FEMA Disaster Money Flowing Again after Budget Standoff

The Federal Emergency Management Agency will resume funding long-term rebuilding projects after withholding funds since August

Federal Emergency Management Agency (FEMA) Administrator Deanne Criswell holds a press conference on Hurricane Ian at FEMA Headquarters on September 28, 2022 in Washington, DC. The agency ended its spending restrictions for disaster aid after lawmakers averted a government shutdown over the weekend. Credit: Kevin Dietsch/Getty Images

CLIMATEWIRE | The Federal Emergency Management Agency lifted temporary spending restrictions Monday that had held up $3 billion for states to rebuild from disasters that occurred in recent years.

FEMA said it would resume giving states money for rebuilding projects because it received $16 billion in the temporary spending bill that Congress and President Joe Biden signed Saturday.

The agency, facing a dwindling budget, had stopped funding long-term projects Aug. 29 to save money for emergency costs such as temporary shelters and road clearing immediately after a disaster.

The spending restrictions forced FEMA to withhold funding for 2,400 nonemergency projects that the agency had approved such as rebuilding damaged roads and structures. It was the first time FEMA had imposed “immediate needs funding” restrictions since 2017.

FEMA said it expects to fund all delayed projects “within the next several weeks.”

The $16 billion for FEMA’s Disaster Relief Fund was included in a temporary spending package Congress approved one day before the end of fiscal 2023 when most federal employees were to stop working due to a lack of funding.

Biden had asked Congress in August to give FEMA $16 billion through a special allocation to enable the agency to continue operating in full.

FEMA’s disaster fund had dwindled to about $2 billion, which can be spent quickly if a wildfire, storm or flood causes significant damage.

The agency’s decision to withhold funds did not automatically block newly approved rebuilding projects. But withholding funds forced states and localities to pay for projects themselves and wait for FEMA reimbursement or to delay the start of the projects.

FEMA typically pays 75 percent of projects that rebuild public facilities after a major disaster.