(summarized by L. Wald from parts of "Earthquakes, Minerals and Me" by Robert E. Wallace, USGS Open-File Report 96-260)
Before the 1964 Alaska earthquake, there was little awareness of the earthquake hazard in the United States. A $2 million proposal to study the San Andreas Fault Zone in the early 1960's got nowhere. However, some important earthquake research and publications were done by several USGS authors beginning in the late 1880s.
After the 1964 Alaska earthquake, many USGS scientists participated in investigations, and the USGS produced 30+ articles in USGS series and outside journals. Two types of reports were produced - those that reported on the earthquake itself, and those that recommended federal responses to potential future earthquakes. The U.S. Coast and Geodetic Survey, which was to eventually become the USGS, produced a report on the earthquake also, which led to follow-up proposals, which eventually led to the National Earthquake Hazards Reduction (NEHR) Act of 1977.
In 1965, Frank Press, a prominent MIT seismologist, wrote an article slanted toward earthquake prediction and with the word in its title, which was widely mis-perceived to be a promise to predict earthquakes within 10 years. This misperception has plagued the field of seismology ever since. Seismologists have sought in vain for a reliable and consistent method to predict earthquakes to respond to expectations.
Instead, seismologists were able to come up with a probabalistic and deterministic approach as an answer; that is, a method whereby the chances of the occurance of an earthquake in an area can be estimated based on past events and current observations.
The engineering community was incensed by the article referring to earthquake prediction: they felt that the correct approach was to engineer structures to withstand earthquakes, not to try to predict nature. What followed was a long debate about what the nation should do to reduce the hazards of earthquakes.
In 1969 the USGS Director headed a committee of interagency government staff that wrote a proposal for a 10-year national earthquake hazards program, emphasizing earth sciences, and leaving large sectors out completely. The narrow focus and premature detailed budget alienated some "serious players".
In 1970 the Steinbrugger Report, so named after one of the authors, was released, which took into account all of the things that the 1969 report did not. This was a consensus-building document that allowed the effort to move forward.
Finally, in 1977 the National Earthquake Hazard Reduction Act was passed, and now an implementation plan had to be written, which was completed in 1978, and the NEHRP was finally underway. After each major urban earthquake, big policy changes still take place.
During the 1950s, the USGS participated in a program using the seismic signals from underground explosions, Soviet nuclear tests, to learn of the Earth's crust. This knowledge was important in the interpretation of the underground explosion signals. This successful project was phased out and the study of natural seismic events, earthquakes, was phased in. The Denver group involved in the previous project moved to Menlo Park, CA, a location in a state with plentiful earthquakes, where the National Center for Earthquake Research began. The name was changed to the Office of Earthquake Studies, and currently, the National Earthquake Hazards Program.
The USGS Earthquake Hazard Program is funded by the NEHRP money and also from other sources. NEHRP began with about $60-70 million each year (and inflation has slowly eaten away at it), about half of that going to the USGS.
For the complete report see "Earthquakes, Minerals and Me" by Robert E. Wallace.