Federal Disaster Funding at Play in Fiscal Year 2024 and Government Shutdown Negotiations

Government Shutdown
September 25, 2023

The Disaster Relief Fund (DRF) is running dangerously low as the busiest time of the disaster season arrives and as lawmakers debate spending levels for the coming year. Members of Congress are negotiating a budget deal to fund the federal government for FY 2024, as well as a Continuing Resolution (CR) as a stopgap measure for the month of October to avoid a government shutdown. Due to elevated spending on recent disasters, for the past month FEMA has had to implement what’s called Immediate Needs Funding (INF) – a type of restriction on the use of DRF money, used when funds are running low, to only “lifesaving and life-sustaining activities” such as response and urgent recovery activities. INF has been implemented eight times in the past 20 years – most recently in 2017 for about a month in the wake of Hurricane Harvey and before the passage of the FY 2018 CR. The DRF is the source for myriad programs under the Federal Emergency Management Agency (FEMA) that provide disaster assistance to impacted communities. These include assistance provided under a disaster declaration – such as Individual Assistance, Public Assistance, and Hazard Mitigation Grant Program – as well as Fire Management Assistance Grants and disaster readiness and support activities. Even with INF implemented, FEMA Administrator Deanne Criswell relayed to House members last week that what is left  “would be insufficient to cover all of our ongoing life-saving operations.”

FEMA has provided additional guidance in an FAQ on these impacts. This includes:

Under INF, FEMA will continue to fund:

  • Individual Assistance payments directly to survivors for critical needs and housing
  • Public Assistance for states, tribes and territories essential for lifesaving and life-sustaining activities
  • State management costs
  • Mission assignments of Federal partners for critical response activities
  • Fire Management Assistance grants 
  • Essential ongoing disaster operations, including salaries of FEMA field staff (Stafford Act employees)

Under INF, FEMA will delay:

  • New Public Assistance and Hazard Mitigation obligations that are not essential for lifesaving and life-sustaining activities. 
    • FEMA will continue to process all applications for these grants
    • FEMA will resume making obligations in categories that were paused as soon as DRF funding is replenished 
  • The FY 2023 BRIC Notice of Funding Opportunity release, as well as new BRIC obligations from any year.
  • FEMA will notify affected grant recipients and communicate how their specific projects may be affected.

In anticipation of insufficient DRF funds, FEMA has recovered over $6 billion since the beginning of the year in excess funds across contracts, grants, and mission assignments that were previously obligated. FEMA estimates that the restriction of obligations for major disasters effective as of September 29 will delay $8 billion that would have gone to those recipients. According to the Congressional Research Service, this includes:

  • $4.5 billion related to COVID-19 pandemic response
  • $2.5 billion related to Hurricane Maria
  • $272 million related to Hurricane Ida
  • $265 million related to Hurricane Ian
  • $104 million related to Hurricane Laura

Congress continues to deliberate a possible CR, so the details of that option are being finalized. However, in the past several months the White House submitted its budget request and the House and Senate appropriations committees both produced FY 2024 bills for Homeland Security. On September 1, the White House requested $16 billion in emergency funding (up from an original request of $12 billion) to replenish the DRF now, an additional $20 billion for FY 2024. Both the House and Senate’s FY 2024 spending bills also included just over $20 billion for the DRF. Congress could provide a full year funding allocation to the DRF either via a Continuing Resolution or via the FY 2024 annual appropriations package, but they only have until October 1 to do so before the government shuts down.