Four weeks into the U.S. government shutdown, the nation’s top disaster relief fund is on the brink of running dry, according to sources and an internal report obtained by Bloomberg.
The Disaster Relief Fund — the lifeline that supports federal aid for disaster survivors and sends emergency teams into crisis zones — is running dangerously low, current and former FEMA officials warn. The shortfall could cripple vital government relief efforts right in the middle of hurricane season.
Last October, FEMA officials sounded the alarm as the Disaster Relief Fund dropped to just $11 billion. At the time, the agency was already stretched thin, scrambling to respond to Hurricanes Helene and Milton — two powerful storms that slammed into the U.S. only days apart.
Today, the fund’s balance has plunged to more than a billion dollars below that mark.
A recent report on the Disaster Relief Fund showed that by the end of September, FEMA had about $8.4 billion left for staff deployments, survivor aid, and other major disaster operations — plus just $1.1 billion set aside for unexpected crises like earthquakes.
The agency is carefully rationing what’s left, trying to make sure there’s enough in reserve if another disaster strikes. But according to one official, FEMA may soon have no choice but to focus on immediate emergency response and delay long-term recovery projects.
If the funding runs out completely, the consequences could be devastating — FEMA’s help lines could go silent, and staffing shortages might leave disaster survivors unable to even register for assistance.
“All recovery operations will be on hold,” warned Michael Coen, who served as FEMA chief of staff under President Biden and co-signed an August letter criticizing the Trump administration’s cuts to federal disaster programs.
There’s little sign that the shutdown will end anytime soon, with both sides deadlocked over expiring health-care subsidies. Already the second-longest in U.S. history, the funding lapse could stretch into November. President Trump is scheduled to travel to Asia later this week, with no talks planned before his departure.
While a House-approved stopgap spending bill could restore funding to the agency, Senate Democrats are holding firm, demanding health-care provisions to prevent Obamacare premiums from skyrocketing in the new year.
Civilian federal employees are expected to miss their first full paycheck on Friday.
The Disaster Relief Fund is shrinking just as the government’s National Flood Insurance Program authorization expired on September 30 and remains unrenewed by Congress. Without reauthorization, the program cannot issue new policies or renew existing ones. The National Association of Realtors estimates that this lapse could affect more than 1,300 property sales each day.
Early in his presidency, Trump suggested the possibility of eliminating FEMA altogether. He later set up a review council to make recommendations on the agency’s future before year’s end. Yet that hasn’t stopped the administration from moving ahead with cuts to grants, staffing, and programs.
About 2,400 people walked out of the agency in the first six months of the year, including numerous long-time senior staff, driven out by firings, resignations, and early exit deals, a government watchdog report reveals.
