Jun 24, 2002
Press Release

Read the CRS Report

WASHINGTON: A Congressional Research Service report released today by New York members of Congress details current questions about federal policy with regard to disaster assistance and allegations of deficient administrative decisions related to the September 11th terrorist attacks. It also provides historical and legislative background on these issues and presents policy options for consideration by Congress in evaluating current disaster recovery authorities. Twenty members of the New York delegation to Congress, listed below, originally requested the CRS report.

Upon review of the document, some of the members of Congress from New York released the following joint statement: "Based on the sometimes rocky and uneven recovery process in New York after 9/11, there's a clear need for reform in the nation's disaster recovery procedures; the CRS report details where and how those reforms could be made. Because the administration has said a future attack is inevitable and that New York remains a primary location listed in public intelligence reports, we need to examine the quality of recovery procedures carefully as we move to reconfigure our homeland security system."

The members of Congress who originally requested the report are: Carolyn B. Maloney, Jerrold Nadler, Nita Lowey, José Serrano, Joseph Crowley, Charles Rangel, Steve Israel, Nydia Velázquez, Gary Ackerman, Maurice Hinchey, Vito Fossella, Benjamin Gilman, Gregory Meeks, James T. Walsh, Eliot Engel, Major Owens, Louise M. Slaughter, Michael McNulty, John LaFalce, and John E. Sweeney.

The full CRS document, titled, "Federal Disaster Policies After Terrorists Strike: Issues and Options for Congress"can be found at https://maloney.house.gov/sites/maloney.house.gov/files/documents/911recovery/Federal Disaster Policies After Terrorists Strike.pdf

Highlights of the 109 page document are detailed in the following four pages.

Contacts: Ben Chevat (Maloney) 202.225.7944, Gary Meltz (Engel) 202.225.2464, Elizabeth Stanley (Lowey) 202.225.6506, Dale A. Crowel (Serrano) 202.225.4363, Ellia Thompson (Slaughter) 202.225.8415, Michael Wojnar (McNulty) 202.225.5076, James Harris (Towns) 202.225.5936, Eric Schmeltzer (Nadler) 202.225.5635

Key Findings of CRS Report - "Federal Disaster Policies After Terrorists Strike:
Issues and Options for Congress":

(As Summarized by the Office of Congresswoman Carolyn B. Maloney)

Definition of "Major Disaster" and "Emergency"

The Stafford Act is the principal legislation setting out the authorities of federal agencies in responding to disasters and emergencies. Of the Act, the CRS report states, "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'" (p.14). The report notes that major disaster declarations are authorized only "when catastrophes have occurred due to such natural events as floods, hurricanes, and earthquakes or, 'regardless of cause, any fire, flood, or explosion'" (p.14).
The CRS reports clarifies that a "major disaster" is distinct from an "emergency declaration" that "imposes a limit of $5 million in assistance for each emergency declaration" (p.14-15).

Types of disasters that might not trigger a full major disaster declaration include:
1) a cyber-attack on computer systems, 2) contamination of the water supply, 3) small arms attack not involving explosives , 4) dispersion of radioactive contaminants, 5) dispersion of hazardous substances through civilian aircraft (p.15-16).

CRS policy options suggest "Increase Discretion of President," "Expand the Role of Congress," and "Enact new authority" as options for Congressional consideration (p. 23-25).*
*NOTE: all "Policy Options" sections in the CRS report include a section called "Maintain the status quo."

Eligibility for Stafford Act Assistance

The CRS report notes that for-profit enterprises are not eligible for Stafford Act grants after a major disaster declaration is issued and certain non-profit facilities are eligible for grants for the reconstruction and repair of damaged facilities [not the costs of operations after attacks] (p.26).

The CRS report states that, "The terrorist attacks of September 11th in New York City disrupted services provided by utilities, transportation, communication, educational and medical care facilities." The supplemental appropriations request by the Bush Administration to Congress requested $750 million for Community Development Block Grants (CDBG) to help meet these costs (p.27).

Estimates of costs in these areas, according to news reports cited by CRS, include: Con Ed - $340 million in additional costs after insurance coverage of $70 million; Verizon - $380 million in additional costs after insurance coverage of $1 billion; medical facilities - $340 million (p.28-29); NYC public school system - $200 million (p.101). The total estimated costs to this group of institutions from 9/11 is $1.26 billion.

Costs were incurred by medical facilities "as they shifted resources to meet the needs of the disaster victims, clean up of airborne particles from building interiors, and address other needs" (p.29).

The CRS report notes that "education" is not currently included in the definition of "critical services" under an amendment passed by Congress in 2000 that 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" (p.30).

As policy options under the eligibility for Stafford Act Assistance section, the CRS report presents,
1) qualifying certain for-profit entities for assistance after a major disaster like for-profit hospitals and utilities 2) adding other services deemed essential to the "critical services" provision of the Stafford Act, as amended, like educational systems, providers of counseling assistance, or aid to the homeless (p. 32-33).

Federal Coordination of Recovery Assistance

The CRS report states, "the magnitude of the destruction in New York City, the projected losses, 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" (p.31-32).

Of the policy option to "Create a special coordinating office," CRS states under its "Pros" (benefits) section, "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" (p.39).

Of the policy option to "Expand waiver authority," CRS states, "Statutory and administrative requirements placed on disaster assistance programs may at times delay the delivery of assistance." (p.40). In this regard, CRS notes that, "Some observers have suggested that (to allow federal agencies, upon request from a recipient government, to deobligate funds for one activity and obligate them to another activity) would allow New York City and New York state more flexibility in using federal funds for recovery projects " (p.40).

Another policy option listed is to, "Establish requirements for public participation," with the CRS report noting, "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 public participation" (p.41).

Expedited Public Health Studies

The CRS report notes that, "Despite the recognition of the needs and opportunities, some researchers postponed initiation of their [health] studies until funding could be secured. In the process, some opportunities for gathering data from victims and from the field may have been lost" (p.44).

Tracking Federal Costs of Disasters

The CRS report states, "The attack on the WTC and the Pentagon might have resulted in the most expensive disaster assistance effort in the nation's history. . . 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. . . The disaster assistance costs associated with September 11 appear to be almost twice the amount obligated for 'the decade high total of $4.4 billion' in FY1999" (p.47).

The CRS report states that 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" (p. 47).

Noting that, "considerable controversy has been reported regarding the needs of the educational system in New York City," the CRS report suggests, "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" (p.48).

Local Government Revenue Loss

"Areas struck by disasters or terrorist attacks 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 persists and may actually increase after the catastrophe" (p. 53).

The CRS report notes that the NYC Comptroller's office estimated that city tax revenues for FY2002 would be "$738 million less than currently projected" as a result of the attacks and that the maximum federal loan allowed to local governments in a declared major disaster is $5 million (p. 54). The CRS report also states, "It appears that the current CDL program is significantly underutilized given the number of disasters and affected jurisdictions. Since 1976, there have been 906 declared major disasters...However, only 64 loans resulting from 19 separate disasters have been approved" (p. 56).

In its policy options section, the CRS report lists changing the loan program to local governments to a grant program and eliminating the $5 million cap, among other options (p.58-59).

Environmental Hazard Assessment and Communication

"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. Four months after the disaster, residents and workers in the area continued to report respiratory difficulties and related problems" (p. 68).

"Release of some air quality information was delayed for weeks, reducing its utility to the community" (p68-69).

Policy options listed in the CRS report include, "Establish a Blue Ribbon Panel," "Develop Additional Exposure guidelines," and "Clarify Agencies' Authorities" (p.81-83).

Temporary Housing

The CRS report states, "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" (p.92). The CRS report lists as a Policy Option to "Establish Health Risk as a Measure of Need" (p. 93).

Small Business Assistance

"The September 11th 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"(p. 93).
As of May 22, 2002, the 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)" (p. 95).

"Compared to large firms, small ones seem particularly vulnerable to disaster impacts and losses" (p. 96).

Assistance to Education Systems

"The terrorist attacks of September 11 had broad impacts on the New York City 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" (p.99-100).

"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 11th attack indicate that different risks and threats must be addressed." The CRS report lists widespread trauma and health hazards in school systems as examples (p.100).

The report cites an estimate of costs incurred to the NYC school system at $200 million (p.101). The report also notes that many of the costs to the school system associated with 9/11 have not been covered by FEMA (p.102).

"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" (p. 102).

Policy Options listed in the CRS report include, "Enact New Authority for Education Assistance," "Broaden FEMA's Authority for Educational Assistance," and "Amend the 'Critical Services' Provision" (p. 104-105).