about continuing
air quality problems at the WTC site. Shortly after the hearing, Whitman formed an
indoor air task force. The New York City council held a hearing March 8, 2002, to
consider the environmental response to the terrorist attacks. The same day, New
York City Mayor Michael Bloomberg and U.S. Senator Hillary Rodham Clinton
announced formation of a downtown air quality task force.
Representative Jerrold Nadler, “White paper: Lower Manhattan Air Quality, Version 1,”
Mar. 8, 2002; Representative Jerrold Nadler, “Letter to Tom Ridge, Office of Homeland
Security,” Mar. 25, 2002.
On May 8, 2002, EPA announced that it, state and city agencies, FEMA, and the
Occupational Safety and Health Administration would collaborate to provide
residents of Lower Manhattan free cleaning and testing of their apartments, on
request.291 EPA would test air and dust in apartments for asbestos, and FEMA would
provide funding through New York City for residents who want their apartments
professionally cleaned by certified contractors. EPA would conduct followup testing
of cleaned apartments.
EPA claims that its position regarding its authority is unchanged, and maintains
that “... the scientific data about any immediate health risks from indoor air is
reassuring.” Nevertheless, EPA has agreed to test homes for asbestos because
“people should not have to live with uncertainty about their futures,” according to
Jane Kenny, Region II EPA administrator.292
Background. As noted in the previous section of this report on
“Environmental Hazard Assessment and Communication” (refer to page 76 et seq.),
CERCLA provides EPA with broad authority to respond to releases of hazardous
substances, pollutants, or contaminants.293 With respect to cleaning a site
contaminated by hazardous substances, CERCLA requires prior consultation with
The President shall consult with the affected State or States before determining
any appropriate remedial action to be taken pursuant to the authority granted
under subsection (a) of this section.294
The Stafford Act provides additional authority to respond to releases of hazardous
materials. Assistance is authorized specifically for “the performance of essential
community services, provision of health and safety measures, and management,
control, and reduction of immediate threats to public health and safety.295 (Refer to
discussion of the Stafford Act, the FRP, and CONPLAN authorities beginning on
page 78.) The Stafford Act also authorizes federal agencies to perform on public or
private lands or waters –
... any work or services essential to saving lives and protecting and preserving
property or public health and safety, including – (A) debris removal ... (E)
demolition of unsafe structures which endanger the public; (F) warning of further
risks and hazards; (G) dissemination of public information and assistance
John Herzfeld, “EPA to Provide Cleanup, Testing to Address Fears About Dust From
World Trade Center,” Daily Environment Report, May 10, 2002. p. A-4; “EPA Response
to September 11” at: [http://www.epa.gov/wtc/], visited May 24, 2002.
Asbestos is a “hazardous substance” as defined by CERCLA.
42 USC 5192(a).
regarding health and safety measures ... (I) reduction of immediate threats to life,
property, and public health and safety.296
This authority is clarified in the FRP with respect to a release of hazardous
Appropriate response actions under the NCP include efforts to detect, identify,
contain, clean up, or dispose of released hazardous materials. The actions can
include stabilization of berms, dikes, or impoundments; capping of contaminated
soils or sludge; use of chemicals and other materials to contain or retard the
spread of the release or to mitigate its effects; drainage controls; fences, warning
signs, or other security or site control precautions; removal of highly
contaminated soils from drainage areas; removal of drums, barrels, tanks, or
other bulk containers that contain hazardous substances; and other measures as
Policy Options. If EPA’s statutory authority is considered inadequate to
address indoor air hazards, the agency might be unprepared to perform the duties
delineated by PDD 62 in the event of future attacks. Congress might wish to
consider several policy options with regard to environmental monitoring and cleaning
of indoor environments.
Maintain the Status Quo. Congress might find that current statutory
policies are adequate and that EPA sufficiently implemented governing authorities
in a supporting role to New York City and state.
Pro. The existing authorities are necessarily discretionary, allowing EPA to
confer with other federal, state, and local government officials and determine, based
on competing needs for available resources, how the agency might be of greatest
assistance under the circumstances. For example, given the demands on EPA
resources, especially in the immediate aftermath of the WTC tragedy, additional
monitoring of indoor environments and cleaning might have been less important to
protecting public health than attending to the outdoor environment, which was thick
with dust. Moreover, the city of New York probably has the necessary experience
and expertise to regulate asbestos contamination and removal. New York’s
Department of Environmental Protection routinely oversees asbestos removal
projects under city regulations and operates an environmental laboratory that analyzes
asbestos, air pollutants, and hazardous material samples. On the other hand, EPA
expertise and assistance might be more crucial if the hazardous substance released
were a chemical, radiological, or biological weapon.
Con. Others may contend that the confusion shown after September 11, along
with the difficulties encountered in having air tested and buildings cleaned, indicate
that policy changes are required.
42 USC 5170b(a)(3).
The FRP Annex for ESF#10 may be accessed from the FEMA Response and Recovery
website, at: [http://www.fema.gov/r-n-r/frp/frpesf10.htm], visited June 13, 2002.
Clarify EPA Authority. Congress might choose to amend CERCLA or the
Stafford Act to clarify EPA authority with respect to indoor environmental
contamination. An amended law could either clearly grant EPA authority to test and
clean private buildings or clearly prohibit such actions.
Pro. Clarification could eliminate any questions EPA officials might have
about their authority. If authority were made explicit, it could expedite future EPA
efforts to protect building occupants affected by terrorist acts. This could lower risks
to public health due to exposure to hazardous substances.
Con. The cost of testing and cleaning private buildings might be considerable.
Clarification of this authority could increase federal disaster response expenditures.
Reduce EPA Discretion. Congress might elect to mandate EPA activity to
monitor or clean up private buildings (or oversee those activities), either in New
York City specifically, or in all future emergency and disaster declarations where
hazardous substances are released. When EPA initially chose not to monitor or clean
indoor environments in the vicinity of the WTC, it was exercising discretion
provided by CERCLA.
Pro. Congress could choose to reduce EPA discretion to ensure protection of
building occupants in future emergencies. This could be accomplished by amending
CERCLA or the Stafford Act.
Con. A congressional mandate would reduce EPA’s ability to tailor responses
to particular circumstances, and reduced flexibility might have negative impacts. For
example, it could force actions that are not economically efficient, not reasonable or
practical, or not compatible with the public interest. Consequently, the cost of a
universal cleanup mandate might be high, especially if there are recurring terrorist
incidents. Finally, it might be argued that states and localities should not be forced
to allow EPA to operate in neighborhoods and homes when non-federal government
agencies are responding.
Measures of Need for Temporary Housing298
Issue Summary. A terrorist attack could involve the release of a chemical,
biological, radioactive, or nuclear (CBRN) weapon. Moreover, as shown in the
September 11 tragedy, a terrorist attack with more conventional explosives or
material can release such hazardous airborne substances as asbestos, residue from
burning fuel, and clouds of dust. Depending on variable conditions such as wind
flow and speed, precipitation, temperature, and the presence of air-handling
equipment, residual airborne CBRN substances or other hazardous material could
infiltrate residences in areas surrounding an attack zone.
If a terrorist attack leads to a major disaster or emergency declaration under the
Stafford Act, the occupants of residences in the political jurisdictions named in the
declaration might be eligible for temporary housing assistance. However, if airborne
particles are carried to residences outside the disaster area, their occupants would not
be eligible. Congress might consider legislation that addresses whether residents of
areas outside the disaster area, but nonetheless affected by substances released by an
attack, should be eligible for temporary housing assistance.299
Issue Analysis. CBRN substances or toxic contaminants released in a
terrorist attack or other emergency situation can pose a threat to public health at the
time of the event and for long period afterward. People residing in areas with
biological, chemical, or physical residues would continue to face health consequences
until airborne particles and residual risks could be eliminated or reduced to
Application to Terrorist Attacks. The destruction of buildings in the
September 11 WTC and Pentagon attacks released tons of very fine (as small as 0.09
micrometers300) and caustic particles (up to pH 11.8301) composed of varying mixtures
of chemicals, heavy metals, and other substances. Around the WTC site reports
surfaced of nearby residences containing residual risks for weeks after the attacks,
mostly in the form of particulates containing asbestos and other health-threatening
Written by Michael Simpson, Resources, Science, and Industry Division and Keith Bea,
Government and Finance Division.
This issue discussion pertains to residences, not other buildings and facilities.
Comparable policy options might be considered for commercial, governmental, and nonprofit facilities affected by airborne particles.
Federal air quality standards exist for outdoor air particles only down to 2.5 micrometers.
The size of airborne particulates is particularly relevant to congressional debate because of
at least three concerns. First, the health risk is significant because smaller particulates stay
airborne longer and are deposited deeper into lungs. Second, federal authority over nonoccupational indoor air hazards is less established than for outdoor air. Third, the capability
of laboratories to analyze the hazards of smaller particles may be at issue. For example, the
need to analyze samples in New York City after September 11 exceeded the capabilities of
laboratories. See: U.S. Environmental Protection Agency, Lessons Learned in the Aftermath
of September 11th, 2001, Final Report (Washington: February 2002), pp. 3-8 and 3-9.
Pure water is neutral at pH7 on the pH scale of 0 to 14; alkaline liquid drain cleaner can
have a pH of 12, while acidic lemon juice can have a pH of 2.2
substances.302 Continued exposure to these residues posed public health risks.
Future terrorist attacks may result in explosions of oil refineries, chemical plants, or
the destruction of other structures that could result in similar or even more serious
contamination of residences.
Background. Federal assistance for individuals and families dislocated from
their residences as a result of a catastrophe has been provided for over 30 years. In
the course of considering and enacting four significant disaster-related public laws,
Congress has established a trend of increasing federal responsibility for and
commitment to temporary housing assistance for victims of declared disasters.
Congress has not, however, specifically authorized assistance for housing assistance
due to airborne particles.
In 1966, Congress amended the National Housing Act to provide that families
displaced as a result of a major disaster would be eligible for mortgage insurance.303
Three years later Congress expanded this assistance by authorizing the President “to
provide on a temporary basis, as prescribed in this section, dwelling accommodations
for individuals and families displaced by a major disaster.”304 The temporary
assistance authorized in 1969 included unoccupied housing owned by the federal
government, unoccupied public housing units owned by local public housing
agencies, funding to lease existing residences, or the acquisition of mobile homes.
Note that in addition to such temporary housing assistance, Congress authorized
agencies to provide assistance to disaster victims in the 1960s under the Small
Business Act305 and the Consolidated Farmers Home Administration Act306 through
loans for the costs of home repair and reconstruction. Also, under CERCLA
Congress has authorized assistance for removal “actions as may be necessary ... in
the event of the threat of release of hazardous substances into the environment....”307
Further expansion of the temporary housing assistance provisions occurred in
the 1970s. The Disaster Relief Act of 1970, enacted after Hurricane Camille
destroyed many homes in states from Mississippi to Virginia, authorized the
provision of rent-free housing for 12 months of occupancy as well as mortgage or
rental payments for those who faced eviction from their residences due to
nonpayment as a result of the disaster.308 In addition, the 1970 statute authorized the
administrator of the Veterans’ Administration to “extend on an individual case basis
such forbearance or indulgence” to owners of residential property “as the
Thomas Cahill, professor emeritus at the University of California-Davis and the DELTA
Group study, available at [http://delta.ucdavis.edu], visited June 10, 2002.
Disaster Relief Act of 1966, P.L. 89-769, 80 Stat. 1317.
P.L. 91-79, 83 Stat. 128-129.
Small Business Act Amendments of 1958, P.L. 85-536, 72 Stat. 389.
Agricultural Act of 1961, P.L. 87-128, 75 Stat. 311.
42 U.S.C. 9601(23).
The Disaster Relief Act of 1970, P.L. 91-606, 84 Stat. 1751-1752.
Administrator determines to be warranted by the facts of the case and the
circumstances of such owner.”309
Congress authorized other assistance with enactment of the Disaster Relief Act
of 1974 that authorized the President to provide a new form of assistance—grants for
repairs, as follows:
the President is authorized to make expenditures for the purpose of repairing or
restoring to a habitable condition owner-occupied private residential structures
made uninhabitable by a major disaster which are capable of being restored
quickly to a habitable condition with minimal repairs. No assistance provided
under this section may be used for major reconstruction or rehabilitation of
The 1988 amendments expanded upon the temporary housing assistance
provisions. The period in which federal mortgage assistance and rental payments
were authorized to be provided was extended to 18 from 12 months, with the
President authorized to provide the assistance past 18 months if deemed necessary.311
Most recently, Congress amended the temporary housing authority by limiting each
repair grant to $5,000 and authorizing the President to provide financial assistance
for the replacement of damaged residences, with a limit of $10,000. The 2000
amendments also deleted authority for the mortgage and rental assistance program
for major disasters declared after May 1, 2002.312
Policy Options. Reports of the presence of airborne hazardous particles in
residences and the inability of residents to occupy their apartments, condominiums,
or homes in New York City after the attack might lead Congress to re-evaluate the
temporary housing assistance provisions. Some options that could be considered by
Congress are discussed below.
Maintain the Status Quo. One policy option is to retain the Stafford Act
provisions that authorize temporary housing facilities, payment assistance, and
limited repair grants to victims of major disasters.
Pro. A terrorist attack might be launched many ways (e.g., release of one or
several biological agents, chemicals, or radioactive substances), along with the
myriad types and mixtures of residues, and can result in a wide variety of possible
residual risks. Determining levels of risk acceptable to different subpopulations
following a terrorism situation may be difficult to legislate. Holders of this view may
argue that the existing Stafford Act provisions provide adequate help to those
temporarily unable to occupy their residences.
Ibid., 84 Stat. 1753.
The Disaster Relief Act of 1974, P.L. 93-288, 88 Stat. 155.
The Disaster Relief and Emergency Assistance Amendments of 1988, P.L. 100-707, 102
The Disaster Mitigation Act of 2000, P.L. 106-390, 114 Stat. 1567-1569.
Con. Others might believe that, especially in a time of crisis, it would be
preferable to have explicit statutory language to provide for temporary housing
assistance when residual risks associated with airborne particles are unacceptable.
They may seek establishment of a standard of reasonableness that reflects analytical
capability and limitations in the wake of an attack.
Establish Health Risk as a Measure of Need. The Stafford Act might
be amended to authorize the President to provide temporary housing to persons who,
as a result of a major disaster, are unable to occupy their homes due to the presence
of residual risks that meet specified thresholds.
Pro. Proponents of change may argue that, especially in a time of crisis, it
would be preferable to have explicit statutory language to provide for temporary
housing when residual risks are deemed unacceptable, using a standard of
reasonableness that reflects available information and measurement standards.
Con. Opponents of such legislation might argue that it is difficult or impossible
to determine a level of residual risk that would trigger the need to provide temporary
housing after an attack given the multitude of variables. As a result, that difficulty
might lead to inconsistent administrative decisions regarding the conditions under
which such housing aid would be provided.
Small Business Assistance313
Issue Summary. The September 11 terrorist attacks dislocated, disrupted or
destroyed nearly 18,000 businesses—the vast majority being small businesses—in
and around New York City’s World Trade Center (WTC) complex.314 Economic
disruption quickly spread to countless firms across the United States. In the
aftermath of the attacks, SBA is helping small firms by means of an assortment of
long-standing loan and managerial assistance programs.315
Analysis of the SBA’s response to the attacks, as well as speculation about its
ability to respond to possible future disasters of a far greater magnitude, raise the
larger question of what the federal role should be in assisting small businesses
recover from a worst-case scenario. Should the economic development role of the
federal government be limited, as has been suggested, to rebuilding infrastructure,
or should it be interpreted far more broadly? In a largely free-market economy,
would a large-scale federal role in assisting small businesses be necessary for the
economic revival of a city or area that had suffered devastation from weapons of
Issue Analysis. Reports indicate that, to some degree, SBA is demonstrating
flexibility in responding to the September 11 attacks. The agency has exercised its
administrative authority to expand eligibility for Economic Injury Disaster Loans
(EIDL) to small businesses nationwide, not just in declared disaster areas.316
Nevertheless, despite the agency’s half century of disaster assistance experience, the
nature and magnitude of the consequences of possible future terrorist
attacks—including those involving weapons of mass destruction (WMD)—raise
questions about the sufficiency of the SBA’s role and authority. In addition,
scenarios of devastating attacks lead to the broader question of what would constitute
an appropriate federal response. Congress may wish to review the agency’s mission
in responding to possible future terrorist attacks and the federal role in economic
development after disasters in general, particularly with regard to financial assistance
for small businesses.
Application to Terrorist Attacks. Following the terrorist attacks on the
World Trade Center, SBA dispatched employees from its headquarters and regional
offices to augment its staff in New York City. Experienced SBA loan officers were
Written by Bruce K. Mulock, Government and Finance Division.
“World Trade Center Disaster: Final Action Plan for New York Business Recovery and
Economic Revitalization.” Empire State Development in cooperation with New York City
Economic Development Corporation. January 30, 2002, p. 2. (Hereafter cited as the New
York State Action Plan), at:
[http://www.empire.state.ny.us/wtc/grant/ActionPlan/actionplan.pdf], visited May 1, 2002.
Basic authority for SBA disaster loans is found at 15 U.S.C. 636.
A fact sheet on SBA’s expanded EIDL program is available at:
[http://www.sba.gov/news/current01/economicinjuryfactsheet.html], visited May 23, 2002.
made available in disaster recovery centers located throughout the disaster area to
assist business owners and individuals.317
SBA offers both physical disaster loans to repair or replace disaster-damaged
property and economic injury disaster loans (EIDL) to cover operating expenses
businesses could have afforded to pay if the disaster had not occurred. Despite the
name of the agency, its physical disaster assistance is not limited to small firms; SBA
makes such loans to businesses of all sizes, nonprofit organizations, homeowners,
SBA, by some accounts, has been able to respond rapidly and adequately to the
September 11 attacks, guaranteeing several hundreds of millions of dollars worth of
loans to affected businesses.318 Still, some observers believe the agency’s response
has been insufficient to the task. Moreover, while the physical and economic injury
suffered by small businesses associated with the attacks on the WTC complex (as
well as the Pentagon) could hardly be considered insubstantial, it is possible that
future terrorist attacks could produce equal or greater damage and destruction. In
such a case, SBA resources could prove inadequate.
As of May 22, 2002, SBA had approved 4,591 loans in connection with the
attacks on the World Trade Center, for a total of $371 million (average size loan:
approximately $80,800). In Virginia, SBA had approved 96 loans, including those
for businesses at Reagan Washington National Airport, for $13.8 million in
connection with the attack on the Pentagon (average size loan: approximately
The federal government has also provided financial assistance to small
businesses in and around the WTC in the form of Community Development Block
Grant (CDBG) funds. As part of the $40 billion emergency appropriation (P.L. 10738) passed by Congress and signed by the President in September 2001, $700 million
in special CDBG funds were provided to the state of New York for use by the Lower
Manhattan Development Corporation. On January 10, 2002, the President signed the
FY2002 Defense Appropriations bill, which included an additional $2 billion in
Testimony of Hector Barreto, Administrator of the U.S. Small Business Administration,
before the House Small Business Committee, December 4, 2001,
[http://www.house.gov/smbiz/hearings/107th/2001/011206b/barreto.html], visited June 11,
For example, see: Bill Egbert, “Biz Folk Cope,” New York Daily News, Apr. 4, 2002, p.
1. Also, Karen Robinson-Jacobs, “Rejections of Emergency SBA Loans Irk Companies,”
Los Angeles Times, Dec. 24, 2001.
By way of comparison, in response to California’s Northridge earthquake in 1994, SBA
made 51,688 loans to homeowners and renters totaling $1.167 billion, and 13,328 loans to
businesses totaling $6.545 billion. And, specifically in terms of loans made in response to
terrorism, SBA made 172 loans for $10.4 million for the Oklahoma City bombing, and nine
loans for $512,400 for the World Trade Center bombing in 1993. The latter are the only
loans made by the agency in response to terrorism prior to the September 11 attacks.
special CDBG funds320 for New York City’s economic recovery (part of roughly $20
billion appropriated pursuant to the attacks on the WTC).321
Background. The importance of small businesses to the viability of an area’s
economic recovery following a disaster—including possible future terrorist attacks
with potentially catastrophic consequences—is generally acknowledged. Small
businesses account for 97% of the nation’s firms, employ about half of all workers,
and by any standard are an integral part of the nation’s economy.
While self-insurance and various types of insurance coverage can play a
significant role for large firms in the event of terrorist attacks, few small businesses
have any disaster insurance coverage. Moreover, it is anticipated that cost and
availability problems will preclude the vast majority of small firms from obtaining
any meaningful insurance protection against future acts of terrorism.322
Insurance aside, Congress has long recognized the primacy of local and state
responsibility for disaster recovery assistance to businesses; the federal role has
consistently been viewed as supplemental.323 The potential magnitude of possible
future attacks, however, raises questions about the possibility of the federal
government assuming a far greater role. Presently, SBA is generally regarded as the
federal agency primarily responsible for helping small businesses recover from the
physical damage and economic injury associated with terrorist attacks.
Although researchers are paying increased attention to the long-term effects of
disasters and the factors that affect the ability of a community to recover, there has
been little systematic research on recovery processes and outcomes. In particular,
“the processes and outcomes associated with the recovery of private businesses have
almost never been addressed in the disaster recovery literature.”324 Despite the
CDBG funds are generally used to help build low-income housing. P.L. 107-38 allowed
HUD to waive certain requirements, or promulgate alternative requirements. U.S. Dept. of
Housing and Urban Development, “Statutory and Regulatory Waivers Granted to New York
State for Recovery from the September 11, 2001 Terrorists Attacks,” Federal Register, vol.
67, no. 18, Jan. 28, 2002, p. 4164.
Details on how the $2.7 billion in total CDBG funds are being allocated, including
funding for small businesses, is available in a letter to New York city council member Helen
Sears from the City of New York, Independent Budget Office,
[http://www.ibo.nyc.ny.us/iboreports/CDBGLetter.pdf], visited May 1, 2002.
For more on the issue of insurance, see CRS Report RS21075, Terrorism Insurance in
the Post September 11 Marketplace, by S. Roy Woodall Jr.
U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee
on Water Resources and Environment, Federal Cost of Disaster Assistance, hearings, 105th
Cong., 2nd sess., Mar. 26, 1998 (Washington: GPO, 1998), p. 86. Prepared statement of Judy
A. England-Joseph, Director, Housing and Community Development Issues, Resources,
Community, and Economic Development Division, U.S. General Accounting Office.
James M. Dahlhamer and Kathleen J. Tierney, “Winners and Losers: Predicting Business
Disaster Recovery Outcomes Following the Northridge Earthquake,” at:
[http://www.udel.edu/DRC/preliminary/243.pdf], visited April 29, 2002.
paucity of research and analysis concerning the effects of disasters on small
businesses, several key findings emerge:325
! Compared to large firms, small ones seem to be particularly vulnerable to
disaster impacts and losses. Small businesses tend to have inadequate cash
reserves, are less able to raise capital, and generally are unprepared to cope
with disasters and their effects.
! Small firms forced to temporarily close typically face immediate cash flow
problems and, thus, need to resume operations quickly in order to remain
viable. The longer it takes business enterprises to recover, the larger the
impact on the revenue-generating power of local governments because local
jurisdictions depend on sales and property taxes. Prolonged business
disruptions have the potential for jeopardizing community-financed services
such as public works and economic development initiatives.
Policy Options. Congress may choose to evaluate whether SBA has the
statutory authority and organizational structure and capacity to respond adequately
to future attacks. Congress might consider a range of policy options that addresses
the unique disaster recovery needs of small businesses, including the following:
Maintain the Status Quo. SBA presently has a variety of loan and technical
assistance programs to assist small businesses recover from disasters of all kinds.
Decades of experience gained after many types of disasters—including terrorist
attacks—indicate that the existing authority has served the nation.
Pro. Many observers believe that, in the aftermath of the terrorist attacks, the
agency has demonstrated flexibility by making program changes administratively to
deal with the current situation. SBA’s response to the recent attacks has been
augmented by the use of CDBG funds appropriated for special purposes.
Con. Some have criticized the adequacy of SBA’s response. The number of
businesses applying for SBA loans pursuant to the Stafford Act may be perceived to
be low. Representatives of small business say the dearth of applications is
attributable to their unwillingness to take on additional debt, because the loan process
is difficult, and because some business owners are being asked to use their homes as
collateral. Furthermore, many firms report that although they have been approved
for SBA loans, they have not received money in a timely fashion.326
Relocation Proscriptions. Congress might prohibit the use of federal funds
to entice businesses affected by disasters or terrorist attacks to abandon their current
“Federal Aid to New York City in the Wake of the September 11th Attacks: What is
needed and how should it be structured and targeted?” New York City Council, Report of
the Legal and Governmental Affairs Division. February 11, 2002.
location for the jurisdiction offering the subsidy.327 The federal government might
also consider providing relocation and other assistance to displaced businesses that
relocate within the affected jurisdiction and commit their insurance settlements and
other resources to the rebuilding of the affected area.328
Pro. News reports hint that neighboring jurisdictions to Manhattan have
attempted to influence relocation decisions of firms in the vicinity of the WTC by
offering subsidies and incentives.329 While some forms of competition among states
and local jurisdictions for businesses through general tax and spending policies is
beneficial, not all competition increases economic efficiency. Preferential treatment
for specific businesses misallocates private resources and can cause state and local
government to provide too few public goods.330
Con. There are a host of arguments against relocation proscriptions, not the
least being that relocation decisions are often better guided by normal market forces
than by governmental intervention.331 Moreover, the possible use of weapons of
mass destruction may preclude the rebuilding in affected areas.
Placement of Federal Facilities.
President Carter in 1978 signed
Executive Order 12072 to require that federal buildings be built in areas of urban
blight.332 Congress could consider requiring federal construction projects be built in
areas devastated by terrorist attacks or that goods and services be purchased from
firms in those areas in order to encourage economic development. Similarly, E.O.
12073, also promulgated by President Carter, encouraged federal executive agencies
to purchase goods and services from economically disadvantaged areas as a way to
stimulate economic activity for small businesses.
Philip P. Frickey, “The Congressional Process and the Constitutionality of Federal
Legislation to End the Economic War Among the States,”
June 7, 2002.
“New York and the Federal Fiscal Policy in the Aftermath of September 11th: State and
Local Impacts of Federal Policy Options,” p. 12. Fiscal Policy Institute, January 23, 2002,
at: [http://www.fiscalpolicy.org/FederalOptions.pdf], visited May 2, 2002.
Melvin L. Burstein and Arthur J. Rolnick. “Congress Should End the Economic War
Among the States,” Federal Reserve Bank of Minneapolis, 1994 Annual Report Essay, at:
[http://minneapolisfed.org/pubs/ar/ar1994.html], visited June 11, 2002.
For example, refer to: Graham S. Taft, “Doing Battle Over the Incentives War: Improve
Accountability But Avoid Federal Noncompete Mandates”
[http://news.mpr.org/features/199605/01_wittl_econwar/studyguide/toft.htm], visited June
U.S. President (Carter), “Federal Space Management,” Executive Order 12072,
Presidential Documents, vol. 14, no. 33, Aug. 21, 1978, p. 1430. E.O. 12072 replaced a
similar Executive Order signed by President Nixon on February 27, 1970 (E.O. 11512).
Titled “Planning, Acquisition, and Management of Federal Office Space,” E.O. 11512
directed the General Services Administration to coordinate the location of federal facilities
“in a manner designed to exert a positive economic and social influence on the development
or redevelopment of the areas in which such facilities will be located....”
Pro. Normal disaster assistance may not be sufficient to help areas recover
from future attacks, particularly if CBRN devices destroy or contaminate commercial
districts. Additional economic stimulus efforts, e.g., redirecting federal construction
and encouraging federal procurement, may assist affected areas to more rapidly
recover their economic viability.
Con. With regard to the construction of federal facilities addressed in E.O.
12072, the long time required to plan and construct buildings of a business district
and concerns about environmental safety may render any such initiative infeasible.
Grants or Loans? Private business operators, like others affected by
disasters, primarily seek federal financial assistance through grants-in-aid instead of
loans. SBA loans are a key component of the overall federal disaster recovery effort.
They are the primary form of federal assistance for nonfarm, private sector disaster
losses. SBA has not in the past, or currently, provided grants to small businesses in
the aftermath of disasters. Accordingly, it would be a policy change if Congress
authorized SBA to provide grants instead of loans.
Pro. Findings from the September 11 attacks would seem to argue for the
provision of grants rather than loans to affected small businesses. Unlike large firms,
small ones tend to be far less prepared to deal with the aftermath of an attack.
Foremost in their comparative deficiency is their lack of capital. Most have little in
the way of reserves, and quickly run out of working capital. While bridge loans have
been helpful in many instances, for many small businesses they only delay default or
bankruptcy. Many small businesses might require grants instead of loans in order to
Con. SBA loans are repaid to the Treasury, thus reducing federal disaster costs
compared to grants. Grants completely transfer risk coverage to society, and might
or might not receive widespread support depending on the nature and severity of the
disaster. Grants issued to businesses to cover disaster-related losses require a great
deal of consideration related to equity and resource allocations.333
Congress may consider issues of
communications and language difficulty that were reported after the WTC attack.
The SBA or another agency maintaining a central registry of interpreters to
communicate effectively with disaster victims might be useful. Congress could
require that agencies provide disaster assistance instructions in different languages.334
Testimony of Hector Barreto, administrator of the U.S. Small Business Administration,
before the House Small Business Committee, December 4, 2001.
Problems with bilingual capabilities in connection with disaster assistance in the
aftermath of the September 11 attacks were the focus of testimony by Don Lee, disaster
assistance coordinator for a community-based organization serving Chinese-Americans in
the vicinity of the WTC. Refer to the following Internet Web site for the statement:
[http://www.house.gov/smbiz/hearings/107th/2001/011206b/lee.html], visited June 3, 2002.
Hearing by the House Small Business Committee on December 6, 2001,”90 Days After
September 11th: How Are Small Businesses Being Helped?” [unpublished]
Pro. The process, forms, and instructions associated with disaster assistance
often prove confusing for applicants fluent in English. The challenge can be
formidable for victims for whom English is a second language. As underscored by
the WTC tragedy, small businesses in urban areas often have immigrant owners and
customers. Inordinate delays and confusion in communications between relief
agencies and victims can degrade the overall recovery effort. Advocates for this
option might argue that instructions on disaster loans and other assistance should be
available in different languages.
Con. Given the uncertainties of the populations that could be affected by future
attacks, the costs of establishing and maintaining a central registry are likely to
outweigh the benefits. While regrettable, opponents may contend that delays in
providing disaster assistance are not intolerable. Scarce federal resources, they might
argue, can be applied elsewhere.
Assistance to Education Systems335
Issue Summary. The terrorist attack of September 11 had broad impacts on
the New York City public school system and higher education facilities. Students
were displaced from schools, administrators sought counseling assistance for staff
and students, bus transportation systems were disrupted, and environmental threats
developed in academic buildings. Some parents who could afford to removed their
children from city schools, transferring them to other systems. Less affluent families,
or those who did not remove their children for other reasons, continued to face
concerns about safety in a city that might bear the brunt of future attacks.
The Stafford Act authorizes federal assistance for the repair or reconstruction
of public and private non-profit educational facilities damaged or destroyed by a
major disaster. Reports of the range of difficulties encountered after the terrorist
attack in New York City have raised concerns about FEMA’s administration of the
Stafford Act and the reach of the statute. Problems and perceived failures of the
federal government to address certain needs of the educational systems might lead
Congress to reconsider existing authorities intended to help school systems recover
Issue Analysis. For decades Congress has authorized federal assistance for
public education systems and, more recently, nonprofit educational facilities, to
return educational services to their pre-disaster condition. The Stafford Act
authorizes federal assistance for the “repair, restoration, reconstruction, or
replacement of a public facility” damaged or destroyed by a major disaster or to “a
private nonprofit facility” similarly affected.336 The Act includes in the definition of
“public facility” “any public building, structure, or system, including those used for
educational, recreational, or cultural purposes”337 and in the definition of “private
nonprofit facility” “educational ... facilities ...which provide essential services of a
governmental nature to the general public.”338
Application to Terrorist Attacks. While a terrorist attack, like a
catastrophic natural disaster, can wreck havoc on the facilities, systems, and
equipment used for purposes of education, the aftereffects of the September 11 attack
indicate that different risks and threats must be addressed. The trauma of students
close to or involved in an attack might indelibly affect the well-being of young
people, especially those who lost parents or whose families might be seen as targets
of terrorists. Health hazards (such as the presence of contaminants in buildings and
on books and equipment) can pose a considerable threat because students and staff
spend many hours in these environments.
Written by Keith Bea of the Government and Finance Division with contributions from
Richard N. Apling, Domestic Social Policy Division.
42 U.S.C. 5172(a)
42 U.S.C. 5122(8)(C)
42 U.S.C. 5122(9)
News reports published after the September 11 attacks in New York City
provide information on the impact of the attacks on the education system. Months
after the attacks, some parents were reluctant or concerned about students’ return to
school because of threats from airborne contaminants and inadequate air filter
systems in the schools, while others expressed optimism and confidence.339 Of
particular note, considerable controversy has surrounded funding for counseling as
parents and students struggle with emotional problems that interfere with students’
education.340 One study undertaken by the Board of Education for New York City
reportedly found “that about 75,000 of the more than 710,000 public school students
in grades 4 through 12 are suffering symptoms of post-traumatic stress disorder, and
as many as 190,000 have mental health problems, both related and unrelated to
Cleaning and environmental testing have been conducted in school buildings,
and federal and non-federal officials have continued to monitor conditions in and
around the schools.342 School systems not directly affected by the disaster may bear
additional costs as students are transferred from damaged buildings and unaffected
buildings become overcrowded. In New York City, bus transportation systems have
been disrupted due to the transfer of students from schools directly affected by the
collapse of the buildings and the need to run buses from one school district to
another.343 Costs have been incurred by the city as school officials schedule sessions
to make up for lost class time.
According to one estimate, the attack cost the New York City school system
$200 million.344 While negotiations between New York officials and FEMA
Abby Goodnough, “Stuyvesant Air-Quality Dispute,” The New York Times, Nov. 7, 2001,
p. D12. Anemona Hartocollis, “Near Ground Zero, a Vote to Return to School,” The New
York Times, Jan. 30, 2002, p. B8.
Descriptions of the impact of the terrorist attack on the New York City school system are
be found in: Michelle Davis, “New York Schools, U.S. Officials at Odds Over 9/11 Aid,”
Education Week, May 15, 2002, vol. 21, p. 24, 26. Emily Gest and Elizabeth Hays, “PS89
Students Get a New Home,” New York Daily News, Oct. 23, 2001, p. 21. Karen W.
Arenson, “Displaced Children Go to New School, Again,” The New York Times, Oct. 23,
2001, p. D6. Nick Chiles, “Schools Open at Last; New Commutes for Many Students,”
Newsday, Sept. 20, 2001, p. A12.
Joyce Purnick, “In Schools, a Hidden Toll of Sept. 11,” The New York Times, May 13,
2002, p. B1. See also: Abby Goodnough, “Post 9/11 Pain Found to Linger in Young
Minds,” The New York Times, May 2, 2002, p. A1, A24. Christine Haughney, “N.Y.
Students Still Distressed from Sept. 11,” The Washington Post, May 2, 2002, p. A6. Joe
Williams, “Schools Still Full of 9/11 Woes,” Daily News, May 2, 2002, p. 6.
Edward Wyatt, “Students Set to Return to Stuyvesant Near Ruins,” The New York Times,
Oct. 9, 2001, p. B14. Joe Williams, “Post-9/11 Ills Found at HS, Many Stuyvesant Staffers
Suffered,” New York Daily News, May 11, 2002, p. 7.
Karen W. Arenson, “Displaced Children Go to New School, Again,” The New York
Times, Oct. 23, 2001, p. D6. Abby Goodnough, “Schools Closed by Disaster Are Losing
Some Children,” The New York Times, Sept. 27, 2001, p. D3.
“Disaster Relief for the Schools,” The New York Times, Oct. 13, 2001, p. A22.
continue, some areas of dispute remain.345 As of late November 2001, FEMA had
not reimbursed the New York City board of education for cleaning and
decontaminating schools.346 By early June, 2002, however, FEMA “told school
officials yesterday that it would reimburse $11.7 million spent in cleanup and
environmental testing since Sept. 11. The agency said it would eventually also cover
$5 million spent to clean schools in buildings leased by the Board of Ed.”347
New York University (NYU) reportedly was told by FEMA that more than $25
million in losses stemming from the September attacks would not be reimbursed
because it is not considered a “critical” public service.348 The inability of FEMA to
reimburse NYU stems from a provision enacted in the Disaster Mitigation Act of
2000 that distinguishes “critical” services from others.349
Background. The Stafford Act has historically been viewed as “bricks and
mortar” legislation that provided assistance in rebuilding structures. The Act
authorizes some assistance for service delivery costs or replacement (notably
emergency communications and transportation),350 but generally not for operating
losses or alternative services.
There is some historical precedent, however, for the provision of federal
assistance for school operations. Legislation enacted in 1965 (and subsequently
amended) authorized the commissioner of education in the Department of Health,
Education, and Welfare to provide disaster assistance to local educational agencies
“to provide free public education” to children attending schools that had been
One news report noted, “After much pressure and some negotiating, the Federal
Emergency Management Agency yesterday deemed most of New York University’s $9.5
million in expenses related to the Sept. 11 terrorist attacks eligible for reimbursement.”
Ellen Yan, “FEMA Agrees to Aid NYU,” Newsday, May 16, 2002, p. A28. Also see
“Findings and Purposes” in H.R. 4663, 107th Congress.
Timothy Burger and Alison Gendar, “Ed Board Wants Aid for Cleanup,” New York Daily
News, Nov. 22, 2001, p. 26.
Alison Gendar and Greg Gittrich, “Feds to Foot $11.7M Bill for School WTC Cleanup,”
New York Daily News, June 4, 2002, p. 10.
Karen W. Arenson, “N.Y.U. Gets a Rebuff from FEMA in Aid Quest,” The New York
Times, Feb. 23, 2002, p. B4.
42 U.S.C. 5172(a), 114 Stat. 1562. “(A) IN GENERAL. The President may make
contributions to a private nonprofit facility under paragraph (1)(B) only if—(i) the facility
provides critical services (as defined by the President) in the event of a major disaster; or
(ii) the owner or operator of the facility—(I) has applied for a disaster loan under section
7(b) of the Small Business Act (15 U.S.C. 636(b)); and (II)(aa) has been determined to be
ineligible for such a loan; or (bb) has obtained such a loan in the maximum amount for
which the Small Business Administration determines the facility is eligible.
(B) DEFINITION OF CRITICAL SERVICES. In this paragraph, the term ‘critical
services’ includes power, water (including water provided by an irrigation organization or
facility), sewer, wastewater treatment, communications, and emergency medical care.”
42 U.S.C. 5185, 5186.
disrupted by a declared disaster.351 The legislation also authorized aid for the
reconstruction of damaged school facilities, assistance not otherwise authorized until
1974.352 Disaster assistance for school systems was administered by the Office of
Education under the “pinpoint” disaster program.353 According to the the U.S.
Department of Education (ED) budget justifications for FY1992, “beginning in fiscal
year 1992, responsibility for disaster assistance will be transferred to [FEMA], where
it will be administered as part of the Disaster Relief Fund.”354 ED justified this
transfer as a means to reduce duplication, reduce administrative cost, and improve
the timeliness and effectiveness of federal disaster assistance to schools.
Subsequently ED’s authorities for disaster assistance were repealed in the Improving
America’s Schools Act of 1994.355
In addition to the “pinpoint” program, Congress authorized aid in 1966 to public
institutions of higher education for the reconstruction of facilities and operating
expenses. In language similar to that used for the pinpoint program, the statute
authorized the commissioner of education to provide (in addition to construction
funding) operations aid as follows:
to provide funds to such institution in an amount which he considers necessary
to replace equipment, maintenance supplies, and instructional supplies (including
books, and curricular and program materials) destroyed or seriously damaged as
a result of the disaster, or to lease or otherwise provide (other than by acquisition
of land or construction of academic facilities) such facilities needed to replace
temporarily those academic facilities which have been made unavailable as a
result of the disaster, or both.356
Policy Options. Congress might consider a range of policy options that
address the needs of educational systems after terrorist attacks.
Maintain the Status Quo. Some observers believe the Stafford Act’s
provision regarding the repair or reconstruction of damaged or destroyed public
facilities strikes an appropriate balance between federal and state and local funding.
The President has discretion under the Act to define “critical services.” Negotiations
P.L. 89-313, 79 Stat. 1158-1161, significantly amended by P.L. 90-247, 81 Stat. 783-813.
For citations to other amendments to this authority see: 20 U.S.C. 241-1, 646, 647,
“Historical and Statutory Notes.”
The 1965 Act authorized aid for the construction of school facilities damaged or destroyed
in a presidential disaster declaration issued pursuant to P.L. -875, enacted in 1950. In
1974 Congress authorized the President to provide assistance for the repair of non-federal
public facilities (P.L. 93-288). As a result, FEMA and the Office (later the Department) of
Education were both authorized to rebuild schools damaged or destroyed until the 1994
legislation repealed the latter’s authority.
U.S. Department of Health, Education, and Welfare, “School Assistance in Cases of
Certain Disasters,” Federal Register, vol. 41, Nov. 17, 1976, pp. 50776-59785.
U.S. Department of Education. Justifications of Budget Estimates. Fiscal Year 1992, p.
P.L. 103-382, 108 Stat. 3965.
Disaster Relief Act of 1966, P.L. 89-769, 80 Stat. 1318-1319.
with FEMA officials since the September 11 attack appear to have resulted in the
approval of funds previously disallowed for certain operations costs. Therefore,
interpretation of the Stafford Act or of other statutes such as the Safe and Drug Free
School Act, may be sufficient to respond appropriately to future needs of education
Pro. The reconstruction of damaged or destroyed facilities is arguably a matter
beyond the financial means of communities devastated by a disaster. Current law
does allow some administrative discretion to determine which damages are most
severe and require federal assistance. Federal assistance centered on public facilities
and institutions is likely to be more effective than if broadly dispersed.
Con. Various education institutions, public and private, in New York City have
incurred millions of dollars in losses that, to date, appear to be ineligible for federal
assistance. The costs of recovering from a terrorist attack include a wide range of
activities, not just repair or reconstruction of damaged or destroyed facilities.
Enact New Authority for Education Assistance. Broad discretionary
authority could be granted to the secretary of education to identify and help meet
needs of educational systems not met under the Stafford Act. For example, certain
terrorist acts, such as the release of chemical weapons in a school facility, could make
the structure uninhabitable for years without extensive decontamination. As a result,
temporary school facilities, and operating needs, might need to be established.
Pro. Such an authority could be used by Congress to target disaster assistance
funding for school-site disasters and would locate the oversight of the provision of
such funds in a department familiar with the needs and circumstances of state and
local educational agencies.
Con. Providing authority for separate school-site disaster relief could result in
similar problems that ED pointed to under the old program: duplication, confusion
among applicants, and possibly ineffective and delayed federal response. Creating
a separate role for ED in this arena could be seen by some as a major expansion of
the federal role in education, particularly with respect to areas, such as construction,
transportation, and teacher compensation, in which the federal involvement has been
Broaden FEMA’s Authority for Educational Assistance. Congress
might mandate that FEMA identify, evaluate, and respond to needs of educational
systems not currently met under the Stafford Act. This would effectively expand
FEMA’s responsibility beyond replacing “bricks and mortar” to providing assistance
to ensure that educational systems continue to operate after a terrorist attack.
Examples of assistance might include cleaning or replacing textbooks and other
school materials; providing transportation for students and teachers to alternative,
uncontaminated sites; providing counseling services; and decontaminating facilities
and public vehicles, such as school buses. Such a proposal has been acted upon by
the Senate. The supplemental appropriations legislation for FY2002 includes a
provision adopted by the Senate Appropriations Committee that would allocate
FEMA funds as follows:
In addition, the Committee directs that funding is to be provided to compensate
the New York City Board of Education for costs stemming from the September
11, 2001 terrorist attacks, for activities including additional classroom instruction
time, mental health, trauma counseling, and other support services; guidance and
grief counseling; clean-up and structural inspections and repairs of school
facilities; student relocations, lost textbooks and perishable food.357
Pro. A broader FEMA authority would help to ensure that school-related
assistance, which FEMA has at times been hesitant to provide, would be available
through the central federal agency responsible for disaster assistance in general.
Con. FEMA might lack the expertise and experience for dealing with and
understanding the needs of state and local educational agencies and individual
schools. This would be viewed as a major increase in federal responsibility for
decisions and actions that many might believe are more appropriate administered at
the state and local level.
Amend the “Critical Services” Provision. The cost-saving provision
enacted in the Disaster Mitigation Act (DMA) of 2000 that excludes non-profit
educational facilities from the “critical services” definition for permanent work might
be amended to include such facilities.
Pro. While the President has authority to define such services, the enactment
of legislation to specifically include educational facilities would obviate the need for
Members of Congress and state officials to negotiate with the Administration over
the provision of permanent work assistance.
Con. The needs of areas stricken by terrorist attacks could differ, and public
services other than educational systems might require assistance in the future.
Expanding the statutory definition of critical services would compete with other
pressing demands and would run counter to the cost-savings provisions in the DMA
U.S. Congress, Senate, Committee on Appropriations, Making Supplemental
Appropriations for Further Recovery from and Response to Terrorist Attacks on the United
States for the Fiscal Year Ending September 30, 2002, and for Other Purposes, report to
accompany S. 2551, 107th Cong., 2nd sess., S. Rept. 107-156 (Washington: GPO, 2002), p.
Decades of federal disaster assistance and, most significantly, the considerable
federal assistance provided after the September 11 terrorist attacks, suggest that the
federal government will continue to be involved in providing assistance to state and
local governments of areas attacked, or about to be attacked, by terrorists. The
current scope and boundaries of that federal aid could continue under existing
policies and administrative practices.
Questions have been raised, however, about some of the means by which
assistance was, or was not, provided after September 11, particularly in New York
City. Some have also expressed concern that the types and amounts of assistance
provided did not meet expectations or the precedents established after previous
disasters. While many expectations cannot be met, it may be argued that federal
policies could be reevaluated to ensure that needs are fully answered, services
efficiently delivered, and federal resources prudently allocated. As noted in
congressional testimony submitted by the comptroller general, a process of policy
evaluation might be of use to Congress as it considers many demands for federal
resources in the future.
Among other things, it is incumbent on the federal government to formulate
realistic budget and resource plans to support the implementation of an efficient
and effective homeland security program.... While we believe that a robust
homeland security program is critical to the nation’s protection and Properity, it
must be developed in a manner that is targeted to areas of greatest need and
avoids wasteful, unfocused or “hitchhiker” spending.... A fundamental review
of existing programs and operations can create much-needed fiscal flexibility to
address emerging needs by weeding out programs that are out-dated, poorly
targeted, or inefficiently designed and managed.358
Summary of Policy Options
In evaluating these and other issues that have been raised by concerned
observers and the media since September 11, Congress may exercise one or both of
two general approaches—(1) keep existing policies in place and address the questions
or issues through oversight activities, appropriations, or communications with the
Administration, or (2) consider new policies or changes to existing policies. The
policy options segment of each issue section in this report presents information on
the first option (“Maintain the Status Quo”). This option might be exercised because
insufficient information exists, reports of failures or deficiencies have been
inaccurate, or the existing policy, in the light of other pressing business, may be
adequate at least for now, among other reasons.
Congress might also elect to consider policy options in light of some of the
questions raised with regard to the assistance provided after the terrorist attacks of
U.S. General Accounting Office, Statement of David W. Walker, Homeland Security:
Responsibility and Accountability for Achieving National Goals, GAO testimony GAO-02627T (Washington: April 11, 2002), p. 3.
September 11. Should Congress consider new policies or policy changes, Members
may be called upon to evaluate options, each with costs and benefits, such as those
discussed in this report. Following are summary statements of the policy options
presented for each issue in this report.
Definition of “Major Disaster” and “Emergency”.
Increase the discretion of the President to determine when a “major disaster” or
an “emergency” has occurred (see page 23).
Expand the role of Congress in the process of the determination of whether a
major disaster or emergency has occurred (see page 24).
Enact a new statute to authorize the President to issue a declaration after any
terrorist attack (see page 25).
Extend the authority to issue an emergency declaration to other executive
branch officials (see page 26).
Eligibility for Stafford Act Assistance.
Qualify certain for-profit entities as eligible for Stafford Act grant assistance
(see page 32).
Amend the “critical services” provision of the Stafford Act to include other
public services (see page 33).
Federal Coordination of Recovery Assistance.
Create a special office to coordinate federal recovery assistance activities (see
Expand existing waiver authorities for federal agencies to expedite federal
recovery assistance (see page 40).
Increase funding and authorize funds for pre-disaster planning grants and other
recovery activities (see page 41).
10. Require the establishment of mechanisms to facilitate public involvement in
recovery decisions (see page 42).
Expedited Public Health Studies.
11. Amend the Public Health Service Act to authorize accelerated reviews of
applications to study public health threats (see page 46).
Tracking Federal Costs of Disasters.
12. Require that the Office of Management and Budget collect and publish
comprehensive data on federal disaster assistance costs (see page 51).
13. Require that the Department of Homeland Security, proposed to be established,
undertake responsibility for collecting disaster assistance cost data (see page
Local Government Revenue Loss.
14. Amend the Stafford Act to authorize the President to provide grants instead of
loans for tax revenue losses incurred by communities (see page 58).
15. Lower the interest rates charged on community disaster loans provided to local
governments (see page 59).
16. Eliminate the $5 million ceiling established in 2000 for the community disaster
loan program (see page 59).
17. Eliminate the community disaster loan program from the Stafford Act (see
Reimbursement for Security Alerts.
18. Enact new legislation to provide a range of assistance to states and communities
that incur high costs in responding to threat alerts issued by the Director of the
Office of Homeland Security (see page 65).
19. Detail National Guard units to federal law enforcement agencies to improve
readiness in high security alert areas or situations (see page 65).
20. Authorize the President to federalize National Guard units for security alerts and
to reimburse the units through the Stafford Act (see page 66).
21. Enact legislation to modify the structure and role of the armed forces in meeting
homeland security threats (see page 67).
Environmental Hazard Assessment and Communication.
22. Direct a “blue ribbon” panel or the National Academy of Sciences to study
environmental data collection, interpretation, and communication issues
associated with terrorist attacks and submit recommendations to Congress (see
23. Authorize the EPA to develop environmental hazard exposure guidelines for
emergency situations (see page 82).
24. Clarify authority regarding coordination of environmental monitoring and
analysis in the aftermath of a terrorist attack (see page 83).
25. Codify in statute procedures and roles currently embodied in the Federal
Response Plan or the National Contingency Plan (see page 85).
Indoor Air Testing and Cleaning.
26. Clarify EPA authority with respect to indoor air contamination (see page 89).
27. Reduce the discretion of the EPA to ensure protection of building occupants
(see page 89).
28. Modify the Stafford Act to establish health risk as a measure of temporary
housing needs (see page 93).
Small Business Assistance.
29. Enact legislation to proscribe subsidies that encourage businesses to relocate
from jurisdictions affected by disasters, and provide incentives to rebuild
affected areas (see page 97).
30. Mandate that federal facilities be built in disaster areas as a way to stimulate
economic activity for small businesses after terrorist attacks (see page 98).
31. Provide grants instead of loans to small businesses affected by terrorist attacks
(see page 98).
32. Require that federal agencies providing economic recovery assistance establish
a central registry of interpreters to assure communication with disaster victims
(see page 99).
Assistance to Education Systems.
33. Enact new authority for the secretary of education to identify and meet
education needs not met under the Stafford Act (see page 104).
34. Expand the authority of FEMA (or the President) to provide assistance to
educational systems affected by a major disaster (see page 104).
35. Amend the “critical services” provision of the Stafford Act to include
educational facilities (see page 105).