Counting on FEMA is a Second Disaster

As hurricane season devastates communities across the United States, the debate over the Federal Emergency Management Agency’s (FEMA) role in disaster relief continues to intensify. With massive spending on recent disasters like Hurricanes Helene and Milton, and FEMA’s recent admission that it needs additional funds to meet its obligations, it’s time to ask an important question: Should the federal government play such a dominant role in disaster management?

The answer, increasingly, is no.

Instead, state and local governments and private charities are better suited to respond to disasters. Relying on FEMA has only deepened dependence on federal intervention while exacerbating the ongoing spending crisis in Washington.

Decentralizing disaster relief efforts would reduce wasteful spending and lead to more efficient and timely responses for those affected.

The Evolution of FEMA and Federal Disaster Relief
FEMA was created in 1979 to coordinate federal response efforts during large-scale disasters. The agency’s role has expanded dramatically since then, particularly in the aftermath of Hurricane Katrina and the 9/11 attacks. What was once an agency designed to assist states in managing truly overwhelming events has now morphed into a crutch for state and local governments, responding even to smaller-scale disasters.

This shift has led to a growing reliance on federal dollars and resources, leaving states less prepared and incentivized to manage their disaster response efforts. Even worse, it has encouraged states not to prioritize their infrastructure and preparedness, confident that federal assistance will arrive in times of need.

Recent data show just how extensive FEMA’s role has become. According to FEMA’s September 2024 report, the agency has been stretched thin as nearly $15 billion has been spent on COVID-19 relief efforts over the past year–several years after the emergency declaration was over–and the costs associated with the response to Hurricanes Helene and Milton​. The amount FEMA spent from the Disaster Relief Fund just on COVID-19 relief efforts is nearly 40 percent of the total of $38.2 billion spent over the last year. Moreover, these mounting obligations have left FEMA reportedly underfunded and understaffed, with less than 10 percent of its frontline workers available for deployment at a time when disaster strikes.

Unsurprisingly, Secretary Mayorkas is now imploring Congress for more money to sustain FEMA’s operations, even though FEMA notes on their website: “FEMA has enough money right now for immediate response and recovery needs. If you were affected by Helene, do not hesitate to apply for disaster assistance as there is a variety of help available for different needs.“

A Federal Spending Crisis
Beyond FEMA’s immediate challenges, the larger issue is Washington’s spending crisis. The federal government’s insatiable appetite for spending has left it with a national debt exceeding $35 trillion, with no meaningful plan for fiscal restraint. FEMA’s dependence on supplemental appropriations from Congress year after year only worsens the problem.

This is not just an economic concern but a moral one.

When the federal government continues to spend without constraint, it undermines the long-term prosperity of future generations. Congress’s failure to pass sustainable budgets, much less spending bills meaningfully limiting expenditures, is a key driver of our nation’s debt crisis. FEMA’s bloated role in disaster response contributes to this problem, diverting funds that could be better spent — or not spent at all.

To continue throwing federal money at FEMA without reforming how disaster relief is handled is fiscally irresponsible and abdicates our duty to find better, more responsible solutions.

State, Local Governments, and Private Charity: A Better Approach
Shifting more responsibility for disaster relief to state and local governments would be a step toward solving this problem. State governments are far better positioned to understand the needs of their communities and respond quickly when disaster strikes. They can also implement policies that reflect local conditions and tailor their relief efforts accordingly.

Moreover, reducing federal involvement would incentivize states to take disaster preparedness more seriously. By decentralizing disaster relief, we could encourage states to prioritize resilient infrastructure, mutual aid agreements with neighboring regions, and disaster planning that reduces the long-term need for federal assistance.

Private charity also plays a vital role in disaster relief, often stepping in where government response falls short. Organizations like the Red Cross, Salvation Army, and faith-based groups have a long history of providing immediate assistance in the wake of disasters, often with far greater efficiency than FEMA’s bureaucratic process allows. Expanding the role of private charity in disaster response could reduce the burden on taxpayers while ensuring that aid is delivered where it’s needed most.

Restoring Federalism and Free-Market Principles
One of the underlying principles of our federal system is that states should have the primary responsibility for managing their affairs, including disaster response. Allowing states to take the lead would restore the balance of power between state and federal governments, ensuring that decisions about disaster relief are made closer to those affected.

This decentralization aligns with free-market principles. Rather than relying on a top-down federal approach prone to inefficiencies, we should embrace solutions that empower states, local governments, and private actors to solve problems directly. Not only would this lead to more effective disaster relief, but it would also promote competition and innovation in disaster preparedness and response.

Conclusion: Time for a New Approach
The role of FEMA in disaster relief has expanded far beyond what it was intended to be, contributing to inefficiencies, federal spending problems, and a lack of preparedness at the state level. It’s time to reverse course. By scaling back FEMA’s role and empowering state and local governments and private charities to take the lead, we can create a more efficient, responsive system better equipped to handle the challenges ahead.

By decentralizing disaster relief, we can build a system that is more effective and more in line with the principles of federalism and limited government — principles that have been proven to lead to greater prosperity for all.

This piece originally was published by the American Institute for Economic Research.