FEMA Overhaul

[TyrannyoftheMind.com (Julie A. Fragoules)]

FEMA became a part of DHS one year before I began working for the agency as a disaster assistance employee. In my twenty years as a reservist, I have seen a lot of changes, some great work but a lot of disfunction. I have the following suggestion for reform. This designed to:

• Enhance local disaster response capabilities by allowing local management and cheaper, quicker deployment of staff and ensure staff are familiar with the region’s people, customs, previous disasters and resources.
• Reduce costs by eliminating federal offices and positions
• Simplify personnel and operational management
• Make insurance cheaper with more options available

PART 1 – Move FEMA to regional and state control

1. Redirection of FEMA management:

• Objective: Decentralize FEMA’s operations by moving all headquarters functions to the existing ten regional offices under the direction and control of the member states (includes renaming regional organization as Joint Emergency Management Operations (JEMO).
• Action Plan:
  • Transfer all administrative, policy, and operational functions to the regional offices. This will include:
    • Eliminate or transfer FEMA staff to regional offices based on their expertise and the needs and determination of the region. To include:
      • Reassignment of current FEMA reserve employees and full time deployable core positions to the region of their Residence of Record
        • Encourage the retention of employees long-term by offering extended health insurance and comparative retirement benefits
      • Incentives for HQ staff relocation or voluntary separation packages where applicable and necessary.
      • Eliminate key leadership roles like the Administrator and Deputy Administrator.
    • Establish oversight and control of FEMA regions by member states
    • Develop cooperative agreements between regions for the sharing of resources, technical information and expertise, as well as deployable staff to meet shortages during large events, and shared training resources and staff.
    • Establish a state or regional position to oversee the response of volunteer agencies active in disasters in coordination of state and local government.
    • Regional management of Hazard Mitigation grant funding to governmental departments and agencies (excludes NGOs).
    • Establishment of regional management of new grant funding under the oversight of member states.
  • Identify resources/capabilities which only the federal government can provide (such as the National Guard and U.S. Army Corps of Engineers), assign overview of these operation to an office in the Department of Defense, and develop a plan for use of these resources upon the request of effected states. This may include:
  • Close or repurpose FEMA’s headquarters in Washington, D.C.

3. Funding:

• Objective: Shift from a centralized funding model to one where states have more autonomy in managing disaster preparedness, response, and recovery funds.
• Implementation:

o Stop all new FEMA grant funding to NGOs.

• Establish Block Grants:
  • Replace specific federal grants with a block grant system where states receive a lump sum for disaster management
  • Reallocate funding of federal operations proportionally to the regions.
    • Funds could be allocated based on historical disaster data, population, risk assessments, and state capacity, and also be adjusted for inflation.
  • Devise a long term solution that will eliminate the federal government as the funding middle man, instead allowing states to keep a proportional amount of their federal tax dollars for a state disaster fund and the state’s contribution toward the provision of regional offices as approved by the states.
• State Administration:

· States would take responsibility for administering these funds, deciding how best to allocate resources for preparedness, mitigation, response, and recovery within their jurisdiction. Because some states might lack the infrastructure or expertise to manage these funds effectively, new grant management could be managed on a regional level, with overview by state leadership, while ensuring accountability and transparency.

* Provide for state overview of regional operations through a panel representing the state governors.

4. Oversight and Funding:

• Congress would have direct oversight of the federal operational response.
  • So long as federal funding is involved, the DOD oversight office will review expenses and adjust distribution of federal dollars to ensure equal treatment.
  • Once funding is derived entirely from the percentage of federal taxes withheld by the state, all oversite will be conducted by the states in regional cooperation.
• States would have complete oversight of state and regional JEMA offices.

PART 2 – REFORM INSURANCE REGULATION

Phase 1: Eliminate the National Flood Insurance Program (NFIP)

1. Legislative Action:

• Congressional Bills: Draft and pass legislation to phase out the NFIP. This could be part of a broader insurance reform package or specific NFIP legislation.
• Sunset Clause: Introduce a sunset date for the NFIP, giving time for transition, perhaps 3-5 years.

2. Transition Strategy:

• Gradual Wind Down: Slowly reduce the number of new NFIP policies while allowing current policies to run their course without renewal.
• Mandatory Purchase Requirement: Replace the federal mandate for flood insurance in flood-prone areas with state or local laws or remove it entirely, leaving it to lenders or zoning regulations.

3. Consolidate NFIP and U.S. Army Corps of Engineer risk mapping capabilities under the management of the Corps.

Phase 2: Enabling Insurance Across State Lines

1. Deregulation of Insurance Markets:

• Federal Legislation: Pass laws allowing insurers to operate nationwide under a single regulatory framework or the home state’s regulations. This would require:
  • Federal Oversight: Establish or empower a federal body to oversee interstate insurance operations or expand the role of the National Association of Insurance Commissioners (NAIC) to standardize practices.
  • Regulatory Harmonization: Mandate states to recognize licenses and regulations from other states to reduce barriers to entry.

2. Consumer Protection:

• Uniform Standards: Develop uniform standards for insurance products to ensure consumer protection while allowing for innovation.

3. Market Entry Incentives:

• Tax Incentives: Provide tax credits or deductions for insurance companies expanding into new states or offering new types of coverage like flood insurance.

Phase 3: Consider Options to Incentivize Flood Insurance Provision

1. Financial Incentives for Insurers might include risk pooling, tax credits or catastrophe bonds
2. Encouraging Risk Assessment and Mitigation:

• JEMO Grants for Mitigation: Offer grants or low-interest loans for property owners to undertake mitigation measures that reduce flood risk, thereby making properties more insurable.
• Data Sharing: Facilitate or mandate the sharing of flood risk data between federal agencies, states, and insurers to improve risk assessment and pricing.

3. Public Education and Awareness:

• Launch JEMO regional or multi-regional campaigns to educate the public on the importance of flood insurance, even outside traditional flood zones, the existence of risk mapping and other hazard mitigation resources.

4. Innovation and Technology:

• Technology Incentives: Support the development and use of advanced flood modeling and AI for risk assessment, offering incentives for companies adopting these technologies.
• Insurance Products: Encourage the development of new insurance products like parametric insurance for floods, where payouts are based on certain measurable events (like water levels) rather than traditional loss adjustment.

Phase 4: Implementation and Monitoring

1. Monitoring and Adjustment:

• Establish metrics to monitor the impact on coverage, affordability, and market stability.
• Be prepared to adjust incentives or regulations based on market response and consumer impact.

2. Stakeholder Engagement:

• Engage with insurance companies, consumer groups, state regulators, and real estate markets to ensure the transition is smooth and effective.

3. Contingency Planning:

• Consider a federal backstop for extreme events to prevent market collapse, similar to what exists for terrorism insurance.

[SueK (Susan)]

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