New Study Puts Sept. 11 Payout at $38 Billion

NY Times ^ | : November 9, 2004 | DAVID W. CHEN

[Former Military Chick]

The families or loved ones of civilians killed on Sept. 11 received, on average, $3.1 million in government and charitable awards. The families of those who died in uniform that day - including police officers and firefighters - received more, their average compensation exceeding $4.2 million. Insurance payments to businesses victimized by the terror attacks, for property damage alone, totaled $7.5 billion.

These figures, some exceeding earlier estimates, others never before captured, emerged yesterday from a formal study that was two years in the making. It aimed to be the most comprehensive accounting of how much victims and businesses affected by the Sept. 11 attacks have been compensated by private and public means - an effort by charities and government agencies unmatched in the country's history.

In all, the study, done by the Rand Corporation, a nonprofit research organization based in Santa Monica, Calif., found that victims and businesses have so far received $38.1 billion.

Insurance companies accounted for the single greatest share of payments, about $19.6 billion. Government entities, including payments to individual families as well as loans to small businesses near ground zero, gave out nearly $16 billion.

On page after page, the study gives more weight to the sense that the economic response to Sept. 11 has played out in ways both remarkable and uneven - "of a scope and scale never before seen," it says.

And it does not mince words: For one thing, it noted that the government was, at times, ill-equipped to handle the crisis, citing in particular the often criticized performance of the Federal Emergency Management Agency.

The study also questioned whether the payouts were fair to all victims, and it asked who should foot the bill in future terror attacks, especially given the fact that terrorism insurance for businesses is now harder to obtain than it was before Sept. 11.

"The system has raised many questions about equity and fairness that have no obvious answers," said Lloyd Dixon, a senior economist with the Rand Institute for Civil Justice, who conducted the study, along with Rachel Kaganoff Stern, an associate political scientist.

Mr. Dixon added, "Addressing these issues now will help the nation be better prepared for future terrorist attacks."

Called "Compensation for Losses from the 9/11 Attacks," the 173-page study is different from earlier efforts in that it looked at the financial aftermath of Sept. 11 from the perspective of the recipients, and not the agency or body handing out the money. The study stated, as part of its tabulations, that $210 million in government and private money was spent to help people who were traumatized.

The study included some of the $20 billion pledge that President Bush made shortly after Sept. 11 to help rebuild New York. And it also took into account the federal Victim Compensation Fund, which paid out $7 billion in awards to families as part of an effort to limit lawsuits against the airlines and other parties.

But the study did not include about $11 billion in federal assistance to New York for cleanup, overtime costs and transportation repairs, Mr. Dixon said. Nor did it include payments yet to come, chiefly from pending court cases and litigation costs, as well as continuing insurance disputes.

Still, elected officials and analysts who have reviewed the report said they were generally impressed with its ambitions and execution.

"It is a significant contribution to our understanding of the scope and complexities of victim compensation programs," said Tom Seessel, a social policy consultant in Hopewell, N.J., who has conducted three studies on Sept. 11 relief, financed by the Ford Foundation. Mr. Seessel, though, did say he thought the study could have done a better job in calculating compensation to some businesses and workers.

Representative Carolyn B. Maloney, a Manhattan Democrat who has been aggressive in tracking the response in Congress to Sept. 11, applauded the report, and claimed it had done what the government itself had failed to do - provide a thorough accounting of the economic costs of Sept. 11.

The likelihood that the families of uniformed personnel who were killed on Sept. 11 would receive greater payouts has been assumed for some time. But the Rand study demonstrates just how great the disparity has been - a difference determined chiefly by the array of charities set up for police officers and firefighters in the aftermath of the attacks.

The Rand study determined that the families of the more than 400 uniformed men and women who died, out of a total of 2,976 victims, received a total of $1.9 billion. On average, the families received, in addition to a $250,000 death award for public safety officers, an average of $880,000 more in charitable awards than civilians with similar economic losses.

The total amount of money paid out to the civilian dead from Sept. 11, the people on the airliners and in the offices in Manhattan and the Pentagon, wound up at $8.7 billion, with the greatest part of the compensation coming from the federal fund that calculated lost income.

The study also found that about $660 million was distributed to people who sought help because of exposure to dust and other potential health hazards near ground zero. Again, the federal fund, known as the Sept. 11 Victim Compensation Fund, provided the bulk of the compensation - roughly $380 million tax-free. But as a caveat, the study warned that "a major unknown is whether resources will be available to pay for health care for respiratory injuries that might appear in the future."

The study also sought, in certain instances, to break down compensation by geography. For instance, it determined that residents of Lower Manhattan received about $920 million - more than half of it from property insurance. Almost 10 percent of that figure came from private charitable donations.

The researchers also sought to document how much money was paid to people who worked in New York City and filed claims that they had lost jobs or income as a result of the attacks. It found that those workers received a total of $1.7 billion, with money coming from government grants, unemployment insurance - $600 million - and charity, which accounted for $540 million.

But by far the biggest recipients of assistance were businesses - $23.3 billion, to be exact. Of that amount, $7.5 billion came from insurance for property damage, and $9.5 billion for insurance for business interruption. An additional $4.9 billion came from government incentives, such as tax breaks and programs to attract small and large companies.

And yet, should there be a future attack, the study concluded, the circumstances could no doubt be different. Congress may decide not to establish a victims' fund. And despite passage of the Terrorism Risk Insurance Act in 2002, which would require the federal government to pay for most of the insurance losses in a catastrophic attack, "purchase of terrorism insurance after 9/11 has been spotty," the study said.

All the more reason, Mr. Dixon said, to plan ahead, because "the more we work this issue, the more we realize that compensation is an important part of the strategy to combat terrorism."

[Weirdad]

It's weird that I usually say what I want and don't worry much about it, but on this particular topic I really had to think about whether or not to hit the "post" button. It is water under the bridge but articles like this naturally prompt us to reexamine what happened, and it is nice to be able to discuss this with friends.

Bottom line: there is nothing good about getting attacked by cowardly criminal terrorist murderers. The blame all goes to Islamofascism. Any injustice we fell into is just another part of the damages they caused.

[GrandMoM]

BUMP

[endthematrix]

Re: Overall, this sets a dangerous precedent.

It's already been set, DC is just following through. Government siphons the money from your pocket and spreads it around at their discretion.,And it's always more than they have, creating a deficit that your grandchildren will pay for.

[OESY]

As one who lives in NYC, I thank the generosity of the rest of the nation while I apologize for the lack of gratitude by some 9/11 families for the Republican president and Congress that made that generosity possible. Many in New York and New Jersey were rabidly anti-Bush as election results reflect.

For the record, in my opinion, Kenneth Feinberg, the special master who administered the 9/11 Victim Compensation Fund, did an outstanding job under extremely difficult circumstances.

But the legislation set a dangerous and expensive precedent in the event of a similar attack.

The legislation also was unfair when compared to what others have received. That would include other families of victims of terrorism from Khobar to Oklahoma City.

It also includes families of our fallen military and of those who lost their lives when our state and federal governments failed to protect them by ensuring domestic tranquility and safeguarding life.

Is there any wonder why citizens want to have the means to protect themselves and their families?