October 10, 2024
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FEMA spent almost half of the disaster budget in 8 days
Without more funding, FEMA may be forced to limit spending and suspend rebuilding projects
A crane sits in the street after it crashed into the Tampa Bay Times office building after the arrival of Hurricane Milton on October 10, 2024 in St. Petersburg, Florida.
Spencer Platt/Getty Images
KLIMAWIRE | Eight days into the fiscal year, the federal government has spent nearly half of the disaster relief that Congress has allocated for the next 12 months.
Rapid spending — likely to accelerate as aid flows to states pulverized by Hurricanes Helene and Milton — will soon force the Federal Emergency Management Agency to cap spending unless Congress approves additional funding.
“I’m going to have to assess how quickly we burn through the remaining dollars in the Disaster Relief Fund,” FEMA Administrator Deanne Criswell said at a news conference Wednesday, hours before Milton began to make landfall on Florida’s Gulf Coast and produce flooding and tornadoes. and power outages across the state.
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Under the spending cuts, FEMA would cut funding for disaster-related reconstruction projects nationwide and save its money for life-saving disaster relief operations. The cuts often stop major repairs to roads, sewer plants and water treatment facilities.
“We maintain a reserve in the Disaster Relief Fund to ensure that I can always cover these life-saving activities,” Criswell said.
Ahead of Helene and Milton, Criswell expected restrictions to be implemented in December or January.
“I’ll have to evaluate it every day to see if I can wait that long,” Criswell said.
Criswell reported that as of Tuesday, FEMA had spent $9 billion as of Oct. 1 of the $20 billion that Congress put into FEMA’s disaster fund for the fiscal year through Sept. 30, 2025. It was the first time FEMA has publicly disclosed how much money it has since Hurricane Helene hit the Southeast two weeks ago.
President Joe Biden has sought additional funding from FEMA since last October, but Congress has ignored the request.
On Wednesday, a group House Democrats asked for it Speaker Mike Johnson (R-La.) called for the House to “immediately reconvene” to “pass robust disaster relief spending.”
Democrats, led by Rep. Marcy Kaptur of Ohio, said the money is needed for both FEMA and the Small Business Administration program, which provides low-interest loans to homeowners, renters and businesses affected by a disaster.
But Johnson has said that he doesn’t plan convening the House before the election to address disaster funding.
SBA disaster loans have become an essential part of the federal government’s efforts to help people rebuild after hurricanes, floods, fires and other disasters.
SBA Administrator Isabel Casillas Guzman he said the money to run the program will run out”before the end of October“. If the agency’s funding expires, it will continue to accept applications, but will not process them until program funding is renewed.
The absence of SBA loans will accelerate the drain on FEMA’s disaster funds, forcing people who could have gotten loans to pay up to $42,000 in FEMA emergency assistance.
The SBA provides loans of up to $500,000 to repair or replace disaster-damaged homes and property at an interest rate of 2.8 percent. The agency issued $45 billion in loans from 2001 to 2022, according to an E&E News review of records.
FEMA has often struggled to meet disaster costs and imposed spending cuts 10 times since 2003the last one at the beginning of August.
“It makes a significant difference in the financial health and resilience of the community,” said Chad Berginnis, executive director of the State Floodplain Managers Association. “These longer-term fixes are closing.”
FEMA typically pays 75 percent of reconstruction costs and leaves the remaining 25 percent to the states.
Spending cuts are often implemented in August, as disaster funds near the end of a fiscal year and costs rise during the peak of hurricane season.
If FEMA begins cutting spending in December or earlier, as Criswell predicted, it would be the first time of year FEMA has taken such action. The move could halt reconstruction projects for months.
FEMA imposed the cuts in early August, called “immediate needs funding,” temporarily halting $9 billion it had planned to give states for rebuilding projects.
Part of the reason FEMA has spent so much money this fiscal year is that spending cuts were lifted on Oct. 1, when Congress renewed the disaster fund.
Criswell stopped short of saying Wednesday that FEMA may have to stop conducting life-saving operations, such as search and rescue missions. In September 2023, faced with FEMA’s budget shortfall, he told Congress that FEMA’s remaining disaster funding “would not be enough to cover all the operations that are being done to save our lives.”
FEMA is able to “support all the needs of everyone affected by Helene and Milton,” Criswell said.
The journalist Andres Picon contributed.
Reprinted E&E News Courtesy of POLITICO, LLC. Copyright 2024. E&E News provides essential news for energy and environmental professionals.
