Michigan's state and local officials poisoned Flint's water with lead but innocent federal taxpayers are the ones havingBert van Dijk via Foter.com / CC BY-NC-SAto foot the cleanup bill. President Obama has pledged to hand Flint $85 million in aid money. This sounds like a lot, but the fact of the matter is that it is far less than what Flint's victims would have gotten if a corporation — rather than government — had been the culprit. That's because, unlike private companies, the government is shielded from liability lawsuits.
This would be an excellent argument for the wholesale privatization of public utilities, but, alas, privatization is a dirty word in the liberal lexicon.
After initially giving Michigan Governor Rick Snyder only $5 million in going away money to help Flint residents buy water filters and bottled water, President Obama finally acquiesced this week to pleas for more help and authorized another $80 million. Now he's also considering Snyder's request for extending Medicaid eligibility to all Flint children up to age 21 regardless of their income or insurance status.
Setting aside the Medicaid expansion, the $85 million in federal aid combined with the$28 million in state aid that Snyder has arranged, works out to on average $1,000 for each of Flint's 99,700 residents — or about $4,000 for a family of four.
But consider the horror they are confronting:
As has been widely reported, 6.4 percent of Flint's nearly 8,500 kids are now testing for dangerously high lead levels in their blood stream — up from 3.6 percent before the city switched them from Detroit water to toxic Flint River water. Many of these children have developed rashes and brittle bones and face the prospect of permanent brain damage, diminished IQ, and behavioral difficulties. But kids are not the only ones hurt. Around 85 people have been diagnosed with Legionnaire's disease — a particularly horrible form of pneumonia — compared to around six to 13 in a normal year. Ten of them have already died.
Even if Obama expands free Medicaid for all Flint children, the rest of the medical bills — deductibles and co-pays — for middle-income Flint families will be substantial. Nor is that their only financial exposure.
The lead poisoning occurred because Flint failed to treat water with phosphorous, something that corroded the coating inside city pipes and home plumbing, allowing lead to leach in. Though switching back to treated water has diminished the lead content for now, the danger of lead poisoning will always remain unless all the piping is refitted. But replacing city pipes will cost up to $1.5 billion. This would be difficult for even a financially healthy city, let alone one that can't even pay its existing bills and has unfunded pension liabilities of $1.1 billion.
What's more, each homeowner will face at least $4,000 to install a new water heater, plumbing system, and a new service line connection, as TheWashington Postpoints out. And then of course there is the hit to Flint's already declining property values as the city further cements its reputation as an irremediable basket case.
It is an understatement to say that Flint residents are in for some very tough times. But compare the pittance that they will get to the compensation that General Motors and Toyota crash victims received.
GM had to pony up $35 million to NHTSA (National Highway Traffic and Safety Administration) and $900 million to the Justice Department in penalties for the faulty switch in its 2005 Cobalt that was linked to 125 deaths and 250 injuries. What's more, despite the totally deplorable liability shield or immunity from personal injury lawsuits the automaker received from the Obama administration as part of its 2009 bankruptcy restructuring, it still paid $625 million in compensation to the victims. And of course it recalled and fixed all the 2.6 million affected vehicles. All in all, it was down $1.5 billion.
But Toyota coughed up more than double that amount for its suddenly accelerating vehicles that resulted in 12 deaths and 31 accidents. It paid $1.2 billion in fines to Justice and $35 million to NHTSA and fixed all the vehicles, of course. In addition, it made an out-of-court settlement for an undisclosed amount that was likely more than what GM paid to each victim. But the real kicker is that, because it did not have GM's liability shield, it also paid $1.6 billion to all Toyota owners for the loss of the resale value of their cars.
Compare all of that to the $115 million or so that Flint victims will receive!
The main reason that they don't have a prayer of collecting much more is something called the doctrine of sovereign immunity. Under this doctrine, citizens are barred from suing their government for screw-ups that it has caused in the course of discharging a core function unless the government itself consents. Some very narrow exceptions exist but it is very difficult to make them stick.
Some activist lawyers in Michigan have come up with a creative constitutional argument to try and surmount the sovereign immunity hurdle. They have filed a class action lawsuit on the grounds that the government failed to provide Flint residents with equal protection under the 14th Amendment. But this rationale is a stretch that many plaintiffs' lawyers are having trouble buying. Indeed, Reuters reported that law firms representing Southern California residents in their own class-action lawsuits against the recent gas leak caused by Southern California Gas Co, owned by the non-governmental Sempra Energy, have so far declined to participate in the Flint lawsuit because they don't think this reasoning will work.
Scrapping or at least circumscribing sovereign immunity may be worth considering although that isn't a great answer because it will only expose taxpayers to liability for snafus they have not committed.
Privatizing water utilities so that they can be held accountable by strong regulators and courts might be a better solution, as Stephen Carter points out in Bloomberg View. The penalties that private companies would have to pay would be an automatic motivation to minimize Flint-style scandals, especially if they are slapping homeowners with a $150 a month bill as Flint authorities have been doing (talk about greed!). And when these companies do allow them to happen, it would be easier to hold them accountable.
But don't stand on one foot waiting for a privatization program to catch on because in liberal land privatization is anathema. Liberals consider clean, drinking water a "public good" that ought to be immune to privatization and the profit motive. TheWashington Post's Dana Milbank, hilariously enough, even tweeted: "Flint isn't a failure of government at all levels. It's a failure of Gov. Snyder's private-sector theology." Never mind that the Flint water system is owned and operated by the government from top to bottom.
Flint ought to be a wakeup call for liberals to stop putting religious faith in government. Until they smell the (clean water) coffee, future victims of future Flints will suffer without relief.
A version of this column originally appeared in The Week.