Clichés, Levees and Federal Funds

  • Share
  • Read Later

As Washington debates Medicare, taxes, deficits and the future of the budget, it’s become a cliché to say that Americans like big government but don’t like to pay for it.  Most clichés are true. And as the swollen Mississippi River barrels south toward New Orleans, you can see a stark example of that in the city’s flood protection.

Don’t worry: Experts don’t expect a Katrina-style catastrophe. The Big Easy had flimsy defenses against the Gulf, but it has excellent defenses against the river. And one of the main reasons is that the federal government covered 100% of the cost for the massive levees on the river, while the locals had to help pay for hurricane protection.

The river levees were built through the Mississippi River & Tributaries Project, a federally funded assault on the river that began after the great flood of 1927. It was designed to protect New Orleans from an 800-year flood, essentially a worst-case scenario. Unlike other Army Corps of Engineers flood-control projects, the MR&T has no local cost-share; it’s the water resources equivalent of war.

The city’s hurricane protection, on the other hand, was only designed for a 200-year storm. And since local officials had to pay 30% of the construction costs, and all of the operation and maintenance costs, they pushed for even weaker defenses.  In a 1982 letter, the Orleans Levee District urged the Corps to “lower its design standards to provide more realistic hurricane protection,” suggesting that 100-year protection would be fine. The levee district also helped block a Corps plan for floodgates to keep storm surges from Lake Pontchartrain out of the city’s drainage canals, because they didn’t want to pay the maintenance costs. The Corps built floodwalls along the canals instead, letting the enemy into the city, and the floodwalls collapsed during Katrina, which wasn’t even close to a 100-year storm.

It is no coincidence that most Army Corps boondoggles—including the ridiculous flood-control-for-a-floodway project that I wrote about last week —depend on powerful congressmen getting the local cost-share waived. When the beneficiaries don’t have skin in the game, they tend to push for Cadillac projects, and cost control becomes a problem; President Reagan’s 1986 cost-sharing increases were the most effective Corps reforms ever.

But while the MR&T is also a Cadillac project, it’s earning its keep this month. By contrast, we’re spending tens of billions of dollars cleaning up after the failures of Katrina–and the rebuilding of the ravaged New Orleans hurricane protection system has been fully federally funded. It’s also a cliché to say that an ounce of prevention is worth a pound of cure, but like I said, most clichés are true.

The levee examples are worth keeping in mind when we think about the health care costs that are the main driver of our long-term deficits.  For example, we could probably use some Reagan-style cost-sharing—like increased co-payments for elective procedures—to help reduce unnecessary Medicare payments. At the same time, there should probably be MR&T-style federal funding (supported by the taxes that none of us like to pay) for preventive care that we’d otherwise blow off. In any case, the history of levees is a reminder that we still expect government to protect us from disasters, and we’re not very good at protecting ourselves. What’s the cliche? Pay now, or pay later.

0 comments
Sort: Newest | Oldest