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Another year, another disaster aid gap as funding deadline nears

Emergency fund expected to run out of cash in August, while Congress is out of session

Rep. Henry Cuellar, D-Texas, says FEMA shortfall is one of several that spending negotiators are trying to work out.
Rep. Henry Cuellar, D-Texas, says FEMA shortfall is one of several that spending negotiators are trying to work out. (Tom Williams/CQ Roll Call file photo)

For the second year in a row, the Federal Emergency Management Agency’s disaster relief fund is facing a summer shortfall smack in the middle of hurricane and wildfire season.

The problem isn’t lost on congressional appropriators or the White House, which requested an additional $9 billion for the fund back in October. Still, it’s not clear whether the final fiscal 2024 Homeland Security Department spending bill due March 8 will provide a vehicle for more disaster aid money.

Shoring up the disaster relief fund is “a topic in ongoing conference discussions” on final appropriations bills, a Senate aide familiar with the talks said. Another aide said ensuring FEMA has enough cash is a “priority” both for the administration and appropriators, though it was too soon to say how or when more funds would be provided.

FEMA’s latest monthly report shows the disaster aid account sinking into deficit starting in August, after burning through tens of billions of dollars on projects stretching back to Hurricane Maria in 2017, through ongoing pandemic-related costs and more recent disasters like Hurricanes Ian and Fiona and Maui’s wildfires.

By the end of August, during the annual summer recess, the fund will be $2.7 billion in the red, the most recent FEMA report says. By the end of the fiscal year Sept. 30, the shortfall is projected to grow to $6.8 billion.

“We remain committed to working with Congress to make sure that communities which have experienced devastating disasters can access the federal resources necessary to respond and recover,” an Office of Management and Budget spokesperson said.

‘A whole hell of a lot more money’

Last year, FEMA’s financial situation appeared similarly dire early on. Although the agency received a $5 billion emergency appropriation in December 2022, that was less than half the administration’s $11 billion request, leaving a hole without a clear plan to plug it.

As early as the spring of 2023, FEMA chief Deanne Criswell was telling lawmakers a $12 billion supplemental would be needed to get through the summer. But that request didn’t materialize until August, while lawmakers were on recess.

After somehow finding enough money to scrape by through August with $3.3 billion left, FEMA invoked “immediate needs funding” authorities, or a pause on all obligations unrelated to immediate “lifesaving and life-sustaining activities” associated with most recent disasters, like the Maui wildfires.

“We’re going to need a whole hell of a lot more money,” President Joe Biden said in an Aug. 31 speech on the Maui wildfires and Hurricane Idalia, which struck Florida a day earlier.

His administration earlier that month had finally asked Congress for $12 billion in supplemental FEMA appropriations, eventually upping that to $16 billion — which lawmakers attached to the first stopgap funding bill enacted in late September.

At the same time, the agency received its full, annualized appropriation for disaster relief in the prior fiscal year up front in the continuing resolution — just under $20 billion in advance funding it could tap.

But that annual “spend-faster” anomaly lawmakers enact in CRs comes with an understanding that in the final DHS spending bill, FEMA will only receive the difference between the prior year’s figure and what’s been set aside for the new fiscal year.

Under the typical spending cap adjustment for FEMA that lawmakers allow, the fiscal 2024 set-aside for the disaster relief fund in each chamber’s Homeland Security appropriations bill is nearly $20.3 billion, based on a White House estimate submitted alongside its budget last March. 

That means just $316 million in new money would become available in the final fiscal 2024 bill — a fraction of what FEMA is spending each month on disaster needs — unless lawmakers pony up a big chunk of off-budget funds.

[Tall order for lawmakers to finish spending bills next week]

Unlike with the predicted shortfall early last year, the White House got proactive after the summer scramble and submitted an emergency request right after the new fiscal year began in October. Weeks after the stopgap law was enacted, Biden requested an additional $9 billion to backfill another anticipated disaster funding gap that administration officials knew would be staring at them.

Lawmakers haven’t acted on that new request, part of a combined $23.5 billion disaster aid package that encompasses other agencies like the departments of Agriculture, Housing and Urban Development and various others. The full “domestic needs” supplemental request totaled nearly $56 billion, including $6 billion for low-income broadband subsidies needed to avoid exhausting that program’s funds in April.

But that package took a back seat to Biden’s much larger emergency aid request for Ukraine, Israel, Taiwan and more that the Senate finally passed a version of this month, which is sitting dormant in the House.

Meanwhile, FEMA has been burning through money at a rapid clip. Since the first CR last year provided close to $36 billion, the agency has been obligating disaster relief funds at a rate of about $3.6 billion per month. They expect to increase that rate to over $3.9 billion for the rest of the fiscal year — assuming no more major unanticipated disasters.

‘We can’t just print it’

Obviously no one at the administration or on Capitol Hill can control the weather.

But the situation raises the question of how much appetite lawmakers have for padding agency budgets — particularly at DHS, which has other outstanding shortfalls that were supposed to be alleviated through a border security supplemental. Senators dropped a $20 billion border package from their foreign aid supplemental before passage, and it stands little chance of moving in the House at this point.

Texas Rep. Henry Cuellar, the ranking Democrat on the House Homeland Security Appropriations Subcommittee, said negotiators are struggling to meet several priorities, including disaster aid as well as pay raises for Immigration and Customs Enforcement and Transportation Security Administration staff.

“We were expecting extra money in the supplemental. … It didn’t happen,” Cuellar said. “It would make our lives a lot easier. But we’re working it…We’re going to make it work one way or the other.”

Cuellar’s GOP counterpart, Homeland Security Appropriations Chairman David Joyce of Ohio, said the problem isn’t going away, even as Biden is preparing to kick-start the fiscal 2025 budget process next month.

“Somewhere we’re going to have to deal with it,” he said.

Rep. John Rutherford, R-Fla., a Homeland Security subcommittee member, said he supports a FEMA supplemental due to hurricanes and flooding in his state. “We’re hurt,” he said. “There’s a lot of people that are suffering.”

But Rutherford said he wanted the additional aid offset with cuts to other programs, such as clawing back untapped funding allocated for the COVID-19 pandemic.

“We’ve got to get the money from somewhere. We can’t just print it,” he said. “We’ve got to stop that.”

Peter Cohn contributed to this report, which first appeared on CQ.com.

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