October 10, 2024
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FEMA used up nearly half of its disaster budget in just eight days
Without additional funding, FEMA could be forced to limit spending and halt reconstruction projects
A crane sits on the street after hitting a building housing the Tampa Bay Times offices after Hurricane Milton arrived in St. Petersburg, Florida, on October 10, 2024.
Spencer Pratt/Getty Images
Climate wire | Eight days into the fiscal year, the federal government has spent nearly half of the disaster relief money allocated by Congress for the next 12 months.
Spending is likely to accelerate as aid flows in to states devastated by Hurricanes Helen and Milton, and the Federal Emergency Management Agency will soon have to cut back on spending unless Congress approves additional funding. restrictions will be forced.
“We need to assess how quickly we are depleting the remaining funds in the Disaster Relief Fund,” FEMA Administrator DeAnne Criswell said at a press conference Wednesday. That was hours before Milton began tearing through Florida’s Gulf Coast, causing flooding and tornadoes. and power outages across the state.
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Under the spending limits, FEMA would cut funding to disaster-related reconstruction projects across the country, reserving funds for lifesaving efforts during disasters. Road closures often disrupt major repairs to roads, sewers, and water treatment plants.
“We keep reserves in our disaster relief fund so that we can always pay for these lifesaving operations,” Criswell said.
Before Mr Herren and Mr Milton, Mr Criswell had predicted that restrictions would be imposed in December or January.
“We have to evaluate every day whether we can wait that long,” Criswell said.
As of Tuesday, Criswell said, of the $20 billion that Congress set aside for FEMA’s disaster fund on Oct. 1, FEMA has disbursed $9 billion in the fiscal year ending Sept. 30, 2025. revealed. This is the first time FEMA has publicly revealed the amount. It’s money the company has been holding since Hurricane Helen hit the Southeast two weeks ago.
President Joe Biden has called for additional funding for FEMA since last October, but Congress has ignored his requests.
On Wednesday, the House Democratic Caucus called on Speaker Mike Johnson (R-Louisiana) to “immediately reconvene” the chamber “so we can pass strong disaster relief spending.”
Democrats, led by Ohio Rep. Marcy Capture, say the money is needed for both FEMA and the Small Business Administration program, which provides low-interest loans to homeowners, renters and businesses whose property has been damaged in disasters. said.
But Johnson said he had no intention of reconvening the House of Commons before the election to discuss disaster funding.
SBA disaster loans have become an important part of the federal government’s efforts to help people rebuild after hurricanes, floods, wildfires, and other disasters.
SBA Administrator Isabel Casillas Guzman said the funds to operate the program will be exhausted “by the end of October.” If agency funding lapses, we will continue to accept applications, but applications will not be processed until the program’s funding is replenished.
Once SBA loans run out, those who could qualify for loans will be forced to apply for up to $42,000 in FEMA emergency assistance, accelerating the outflow of FEMA disaster funds.
The SBA is offering homeowners loans of up to $500,000 at a 2.8% interest rate to repair or replace disaster-damaged homes and property. The agency provided $45 billion in loans from 2001 to 2022, according to an E&E News analysis of records.
FEMA often struggles to pay disaster costs and has imposed spending limits 10 times since 2003, most recently in early August.
“It makes a huge difference to the fiscal health and resiliency of the entire region,” said Chad Burginis, executive director of the State Floodplain Managers Association. “These long-term repairs are almost complete.”
FEMA typically pays 75% of rebuilding costs and leaves the remaining 25% to states.
Spending limits are often imposed in August because disaster funds run out near the end of the fiscal year and expenses increase during peak hurricane season.
If FEMA begins restricting spending in December or sooner, as Criswell predicts, it would be the earliest time in a year that FEMA has ever taken such action. The measures could halt reconstruction projects for months.
FEMA recently imposed restrictions called “Emergency Needs Funding” in early August, temporarily suspending $9 billion it was supposed to give states for rebuilding projects.
One reason FEMA has spent so much money this year is because Congress lifted spending limits on October 1, when it refilled the disaster fund.
Criswell declined to say Wednesday that FEMA may need to stop conducting lifesaving operations such as search and rescue operations. In September 2023, when FEMA faced a budget shortfall, she told Congress that FEMA’s remaining disaster funds “will not be sufficient to cover all ongoing lifesaving operations.”
FEMA is “capable of supporting all the needs of everyone affected by Helen and Milton,” Criswell said.
Reporter Andres Picon contributed.
Reprinted from E&E News Published with permission of POLITICO, LLC. Copyright 2024. E&E News provides news that matters to energy and environment professionals.
