Flint Water Crisis

Should Uncle Sam Have to Cough Up Aid for Flint Lead Poisoning Victims?

Despite Sen. Lee's valiant fight against federalizing the Flint debacle, federal taxpayers will have to pay up


Flint Water Pollution
David A. Villa via Foter.com / CC BY

Michigan Sen. Debbie Stabenow is accusing her colleague, Sen. Mike Lee, Utah Tea Party Republican, of"grandstanding" for putting a secret hold on a $250 million bipartisan federal aid package she has ginned up to help Flint clean up the government-made lead-poisoning mess. Other liberals are lambasting Lee for holding relief to Flint residents' hostage to his ideological agenda.

Such accusations are really rich coming from folks who for decades kept absolutely mum as Flint's Democratic rulers robbed city residents' blind to pad the pockets of public sector unions. If they care so deeply about Flint residents, why did they not speak up when city politicos were racking up $1.1 billion in unfunded pension liabilities, money that could have come in handy in dealing with the current mess?

That said, it's not clear that Lee's hold will actually accomplish anything.

As I have noted, President Obama had previously arranged a $100 million phony-baloney aid package that basically repurposed money from the Clean Water State Revolving Fund that Michigan would have gotten anyway and handed it back to Michigan with the proviso that it be spent on Flint cleanup. Sen. Stabenow is going beyond that and scraping together $250 million from various federal pots. She claims that this won't lead to "a penny" of extra federal spending because much of it will be paid for by redirecting funds from the Advanced Technology Vehicles Manufacturing Loan program that subsidizes loans for auto companies.

Why this program? Because, Sen. Stabenow's Republican co-author on the bill, Sen. Jim Inhofe, explains without a hint of irony, "it is a failed program that hasn't been used in more than a year and has only issued five loans since 2008." In other words, don't kill a failed program that shouldn't have existed in the first place. Just find some other place to spend the money! (And then politicos wonder why Americans have so much contempt for them.)

But Sen. Lee is objecting to this ingenious little scheme because he claims that water infrastructure financing shouldn't be federalized. Michigan created the Flint mess and, he believes, Michigan should fix it by tapping into the state rainy day and surplus funds.

In general, I am super-sympathetic to Sen. Lee's position. As I have noted before, doling out federal money for Flint cleanup will "only create a moral hazard and make state leaders less accountable for screw-ups in future."

However, Sen. Lee's proposal is also far from satisfactory.

For starters, by urging the state to tap into its rainy day fund, he is asking Michigan leaders to do at the state level precisely what he doesn't want Sen. Stabenow to do at the federal level: Rejigger funds meant for one thing for something completely different. Michigan's rainy day fund is supposed to tide the state over during economic downturns when tax revenues plummet. To be sure, Michigan leaders haven't exactly covered themselves in glory by keeping their grubby fingers out of this fund. Indeed, most recently Governor Snyder diverted rainy day funds to "finance" Detroit's bankruptcy restructuring. But still—this is a fiscally irresponsible habit that should be discouraged not encouraged.

What's more, as I have also noted before, the Flint debacle happened because multiple government agencies failed at multiple levels, including the EPA at the federal level. It sat for months on its backside, refusing to alert Flint residents that their water was unsafe even after one of its own officer's found unacceptably high levels of lead in it. This is unconscionable given that EPA's whole reason for existence is that state and local government can't be trusted to protect water and air quality. Therefore, the feds have to take charge. But the EPA failed miserably in this task. So why shouldn't it be forced to pay up?

Sen. Lee claims that to the extent that the Environmental Protection Agency is responsible, Flint residents should sue the agency and then, if they win in court, they would get a settlement from the Treasury Department's Judgment Fund that is meant for precisely such purposes. There is certain logic to this. But Flint victims have a right to be incensed at federal officials whose response to obvious federal negligence that has endangered their lives and property is: "Sue me."

What's more, it is unclear if the EPA would, like most government agencies, be protected from liability lawsuits by the doctrine of sovereign immunity. If it is then Flint victims would be out of luck given that the legal burden required to successfully sue would be virtually insuperable. But maybe EPA would settle with them out of court. Indeed, "Sue and Settle" is something of a racket under which advocacy groups in cahoots with the agency sue — and instead of defending itself, the agency simply settles and uses the Treasury Judgment Fund to pay up.

Sen. Lee's spokesman Conn Carol acknowledges that federal taxpayers would be on the hook either way. "It's not perfect," he said in an e-mail, "but it is the system we have in place and it is still better than special pleading to Congress."

Sen. Lee deserves praise for at least looking for ways to force his colleagues to hew to some principles of honest accounting. It's a good fight but it is unclear what good it'll do. To the extent that the federal government doesn't pay up, Flint residents will suffer for no fault of their own (in fact, even the most generous aid package won't even come close to making them anywhere near whole). To the extent that it does, federal taxpayers will be screwed. So long as the government is in charge, its victims and taxpayers will remain at loggerheads.

If Sen. Lee really wants to do something, he ought to start a dialogue to fundamentally change the system. That means extricating water and other public utilities from the tentacles of government agencies and privatizing them so that they can be held directly accountable by consumers—and indirectly by regulators.

If Flint shows anything, it is that citizen health it too important to be entrusted solely to the government.