The Magazine

Money Can't Buy You Safety

The pitfalls of the homeland security shopping spree.

Jun 7, 2004, Vol. 9, No. 37 • By ELI LEHRER
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FROM MASSACHUSETTS mill towns to Southern California suburbs, local police, fire, and emergency management agencies are using a cascade of new federal homeland security grants to go shopping. They've bought some $6 billion worth of chemical weapons suits, emergency command centers, laser-assisted crime-scene-reconstruction devices, and other gadgets and gizmos purporting to help fight terrorism. But for all the new "boots and suits," the people who lead America's public safety agencies aren't satisfied. Through organizations ranging from the U.S. Conference of Mayors to the International Association of Chiefs of Police, they complain bitterly about the Bush administration's state and local homeland security policies. And with reason.

The Department of Homeland Security, they say, is both too centralized and not centralized enough: It funds wish lists but provides little strategic guidance. It devolves powers to the states that belong at the federal level, while ignoring the on-the-ground concerns of local police and fire agencies.

New York City is a case in point. Although it has received at least $200 million in grants to buy hardware, and the police and fire departments have redeployed personnel and remade command structures, the Big Apple might have difficulty responding to a second major terrorist attack. The 9/11 commission was right when it observed in May that serious coordination problems hampered the evacuation of the Twin Towers. But three years later, New York City's police and fire departments still lack a workable joint command structure for allocating resources during a crisis. While radio communications have improved, the metropolitan area has no unified strategy for distributing information to the more than 600 public safety agencies that would have immediate concerns if Manhattan were attacked again.

Given the vast scope and complexity of the challenge, it is hardly surprising that homeland security policy still falls short. One process reform, however, that could curb the misplaced focus on acquisitions and pay large dividends in improved planning and response capability at the local level is a change in the way Washington sends money to localities.

With minor exceptions, the programs that Congress and the Bush administration have rolled out since 9/11 have provided block grants. Block grants are to states and localities what entitlements are to citizens: money that flows to them automatically from the federal government. Most of the money goes to state bureaucracies, which keep some of it for overhead, then pass most of the rest down to localities.

Block grants serve a variety of purposes. The Transportation Security Administration, for example, has given grants to ports and airports to improve baggage and cargo-container security. The Justice and Homeland Security departments, meanwhile, hand out money on the basis of formulas that can include anything from a state's population to the number of ships that call at its ports. But these formulas are not always fair; for one thing, they inevitably give a minimum sum to every state, regardless of population or density of vulnerable sites. Thus, in a round of grants released in April, Wyoming got nearly $39 per citizen while New York state, home of the nation's number one target, got less than $6. Nevertheless, the administrative simplicity of formula grants, and the lure of easy money for their recipients, have made them popular with Congress. Sen. Hillary Clinton has pushed hard for a $3 billion program to give homeland security block grants directly to cities.

But there's a better way to hand out funds for public safety. The first Bush and the Clinton administrations relied on competitive program grants. To win these grants, states and localities had to submit proposals designed to demonstrate that they had come up with the best possible use for a given pot of money. The proposals were then ranked by experts theoretically insulated from political pressure, and the best were awarded funds. In reality, the process is a lot messier--nearly all major competitive grant programs ensure that every state gets at least some money and that small towns with modest grant-writing resources get their share. Still, competitive grants offer three advantages: They encourage innovative thinking, they allow the designers of each competition to provide implicit strategic guidance without intruding upon local prerogatives, and they are likelier to send money where it will be used well.