The Federal Emergency Management Agency’s response and recovery success is reliant on one financial account — the disaster relief fund. Congress funds the disaster relief fund based on historical needs as well as the full funding needed for catastrophic recovery. In the past, when unplanned disaster needs arise, Congress has passed supplemental appropriations similar to the recent COVID-19 supplementals.
The continuing COVID needs across the country, the many open past disasters and pending recovery work and ongoing disasters (e.g., fires, floods, severe weather) are depleting the disaster relief fund at this critical time. The White House also tasked FEMA to lead vaccine distribution, working with states to set up vaccination centers across the country using disaster relief funds. And to add more concern, the 2021 hurricane season is only four months away and we are not even halfway through fiscal year 2021, which ends on Sept. 30.
According to FEMA’s latest disaster relief fund report, as of the end of January, the agency had an available balance of $18 billion and estimated that the disaster relief fund would be short $24 billion for the needed fiscal year 2021 requirements on Sept. 30. In fact, the disaster relief fund is projected to run out of funds in April if no additional funds are appropriated by Congress.
What does this mean for communities still recovering from a disaster or waiting for COVID support or cost reimbursement for their COVID-19 vaccination and mitigation measures? It means resource and financial delays and a hope that no new disasters strike!
Without the replacement of disaster relief funds prior to April, state, local, tribal and territorial partners could see:
- The discontinuation of FEMA-supported vaccine efforts, impacting every state, territory, tribe and community: Through January 2021, FEMA spent $9.7 billion on COVID-19, and expects to spend $35.4 billion more this fiscal year.
- No funds for future disasters, response, recovery, mitigation actions and grants (including paying FEMA disaster-funded staff): Through January 2021, FEMA spent nearly $1.5 billion for major disasters and emergencies and expects to spend $800+ million more this fiscal year. (For comparison, FEMA spent nearly $3.5 billion in the disaster relief fund from February 2020 through September 2020.)
- No funds to continue work on recovery and mitigation for prior disasters, including Hurricanes Laura, Michael and Maria, the California wildfires and many other events: For the rest of fiscal year 2021 (February through September 2021), FEMA expects to spend $7.5 billion for disaster recovery.
With this daunting and crushing financial situation, what can, must FEMA do?
Without additional disaster relief funds, FEMA must first implement immediate needs funding to identify and prioritize the most essential disaster relief fund costs (with notification to Congress). Based on the current operational situation, this would likely mean continued, although reduced COVID-19 funding to ensure a minimum level of funds to meet critical disaster response needs.
Second, FEMA should evaluate all existing disaster relief fund obligations to identify options to reduce or cancel services, so as to recover funds for higher priority needs. Meaning, actions previously approved and funded by FEMA in states, territories, tribal lands and communities could be discontinued until the financial crisis is resolved.
Third, FEMA should accelerate the recovery of funds from the close-out of older disaster grants (as included in the monthly disaster relief fund report) and identify additional recoveries within the billions upon billions of open disaster grants. Simply stated, if disaster relief funds previously allocated are not going to be used, reclaim them now.
Finally, FEMA should immediately work through the Department of Homeland Security and the White House to identify COVID-19 and other related funds from other federal agencies for possible transfer to the disaster relief fund to cover the estimated costs. For example, FEMA spent nearly $45 billion in fiscal year 2020 making “loss wages” payments that should now be reimbursed to FEMA from the Department of Labor’s Unemployment Trust Fund.
FEMA’s disaster resources are critical to the recovery of impacted communities and survivors throughout the United States. This is not the time for any delay in replenishing the disaster relief fund. Congress and the White House should ensure that FEMA can achieve its statutory responsibilities on behalf of all states, localities, tribes and territories.
Now is the time for the executive and legislative branches to work together and act for the benefit of the whole community.
Edward Johnson, former FEMA chief financial officer (2012-2016), is a senior advisor for Homeland Security and Emergency Management at IEM and Elizabeth Zimmerman, former FEMA associate administrator for Response and Recovery (2009-2017) is a senior executive advisor at IEM.