Cost of Katrina Is Expected to Break Records
By Gilbert M. Gaul and Ceci Connolly
Washington Post Staff Writers
Thursday, September 1, 2005; Page A21
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/31/AR2005083102395.html
As Gulf Coast residents take measure of the devastating impact of Hurricane Katrina,
federal officials face a cleanup and restoration cost easily topping the nearly $7 billion
price tag of the 1994 Northridge earthquake in California, the single most expensive
U.S. disaster to date.
While estimates of the overall cost of dealing with the floods and other damage in New
Orleans and a wide swath of the Gulf Coast vary dramatically, some experts say the
combined public and private spending on Katrina could run into the tens of billions of
dollars.
"This is going to be the most expensive natural disaster that's hit the United States in
history," said Sen. Thad Cochran (R-Miss.), who intends to push for quick approval of
an emergency spending bill by his Appropriations Committee.
Last year, Congress approved two bills totaling $13.6 billion to cover the cost of four
hurricanes, according to a White House fact sheet. That included money for highway
repairs, military base evacuations, coastal restoration, national park cleanup, wastewater
treatment plant repairs, and the administrative costs of providing billions in low-interest
loans to small businesses and farmers.
The bulk of the money -- $6.5 billion -- went to the Federal Emergency Management
Agency for immediate help with food, housing, transportation and medical needs, and
longer-term assistance such as rebuilding property and providing legal, tax and mental
health counseling.
FEMA, which responds to natural disasters, had $2.5 billion in the bank when Katrina
stormed up through the Gulf Coast, said Scott Milburn, spokesman at the Office of
Management and Budget.
"I think it's fair to say this is going to be a record," said Michael Buckley, a deputy
director at FEMA who helps oversee the flood insurance program.
About one of every five properties with federally backed flood insurance coverage -about 1.3 million homes and businesses -- is located in an area swamped by Katrina.
The toll of those claims is going to be "astonishing," Buckley said.
Yet, even with its record-smashing potential, Katrina's impact is not entirely surprising.
Federal payments for weather-related disasters have grown dramatically in recent
decades, especially for hurricanes and floods, as more and more construction takes place
along the coasts. Often unnoticed, the financial impact has been huge, totaling more
than $31 billion in the last dozen years, according to FEMA figures, and forcing
government officials and Congress to borrow funds and issue emergency
appropriations.
As more storms pile into the coasts, the number of federal disaster declarations has
surged, from an average 13 per year in the 1950s to 52 per year so far this decade.
Federal disaster spending also has soared, from an inflation-adjusted $340 million in the
1950s to more than $25 billion in the 1990s, a review of federal disaster spending
records shows.
Hurricanes and coastal storms account for a growing share of the tab. Even excluding
Katrina, hurricanes represent eight of the 10 most expensive natural disasters in history,
ranked by FEMA relief payments. Five of the storms have made landfall since 2001,
signaling a return to what many meteorologists believe is a busier and more damaging
hurricane period than in recent decades.
Disasters also are growing more expensive. Federally backed flood claims totaled $2
billion last year, about double what FEMA pays in an average year, and the agency
borrowed $300 million from the treasury to cover claims.