Each year, Congress appropriates billions of dollars in discretionary funding for disaster relief and emergencies. Some of that funding is provided through base appropriations measures, but a much larger portion is provided through annual Budget Control Act (BCA) cap adjustments that increase discretionary spending by billions of dollars, or—for larger expenses—by supplemental appropriations bills that provide even greater amounts of funding that is not subject to spending caps or budgetary controls. The following paper outlines the three classifications of disaster and emergency spending and discusses the importance of paying for these events within the normal annual appropriations except in the cases of true emergencies.
As authorized under the Robert T. Stafford Emergency Relief and Disaster Assistance Act, the President has the authority to issue disaster declarations for events ranging from large-scale disaster to smaller localized events. The majority of disaster declarations are funded through the Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund (DRF). The DRF receives funding through the regular annual appropriations process, with a major distinction being that these funds are “no-year” money, meaning they do not expire and balances can be carried over. Base funding for this account is used for what are called “normal,” non-catastrophic disasters that cost no more than $500 million per occurrence. In fiscal year (FY) 2016, the DRF received a total of $661 million in base funding in addition to its carryover balance.
Allocation of DRF funds can be distributed from one or a combination of three categories of disaster aid: individual assistance, public assistance, and hazard mitigation. FEMA officials on the ground determine who receives disaster assistance and the amount that they receive. FEMA and/or the President may also issue a disaster declaration for the Fire Management Assistance Grant program and make funds available for that purpose.
Disaster Designated Appropriations
Since the passage of the Stafford Act in 1988, the number of declared disasters each year has been steadily increasing. Under President Ronald Reagan, the average number of disasters declared by FEMA each year was 28. Under the past two Administrations that number has soared to an average of 130 disaster declarations each year. Because the number of declarations has risen so sharply, the DRF has increasingly become depleted of funds before the end of a given year. When this happens, Congress has authority to allocate additional funds outside of the base for disaster relief if it chooses to do so.
The 2011 BCA placed caps on discretionary spending levels for FY 2012–2021, but created certain annual adjustments, one of them being disaster relief. Under the terms of the BCA, Congress can provide a disaster relief cap adjustment not subject to the discretionary spending limits for a given year for purposes that would be carried out pursuant to a disaster determination under the Stafford Act. The amount that the cap can be adjusted each year is determined by the average funding level provided for disaster relief for the previous 10 years, not including the high and low year totals. The Office of Management and Budget calculates this average annually and sets the maximum level of the adjustment. For FY 2016, the Department of Homeland Security received a $6.7 billion cap adjustment to be used for additional disaster spending. Disaster relief adjustments are provided to the DRF on annual appropriations bills rather than a separate supplemental funding bill.
Over the past five years, the annual cap adjustment has averaged over $8.3 billion annually. It has turned into another gimmick for Congress to repeatedly circumvent the BCA spending caps. Congress should stop providing disaster cap adjustments immediately, and instead provide ample base funding within the BCA limits to cover the disasters the U.S. faces.
Emergency Supplemental Appropriations
The DRF is used to provide funding for “normal” non-catastrophic disasters and emergencies. For events that breach that threshold, Congress has generally relied upon supplemental appropriations bills. Supplemental bills provide budget authority in addition to what has already been provided in regular or continuing appropriations legislation for the current year. These types of appropriations are supposed to cover emergencies, disaster relief, or other needs that are determined to be too urgent to be postponed until the next enactment of regular appropriations. Supplemental bills do not have to be used for purposes that normally fall under the authority of the DRF or FEMA. Recently, supplemental bills have been used to provide funding for purposes such as border security in the southwestern U.S., the recovery following Hurricane Sandy, and response to the 2014 Ebola crisis.
Emergency supplemental appropriations are not subject to the pay-as-you-go and spending cap requirements originally prescribed by the Budgetary Enforcement Act of 1990 and now under the authority of the Statutory Pay-As-You-Go Act of 2010. These bills can be initiated by either Congress or the President and there is virtually no limit on the amount of additional spending that may be passed other than a Member being able to raise an easily waived point of order against it.
Congress Should Budget for Disaster Relief
There is no doubt that there are situations where true emergencies take place and additional funding is required. The problem is that there is little to no control over the process and as often happens with any “deal” in Congress, it becomes bloated with additional wasteful spending to gain support. For instance, the Hurricane Sandy supplemental bill provided more than $50 billion for storm response and recovery. The bill had no offsets and provided so-called emergency funding for locations as far away as Louisiana and Texas, money for improved weather forecasting, grants for clean water and pollution control, and aircraft upgrades at various agencies. While these programs may or may not be worthy of funding on their own, it is clearly a stretch to consider them an emergency. To stop drawing down the DRF and the subsequent overbroad use of pork-laden supplemental bills, Congress should establish higher thresholds for disasters meriting FEMA funds, allowing FEMA to build a larger DRF reserve and be better prepared for major and catastrophic disasters. Congress should stop using these bills as an opportunity to increase wasteful spending and use them only in cases of true emergencies.
—Justin Bogie is Senior Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation.