Even before the one-two punch of hurricanes Helene and Milton struck the Southeast this fall, FEMA’s disaster relief fund (DRF) was running low on funds. Recognizing that it did not have enough to meet all of its existing and anticipated obligations, FEMA was forced to invoke an emergency measure known as Immediate Needs Funding on Aug. 7, pausing all payments from the relief fund except for activities necessary to save and sustain life. Operating in this limited capacity for nearly two months meant that funding for essential long-term recovery efforts and disaster mitigation projects was put on hold. While it is critical that FEMA has enough funding to manage immediate hurricane response efforts in the short term, we need an approach to funding disasters that doesn’t regularly force FEMA to choose between short-term needs and essential longer-term investments.
This recent underfunding of the DRF is not an outlier. There is a consistent pattern of the fund relying on supplemental appropriations to remain solvent and FEMA implementing immediate needs funding when the supplemental funds fail to materialize in time. The Congressional Budget Office reports that of the $381 billion appropriated to the DRF between 1992 and 2021, nearly three quarters of it came from supplemental appropriations—special bills passed by Congress to provide additional funding for unforeseen needs. The DRF has required supplemental appropriations in six of the past 10 years, and FEMA has invoked immediate needs funding 10 times since 2001. A recent report from the Congressional Research Service noted that one of the reasons the fund regularly runs low is a funding formula that looks only at disasters that have already occurred, without accounting for the potential costs of new storms. While there have been some DRF funding increases in recent years, these efforts have not been enough to keep pace with the growing need.
Although Congress has always provided needed funds eventually, allowing the long-term projects to resume, these lapses in funding have real consequences. When the DRF ran low last year, the Congressional Research Service estimates that $8 billion set aside to rebuild from previous disasters as well as for projects intended to reduce future risk—known as mitigation—became temporarily unavailable. While these projects are not as time-sensitive as the critical rescue and relief efforts currently taking place across the Southeast, timeliness still matters. Unnecessary delays mean that important public infrastructure takes longer to come back online, local businesses and economies take longer to recover, and the chance that the next storm could strike before a project is finished increases. Delays can also increase the total cost of these projects as inflation drives up costs over time.
The good news is that Congress has shown a willingness to make disaster budgeting more proactive and can do so again. In the years leading up to 2018, rapidly growing wildfire suppression costs for the U.S. Forest Service and Department of the Interior were eating into the agencies’ funding for nonsuppression activities. To pay for the immediate crisis of protecting communities from active fires, these agencies were forced to divert funds from other activities, including fire mitigation work. Recognizing that this was unsustainable, Congress implemented a solution known as the Wildfire Funding Fix. This was a separate fund for fire suppression that the agencies could tap during bad fire seasons. In the years since this fix was implemented, it has protected the nonsuppression parts of the agencies’ mission and ensured that resources remain available for proactive planning to begin to manage this growing threat, while addressing immediate fire suppression needs.
The success of the Wildlife Funding Fix offers an important lesson. Realistically assessing the immediate response needs and providing sufficient funding protected longer-term priorities, too. But this fix is set to expire in 2027. So, as Congress considers its renewal, it should learn from this success and ensure that funding for immediate disaster response continues to meet actual needs so that essential long-term projects don’t become an afterthought. A similar lesson holds for sufficiently funding the DRF.
In July 2023, the community of East Middlebury, Vermont, made headlines for a flood that didn’t happen. While multiple days of heavy rain caused devastating floods across much of the state, the river in East Middlebury largely stayed within its banks and did not cause a repeat of the severe flooding and forced evacuations that occurred 12 years earlier from Tropical Storm Irene. Local officials credited this to a $2 million flood prevention project that was mostly funded with grants from FEMA and completed in 2021, two years before the second storm hit. This is an example of why the focus on long-term mitigation and recovery projects matters. Federal policymakers should be careful not to create unnecessary delays that could prevent the next project from being completed before the next disaster strikes.
Peter Muller works on The Pew Charitable Trusts’ managing fiscal risks project.