Smith’s Research & Gradings Supports President Trump’s New Approach to Federal Disaster Response
Smith’s Research & Gradings supports President Trump’s new approach to federal disaster response in Los Angeles and North Carolina. “The National Infrastructure Advisory Council’s (NIAC) draft report presented last December, recommends exploring the use of Federal Block Grants to States for emergency assistance. The sovereignty of States needs to be the focus during local emergency, which the President has so forcefully inculcated,” according to Terence Smith, founder of Smith’s Research & Gradings.
“Municipalities have come to depend on FEMA as the ultimate insurer of last resort. This Pollyanna approach to municipal risk can best be expressed as using primary colors (red, yellow, blue) when the solutions require a whole of government response,” he said. “Real municipal recovery requires enormous contextual understanding and is highly nuanced in the use of real time analytics to see beyond the lagging disclosure practices in the old Federal process. As we have seen in California, some States are poorly prepared, and they need to bear the consequences.”
Natural disasters are growing in frequency and severity. Threats from malignant actors affecting critical infrastructure are rising. The Reimagining Disaster Response and Resiliency Subcommittee heard from nearly 50 experts from across the United States on aspects of disaster response, hazard mitigation, recovery, and resiliency.
“Smith’s Recovery Gradings for critical infrastructure assets and municipalities over the past three decades provided the world’s only database to support the findings of the NIAC report,” Mr. Smith said. “Smith’s Research & Gradings are an elegant and comprehensive approach to disaster management and risk reduction across our portfolio of 16 critical infrastructure sectors. What’s more, Smith’s Event Risk Gradings give quick visual clues to events moving as slowly as droughts and as swift as political event risks like terrorist attacks.”
Mr. Smith was a member of the NIAC’s Reimaging Disaster Response Subcommittee in 2024. His experience as Subject Matter Expert (SME) includes working for the U.S. Department of Energy on the rebuilding and restarting of the Puerto Rico Electric Power Authority (PREPA), keeping 1,500 North Carolina Senior Living facilities safe during COVID 19, and three decades of work with numerous State and Local municipalities.
Mr. Smith is a member of the American Society of Civil Engineers (ASCE) Committee on America’s Infrastructure (CAI). The CAI is in the process of finalizing the ASCE’s Infrastructure Report Card, which is slated to be released in March 2025. The ASCE Infrastructure Report Card is considered to be the most widely respected independent assessment of the nation’s critical assets.
NIAC’s top recommendations (below) represent essential steps to strengthening our nation’s preparedness and response capabilities and increasing resiliency to disasters.
Align FEMA’s Mission with Funding Levels
The Federal Emergency Management Agency (FEMA) is being asked to do too much – much of it outside its traditional role, such as facilitating response to the viruses West Nile and COVID-19. FEMA is being activated for about one major disaster declaration every three to four days while simultaneously managing hundreds of older open disasters. This pace is taking its toll both in funding and on the workforce. FEMA’s Disaster Relief Fund (DRF), through which it helps people and communities after a disaster, has frequently run on fumes. FEMA’s staffing for some emergency cadres dipped below 25% of the strength needed in 2017; in October and November 2024, some cadre staffing dropped below 5%. FEMA personnel are burnt out from constant deployments and the agency has challenges recruiting and retaining staff. The current situation is unsustainable. FEMA is not able to successfully carry out all the duties expected of it given current funding levels. Either additional funding should be provided, or its mission set should be refined.
Engage Americans in Disaster Readiness by Providing Better Awareness of Future Hazards and Arming Americans with the Ability to Prepare for and Insure against Disasters
Many briefers to the Subcommittee mentioned that FEMA has become the “insurer of last resort.” That is, households and communities are relying on FEMA assistance to make them whole after a disaster. But, at best FEMA assistance is a helping hand, and for a limited time. A homeowner impacted by a disaster gets an average of $5,000 from FEMA – not enough to pay for most disaster losses. The U.S. Small Business Administration (SBA) provides loans that must be paid back. Decades of experience show that people and communities fare better after a disaster if they have insurance. However, insurance for wildfires, earthquakes, floods, and other perils is increasingly unavailable or unaffordable. Insurance and reinsurance companies are dropping policies and departing various regions as the number and severity of disasters increase. The Federal government should work with state governments to improve the insurance market. States are key as, aside from the National Flood Insurance Program (NFIP), insurance is regulated at the state level.
• A nationwide public service campaign is essential to educate people that FEMA cannot fully restore their losses after a disaster and to clarify FEMA’s role in recovery.
• The NIAC recommends that Federal agencies providing immediate disaster assistance create a single, simple to use system to assist disaster survivors.
• The Federal government should work with state governments to improve the insurance market. States are key as, aside from the NFIP, hazard insurance is state regulated.
• FEMA and the NFIP should encourage all homeowners, landlords, and infrastructure owners to buy flood insurance. An insurance pool cannot remain viable if it only includes those most likely to file claims. Doing so would reduce the amount of money that Congress needs to allocate to bail out the program every few years. Currently, the NFIP has a $20.5 billion debt to the U.S. Department of the Treasury (USDT). Attempts to make the NFIP actuarily sound have coastal homeowners reeling at the higher costs.
• The Government-Supported Enterprises (GSE) Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) manage a total housing portfolio of over $7.5 trillion. GSEs should require all properties in their portfolio purchase flood insurance. Currently flood insurance is required only if the property is in the floodplain. This change can potentially dramatically increase the risk pool and make the program economically sustainable.
Share Accountability and Responsibility for Disaster Response and Resiliency All the major players in disaster response need to increase capability.
• The Federal government should raise the disaster threshold. This will place a greater responsibility for disaster response and resiliency on states. Before raising the disaster threshold, the Federal government should review previous studies and attempts to address it. In addition, the review should consider that a catastrophic event in a rural area may fall below the new threshold and potentially not receive Federal aid. The review should also consider if the disaster threshold should be a sliding scale. The NIAC notes that the President does have discretion under the Stafford Act to declare a Presidential disaster and thereby release Federal funding, whether the disaster threshold is met or not.
• The NIAC recommends that Federal agencies other than FEMA should be proficient in incident management, so that this burden does not always fall on FEMA when a national crisis or emergency (e.g., COVID-19) occurs. To accomplish this, the NIAC recommends that Homeland Security Directive-5 and Presidential Policy Directive 44 (PPD-44) be reissued to emphasize the practices that have made FEMA a pre-eminent disaster response agency, i.e., the National Incident Management System (NIMS) and Incident Command System (ICS).
• The NIAC recommends that state, local, Tribal, and territorial (SLTT) governments receive more Federal funding to enhance preparedness. The Emergency Management Performance Grant (EMPG) is the basic funding block for local emergency management. However, EMGP has not kept pace with inflation for the last 12 years. The NIAC recommends that EMPG funding be raised and that performance requirements are tied to funding. Disaster preparedness and response may become a national security concern. Cyberattacks, especially attacks on infrastructure, are rising. If there is a National Security Emergency where there are multiple, simultaneous attacks on the U.S. infrastructure, the Department of Defense (DOD) will be fully engaged, perhaps overseas, in its core mission of national defense. FEMA and states may have to rely on their own capacity to handle the response and recovery. As DOD has provided almost 50% of staffing for some catastrophic incidents, raising the national capacity to handle large disasters can be a deterrence to our enemies.
Build a Better, More Resilient America
Most American infrastructure is 50-100 years old or older and was awarded a low grade by the American Society of Civil Engineers (ASCE), according to Mr. Smith. He estimated that approximately 4,000 bridges in the United States are beyond repair and need to be replaced. And, he estimates there is a shortage of three to seven million homes nationwide. Smith’s 33rd Annual Affordable Housing Finance Conference will be hosted in Huntington Beach, California, on March 18-19 (advt.) In the next several decades, America will require an investment of billions and perhaps trillions of dollars to build new roads, energy grids, water systems, housing, and other infrastructure. The NIAC recommends implementing policies to build a 21st century, better and more resilient America that also reduces the burden of paying for disaster losses.
• The NIAC recommends that the Federal government reinforce the importance of building codes. Current building codes are designed for life safety and do not protect against major economic losses. The NIAC recommends that the National Institute of Standards and Technology (NIST) and standards bodies such as the ASCE define resilient building codes for each critical infrastructure. Standards (such as ASCE 73) take a long time to become codes and then be adopted by SLTT governments, and the NIAC recommends that the Federal government assist in expediting this transition.
• The NIAC recommends that the Federal government consider a tax deduction for homeowners and landlords that upgrade housing to meet resiliency codes. Every dollar invested in mitigation reduces future damages by $6.
• The NIAC recommends that the Federal government make disaster programs more streamlined and flexible. The NIAC recommends that FEMA’s premier disaster recovery program, Public Assistance (PA), be turned into a block grant. We recommend that the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant – Disaster Recovery (CDBGDR) be made a standing program so there are no delays in starting long-term recovery after disasters. Aside from reducing the complexity and delays associated with the current system, these two actions will allow SLTT governments to combine Federal funds more easily with their own funds and private sector funding to mount resiliency initiatives.
• The NIAC recommends that the Federal government review ways to encourage public-private partnerships (P3) in infrastructure development. The Subcommittee heard from a group representing 110 of the leading global infrastructure investors, amounting to a combined worth of $2 trillion in infrastructure investments across 68 different countries. The U.S. consistently ranks as the best place to invest in private infrastructure investment; however, the nation’s patchwork of P3 regulations makes such projects difficult to implement.
Enhance Disaster Response and Resiliency Through the Use of Data and Technology
Disaster response and resiliency programs are slow in adopting new technologies. The Subcommittee heard about an exception that shows the value of using new technologies. Massive wildfires have taken lives, destroyed housing and infrastructure, and burnt hundreds of thousands of acres. Leveraging a 20-year camera dataset from the wildlands, one jurisdiction is using artificial intelligence (AI) to rapidly locate and control small fires, preventing them from growing. The Federal government should encourage and facilitate data collection and the use of modern technology – such as tracking wind or water impacts on disaster, delivering effective public warning for fast-breaking events, and managing infrastructure with asset management technologies such as digital twinning. Furthermore, the Subcommittee is not the only entity focusing on changes to the disaster response and resiliency system. Numerous legislative efforts across the 117th and 118th Congresses underscore the need to reform disaster assistance, disaster recovery, and resiliency. There are currently eight active bills in the 118th Congress, many sponsored by legislators from states that have suffered many recent disasters, including Florida, Louisiana, Oklahoma, Mississippi, Kentucky, and North Carolina.
