Trump pushes to ax FEMA, sparks disaster aid showdown with states

By Jeff Mordock THE WASHINGTON TIMES

President Trump’s plan to shutter the Federal Emergency Management Agency could save the federal government billions of dollars but will hit stiff resistance from governors who don’t want their states to shoulder more of the costs of natural disasters.

On Friday, the president floated the idea of abolishing FEMA while visiting Asheville, North Carolina, which is still suffering from the devastation wrought by Hurricane Helene in September.

He told the crowd in North Carolina that FEMA botched the response and the state would have done a much better job.

“When you have a problem like this, I think you want to go — whether it’s a Democratic or Republican governor — you want to use your state to fix it,” Mr. Trump said in Asheville. “I think we are going to recommend that FEMA go away and we pay directly — we pay a percentage to the state. The state should fix it.”

Mr. Trump later visited Los Angeles and toured the destruction caused by raging wildfires, which are not fully contained.

Before leaving office, President Biden promised that the federal government would cover losses from the raging Southern California wildfires, estimated at up to $35 billion.

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FEMA is also providing relief there.

Mr. Trump has no authority to eliminate FEMA, which can be shuttered only through an act of Congress. Lawmakers in both parties support FEMA and fear their respective states will one day need to tap its coffers.

The agency is popular. Under pressure from states, presidents have started declaring more major disasters that qualify for federal bailouts.

Mr. Trump’s plan would save the federal government billions of dollars. The insured property losses from the two largest Los Angeles area wildfires, the Palisades and Eaton fires, are estimated to be $28 billion to $35 billion.

President Biden vowed before leaving office that the federal government would cover all costs of responding to the wildfires. It could be the costliest natural disaster in U.S. history.

Last year, Mr. Biden signed an appropriations bill to replenish the federal disaster aid by $100 billion.

California approved a package last week to allocate $2.5 billion to help rebuild Los Angeles.

“FEMA creates a disincentive for states to prepare for their own disasters. The more the federal government doles out, the less the states are forced to be adults and plan for their own disasters,” said Chris Edwards, a tax and budget expert at the libertarian Cato Institute. “We can’t afford this money.”

In recent years, FEMA has increasingly made “supplemental” funding requests to Congress to cover disaster recovery costs. A 2022 Congressional Budget Office report found that most of FEMA’s spending on disaster relief comes from these supplemental requests.

The money allocated depends on the disaster, but the 2022 report noted that a small number of the disasters account for a disproportionate share of total spending.

Meanwhile, states’ rainy day fund balances — surplus revenue set aside to pay for unexpected costs such as natural disasters — reached an average record high at the end of the fiscal year 2023, according to the most recently available data from the National Association of State Budget Officers.

Rainy day funds hit all-time highs in 38 states, and 19 reached a record number of days when they could fund government operations using the rainy day funds alone. Even California, plagued with natural disasters and government mismanagement, had $76 billion in its rainy day fund at the end of fiscal year 2023.

Governors have remained tightfisted with those accounts and prefer to get money from the federal government.

Arizona faced a budget shortfall last year, but neither Democratic Gov. Katie Hobbs nor the Republican-controlled Legislature wanted to tap those funds to fix the deficit. The Maryland General Assembly authorized using the rainy day fund to repair the collapsed Francis Scott Key Bridge, but Gov. Wes Moore declined to use all available funds. Instead, he tried to balance the budget with cuts and tax increases.

Mr. Edwards said the large amount of disaster relief available to the states created a political dynamic in which, even after more minor disasters, governors, state legislatures and state congressional delegations pressure the White House to declare “major disasters” to unlock federal funds for the states.

As a result, the number of disaster declarations has increased dramatically over the past few decades. In the 1980s, the federal government declared an annual average of 74 disasters. By the 2010s, that number doubled to an average of 150, according to FEMA’s database.

Last year alone, FEMA declared 100 disasters.

Mr. Edwards’ research shows that severe disaster declarations were highest when the presidents were up for reelection.

The Obama administration floated the idea of reducing federal aid to states that fail to take steps to protect communities against disasters. A disaster “deductible” would shift some of the financial burden to states, forcing them to take more proactive roles in disaster preparedness.

Craig Fugate, President Obama’s FEMA administrator, argued at the time that agency funds should be used to pressure states to impose stricter building codes, reduce construction in high-risk areas and take other steps to reduce damage caused by hurricanes, wildfires and other disasters.

In 2016, Mr. Fugate told Bloomberg News that the administration was not seeing “a change in behavior” by the states and insisted that the federal government needed “a forcing mechanism.”

States resisted the idea of bearing high costs, and the idea went nowhere.

Mr. Trump tried to revive the idea when he took office in 2017. His FEMA administrator, Brock Long, proposed allocating the amount of federal disaster aid a state could receive based on its efforts to reduce exposure from such events. Again, the idea went nowhere amid opposition from governors.

Project 2025, a conservative blueprint for Mr. Trump’s second term prepared by his allies at The Heritage Foundation, suggested capping the federal reimbursement rate for more minor disasters at 25% of the cost and 75% for more severe disasters. Mr. Trump has not endorsed that idea.

Calls to abolish FEMA date back decades. In 2006, a bipartisan Senate committee tasked with studying the federal government’s response to Hurricane Katrina demanded that the agency be eliminated.

The panel proposed a new agency called the National Preparedness and Response Authority to plan and carry out targeted relief missions for domestic disasters. Most lawmakers on Capitol Hill argued that it was just bureaucratic reshuffling, and the idea went nowhere.