The Federal Emergency Management Agency has restricted its disaster spending to lifesaving operations after the Disaster Relief Fund fell below $3 billion and the agency invoked Immediate Needs Funding restrictions, just over a month before the Atlantic hurricane season opens June 1, with the Department of Homeland Security shutdown now in its 11th week.
Under Immediate Needs Funding, FEMA pauses new public assistance reimbursements, hazard mitigation grants, and most longer-term recovery obligations, while continuing direct aid to survivors, emergency response, and disaster-response staff salaries.
The agency's chief financial officer triggers the restriction to preserve cash for at least one major catastrophe.
The restrictions come during the second federal funding lapse of 2026.
The DHS-only shutdown began Feb. 14 after Senate Democrats pulled support for a Homeland Security appropriations bill following the killing of Alex Pretti by Customs and Border Protection agents.
House Republicans are insisting on a reconciliation bill that funds ICE and CBP as a precondition for any DHS package, and Speaker Mike Johnson, R-La., said this week that the Senate-passed bill would require changes in the House.
FEMA officials say invoking Immediate Needs Funding during an active appropriations lapse is unprecedented.
The agency has used the restriction multiple times since 2003, most recently in August 2024, but never while its parent department was unfunded.
Roughly 10,000 FEMA employees, including permanent staff and disaster-response personnel hired under the Stafford Act, are paid from the Disaster Relief Fund rather than annual appropriations, with payroll running $300 million to $400 million a month, CBS News reported.
The structure has insulated FEMA workers from missed paychecks during prior shutdowns but makes salaries one of the largest ongoing draws on the account.
Victoria Barton, FEMA's associate administrator for external affairs, told CBS News that reimbursements to rural hospitals for past disasters will be paused under the new posture.
"Disasters are unpredictable. They're very costly. We don't know what could happen between now and June 1," Barton said.
The threshold is calibrated to ensure FEMA can absorb a single catastrophic event.
Major storms routinely run into the tens of billions; NOAA's most recent estimates put Hurricane Katrina at roughly $200 billion and Hurricane Harvey at roughly $160 billion in inflation-adjusted damage.
Federal law generally requires FEMA to reimburse state and local governments for at least 75% of eligible costs after a presidential disaster declaration.
Forecasters expect a near- or below-average 2026 season because of an emerging El Nino, with Colorado State University projecting 13 named storms, six hurricanes and two major hurricanes.
The shutdown has also curtailed FEMA training for state and local emergency managers, and the agency has skipped the National Hurricane Conference and the National Emergency Management Association Midyear Forum, where preseason coordination is typically finalized.
The National Flood Insurance Program is operating under reduced capacity, delaying policy renewals in flood-prone markets.
Restoring full Disaster Relief Fund flexibility requires Congress to enact a DHS appropriations bill or a continuing resolution covering FEMA.
Neither chamber has scheduled a vote to clear that bar this week.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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