In order that we may be in a better position to more knowledgeably address this important question, however, I feel that we must first take a closer look at key program components and their locations in the Federal Budget. For the most part, almost all Federal disaster relief and related insurance programs are lumped together in subfunction 453 and included under the Community and Regional Development budget function. Programs and agencies comprising this subfunction include: national flood insurance funded under the Department of Housing and Urban Development (HUD) and administered through the Federal Insurance Administration; federal disaster relief listed under funds appropriated to the Federal Disaster Assistance Administration in HUD; disaster loans made available through the Small Business Administration; and emergency conservation measures funded and administered by the Agricultural Stabilization and Conservation Service (ASCS) of the Department of Agriculture. Similarly, all disaster-related farm income stabilization programs are contained in subfunction 351 and included under the Agriculture budget function. Under price support and related programs funded through the Commodity Credit Corporation, disaster payments amounting to one-third of the target price for selected crops are available. In addition, the Agricultural Credit Insurance Fund of the Farmers Home Administration administers an emergency loan program to replace equipment and livestock either damaged or destroyed by natural disasters. All such farm income stabilization programs fall under the purview of the Department of Agriculture for budgetary purposes. With respect to what has already been spent in these two subfunctions for disaster assistance and disaster-related price support payments over the recent past and what has been requested for FY 1978, a summary of such federal assistance is presented in Tables 4 and 5 for budget authority and outlays respectively. It should be noted that these tables illustrate budgeted federal assistance for damages caused by all types of natural disasters, not just drought alone. TABLE 4.-FEDERAL DISASTER ASSISTANCE SINCE FISCAL YEAR 1975-BUDGET AUTHORITY TABLE 5.-FEDERAL DISASTER ASSISTANCE SINCE FISCAL YEAR 1975-OUTLAYS Returning now to our question concerning an appropriate level of funding for disaster-related programs in the FY 1978 Budget, it is readily apparent from these tables that glaring deficiencies exist in the President's revised budget request for such activities. Perhaps the most incredulous discrepancy can be found in the disaster relief program under funds appropriated to the President. Requested budget authority for this program in FY 1978 is exactly half of the FY 1977 figure. Similarly, requested outlays for this program in FY 1978 are fully onethird of those estimated for FY 1977. If anything FY 1978 disaster relief funds need to be larger than those earmarked for FY 1977 as a result of continuing severe drought throughout much of our West and Midwest. And even if this blight against the land were to end miraculously before the actual start of FY 1978, water deficit carryovers and longer term economic impacts would still be severe enough to warrant additional assistance. The same argument can be made regarding restoration of the Small Business Administration program to levels greater than or equal to those of FY 1977. Therefore, as we begin to make final preparations for markup of the First Concurrent Resolution for FY 1978, I strongly urge each and every one of you to take a closer look at our disaster assistance programs with an eye toward frontauthorizing an additional $220-300 million in budget authority and $330-400 million in outlays for budget function 450. In addition, I hope that you will consider inclusion of strong language stating that such increased funds are intended principally to help mitigate the economic impacts of continuing drought. Moreover, we may find that such timely action now may forestall either having to pass another urgent supplemental appropriation as we did this year, or the need for a subsequent resolution beyond the second concurrent resolution. After all, why should we set ourselves up for a modified Second or even a Third Resolution for FY 1978? I am sure that you will give this matter your closest attention. Thank you. SELECTED OBLIGATIONS AND EXPENDITURES FOR DISASTER RELIEF PURPOSES, 1949-1976 18, 415, 159 484, 637, 600 299, 341, 940 4. Department of Agriculture.-- 5. Federal Highway Administration (formerly Bureau of Public Roads). 6. U.S. Army Corps of Engineers.. 7. Veterans' Administration... 8. Office of Education..... 9. Federal Insurance Administration....... Total.. Cost of food commodities and coupons provided dis- Losses on VA home loans, because of disasters (approx- Repair, restoration, and reconstruction of disaster 2,000,000 102, 330, 691 46,774,000 4,051, 761, 768 1 Table from p. S2221, Congressional Record, Feb. 26, 1974. Analyst, American National Government, Government Division. FEDERAL DISASTER ASSISTANCE ADMINISTRATION OBLIGATIONS FOR DECLARATIONS OF EMERGENCIES AND MAJOR DISASTERS FOR PURPOSE OF DROUGHT Note: These loans are for "all" emergency loans and not for the purpose of drought only. APPENDIX B Farmers Home Administration emergency loans for drought purposes, 1976-77 NOTE.-FHA is unable to supply amounts for years prior to fiscal year 1976. Disaster payments under the Agriculture and Consumer Protection Act of 19731 Crop year: 1974 1975 1976 (incomplete) --- Total payments $525, 000, 000 283, 000, 000 419, 000, 000 1 These payments are made to eligible producers of wheat, feed grains, and cotton who are either prevented from planting by a natural disaster or whose harvested yield is a substantial percentage below expected normal production because of natural disasters. We have been informed that there is no way (in available time) of separating out the amount of payments made for drought purposes from other natural disasters, so the statistics above reflect losses from other causes such as flooding, hail, wind, etc. NOTE. It is estimated that an additional $25 or $30 million will still be paid for the 1976 crop year. |