The federal government could be nearing a collapse in its ability to respond to major disasters as the second catastrophic hurricane in less than two weeks hits Florida.
Hurricane Milton, a Category 5 storm whose winds reached 185 mph late Monday, is swirling toward a possible landfall in Tampa Bay just as major federal disaster programs face financial instability amid a series of recent calamities, including the flooding of communities by Hurricane Helene around the world. Southeast.
These include the Federal Emergency Management Agency’s disaster fund, which pays for repair and reconstruction efforts; the Small Business Administration’s loans to affected businesses and homeowners; and FEMA’s flood insurance program. All of this could happen within weeks after the money runs out, based on recent comments from President Joe Biden, Homeland Security Secretary Alejandro Mayorkas and insurance analysts — even as FEMA tried to assure the public Monday that it has enough money to meet its “ life-saving needs”. responsibilities for Helene and Milton.
Concerns about federal resources are growing as lawmakers from both parties call on Congress to return to Washington before the November elections to approve additional disaster funding. Budget conservatives in the House of Representatives have protested against that, and Speaker Mike Johnson said this weekend that he had no plans to bring back his members.
Washington’s ability to pay for recovery from back-to-back disasters is “a major concern,” said Elizabeth Zimmerman, who headed FEMA’s disaster management agency under the Obama administration. She added: “It could be very devastating for the financial aspects of the country. what the federal government has.”
The two hurricanes raise concerns about whether “FEMA and the federal government have the resources to respond to any disaster that arises and provide life-sustaining support,” said Zimmerman, senior executive advisor at IEM Disaster Consultants.
Mayorkas has said that FEMA’s disaster fund could run out of money next month, leaving it unable to pay for the reconstruction of public buildings, roads and facilities such as water treatment plants, all of which are essential to the recovery of the normality. The agency’s flood insurance program, which has nearly two million policies in the areas affected by Helene or threatened by Milton, could also run out of money to pay claims and be forced to borrow from federal taxpayers, according to credit rating agency AM Best .
And the Small Business Administration “will run out of funding in a few weeks” to provide homeowners and businesses with low-interest disaster loans for repairs and rebuilding, Biden warned in a letter to Congress on Friday.
Even a small Federal Highway Administration disaster program is facing a budget shortfall that could limit its ability to rebuild federal roads damaged by Helene or Milton.
The SBA’s disaster loan program provided $45 billion in disaster loans — mostly to homeowners — between 2001 and 2022. If the SBA were unable to make the loans after Helene and Milton, it would be a huge setback to the recovery and further deplete FEMA. disaster relief fund by encouraging households to raise money from FEMA’s emergency assistance.
Biden increased the pressure on FEMA when he agreed in recent days to pay the full cost of debris removal and emergency response after Helene instead of the usual 75 percent of the cost. Normally, states would have paid the remaining 25 percent.
FEMA also faces immediate concerns about saving lives in hurricane-affected areas. The agency’s Daily Operations Briefing, released Monday morning, shows that the Urban Search and Rescue operations are “not mission capable” and have only four teams available.
More than 200 counties with a population of 31 million in six states have been declared federal disasters or emergencies because of Helene of Milton. Helene killed at least 230 people after it flooded much of Florida’s Gulf Coast, crashing ashore in the state’s Big Bend region and leaving a trail of flooding and destruction in states including Georgia, North Carolina and Tennessee.
Milton poses a potentially even more dire scenario, as it threatens to launch a direct attack on Tampa Bay, one of the nation’s most vulnerable communities to storm surges. The region of more than three million people has not had a major hurricane strike since 1921, and regional planners have warned that such a disaster could cause hundreds of billions of dollars in losses.
“This is not a good situation,” National Weather Service Director Ken Graham said of the potential devastation Hurricane Milton will bring landfall on Wednesday.
The recent warnings from Biden, Mayorkas and experts about disaster financing stand in stark contrast to the optimism of the financial projections made before Milton focused on Florida’s Gulf Coast.
At a news conference Monday, a senior FEMA official sought to reassure the public about the agency’s immediate capabilities, without directly answering questions about the agency’s ability to pay for long-term recovery.
“We support the lifesaving needs that we have,” said FEMA Acting Associate Administrator for Response and Recovery Keith Turi, referring to Helene and Milton. “If there is a time when we need to take additional measures, … we will take those measures when the time is appropriate.”
Turi added that FEMA was moving three search and rescue teams from California to the Southeast and is receiving assistance from the Coast Guard.
The state of federal disaster programs is putting pressure on Congress to end the election season recess early and approve additional disaster aid.
On Sunday, Johnson reiterated his refusal to convene the House ahead of its scheduled return on November 12. “We will help people in these disaster-prone areas,” Johnson told Fox News. “It will all happen in due time.”
A triple budget crisis
The three major federal disaster programs have faced budget problems before. But it never happened all at once.
Current tensions are the result of long-standing weaknesses in programs colliding with increasing damage from disasters caused by climate change and development.
“The frequency and intensity of disasters continues to increase every year, and the number of federal disaster declarations continues to rise in parallel,” said Carrie Speranza, president of the International Association of Emergency Managers.
Carlos Martín, director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies, said FEMA is now having trouble paying not only the long-term disaster reconstruction costs, but also the emergency costs on the short term.
“If you question that, and that becomes a question of whether the federal government will play the role it has played for the last fifty years, then that is a major concern,” Martín said.
FEMA’s multibillion-dollar Disaster Relief Fund faced problems in early August when it was running low, and the agency imposed restrictions that led it to temporarily freeze $9 billion for reconstruction projects.
Although FEMA lifted the restrictions on Oct. 1 when Congress appropriated $20 billion for the current budget year, the agency could quickly burn through that money and be forced to reimpose the restrictions if lawmakers don’t provide additional funding in the coming months.
Mayorkas warned last week that FEMA “doesn’t have the money to get through the crisis [hurricane] season,” which ends on November 30.
White House Press Secretary Karine Jean-Pierre echoed a similar theme Monday, saying, “The FEMA Disaster Relief Fund is facing a shortfall at the end of the year.”
“Repairing this will be very expensive,” said Zimmerman, the former FEMA official. “These response efforts are very expensive with all this search and rescue work.”
FEMA’s National Flood Insurance Program, or NFIP, could run out of money because of weaknesses when Congress created the program in 1968 and did not require insurance premiums to reflect a property’s potential for flood damage. The inadequate premiums forced FEMA to borrow $20.5 billion from the U.S. Treasury Department after Hurricanes Harvey, Irma and Maria in 2017.
FEMA has paid billions of dollars in interest on the debt, which it says it cannot repay. This only allowed FEMA to borrow an additional $10 billion to pay insurance claims.
“I don’t think the NIV needs to delve into credit authority for Helene,” said Sridhar Manyem, senior director of sector research at credit rating agency AM Best. “But Milton is a different story. That could be a game changer.”
Hurricane Milton “could deplete the NFIP and require the government to provide more funding for payments to NFIP policyholders,” said AM Best Associate Director David Blades.
FEMA said it has the ability to pay $14.8 billion in NFIP claims “without seeking additional assistance from Congress.”
The only disaster to exceed that level is Hurricane Katrina, which resulted in damage payments of more than $16 billion while killing more than 1,300 people in New Orleans and elsewhere. Like Katrina, Milton has risen to Category 5 fury over the warm waters of the Gulf of Mexico, and is expected to remain dangerous even if winds ease before hitting land.
Jeremy Porter, head of climate implications research at the climate risk modeling firm First Street, offered a more optimistic view: Helene and Milton “are unlikely to exhaust the NFIP’s borrowing authority,” he said, in part because few residents have national flood insurance. in hard-hit areas of Georgia and North Carolina.
Anne C. Mulkern and Mike Lee contributed to this report.
