May 20, 2004 | WebMemo on Department of Homeland Security

Homeland Security Dollars and Sense #1: Current Spending Formulas Waste Aid to States

The global war on terrorism will be a protracted conflict. And it will be a real war, a competition of action and counteraction against a living, breathing, thinking enemy. Wining long wars requires a sound strategy-a nation cannot simply spend its way to victory. Federal grants for homeland security programs are a case in point. Some would address the shortfalls in state and local capacity by throwing money at the problem. That is exactly the wrong approach. Spending a little bit of money on a lot of things does not achieve much of anything. The United States needs a strategic spending strategy that focuses on two goals that will make all Americans safer: creating a truly national preparedness and response system and expanding national capacity to respond to catastrophic terrorist attacks.


The formulas that drive the grant process are turning homeland security initiatives into state entitlement programs. Current funding formulas guarantee each state .75 percent of the funds available. As a result, 40 percent of funds are immediately tied up, leaving only 60 percent for discretionary allocations. In this manner, California, clearly a "target-rich environment" received only 7.95 percent of general grant monies, even though the state accounts for 12 percent of the nation's population. Wyoming, receiving .85 percent, accounts for only .17 percent of the population. This translates to $5.03 per capita in California and $37.94 per capita in Wyoming. Spending on U.S. territories is equally incongruous. In the last round of grants, the U.S. Virgin Islands received $104.87 per capita, the North Mariana Islands $53.68, and American Samoa $37.32.


Within states, rural, less populated areas often receive a disproportionate amount of money as well. For instance, in Iowa, the capital city of Des Moines, population 199,000, will be receiving $250,000. Sioux County, Iowa, with a population of 31,600, will be receiving $299,000.


Other spending is curious, too. Reportedly, California distributes its federal grants in base-amounts of $5,000 to each county, an amount so small that it is difficult to imagine how it could be used productively.


Even the Urban Area Security Initiative grants, monies targeted at major population areas that are also considered potential targets, produce some strange results. The three criteria used are population density (50 percent of the weight), presence of critical infrastructure (one-third), and finally, credible threats (about one-sixth). Using this formula, San Francisco, with a population of 800,000 and Los Angeles, with a population of 4 million, get about the same amount of money. As Rep Anthony Weiner (D-NY) correctly pointed out in recent Congressional hearings, this formula seriously undervalues actual intelligence and known targets.


The inequities of the current distribution mechanism demonstrate its serious flaws. Washington's formula-based system needs to be replaced by strategy-directed spending. Homeland Security Presidential Directive 8 (HSPD-8), due to be implemented this autumn, promises to bring more discipline, accountability, and strategic direction to the grant dispersing process. Congress has a role to play, as well. The Faster and Smarter Funding for First Responders Act (H.R. 3266) would establish many of the provisions of HSPD-8 in law[1].


Americans deserve better homeland security. The federal government can only achieve this aim by building a national system that will get the right resources to the right people at the right time-not by just putting states on another federal dole.


James Jay Carafano, Ph.D. is Senior Fellow in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.

[1]See the recommendations in "Homeland Security Grant Bill Needs Revision But Is a Step in the Right Direction,"Heritage Foundation Executive Memorandum No. 909.

About the Author

James Jay Carafano, Ph.D. Vice President for the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, and the E. W. Richardson Fellow