Here’s the number to hang on to: 57 percent. That’s the share of local emergency management offices in America that run on one full-time employee or less, according to a new census by Argonne National Laboratory. Twenty-two percent have nobody full-time at all.

In October, FEMA Administrator Cameron Hamilton told the nation’s state emergency managers to build up their reserves and plan to handle most disasters without federal help, with changes that could start within six months. Days earlier, his seven-page memo to every FEMA employee named objective number one: reduce federal government dependency. The president’s FEMA Review Council has already proposed cutting the federal share of disaster costs from at least 75 percent to as little as 50 percent, phased in over two to three years.

Host Steve Ellis is joined by TCS Director of Research and Policy Josh Sewell, who read the memo so closely he checked whether someone had copied TCS’s homework. States should carry their share and prepare before the storm. TCS has said so for years. The question is how far this goes and how fast.

Can a state hire, train, and budget its way there in six months, when many legislatures meet for only part of the year and some only every other year? Who does the work if FEMA steps back? And what happens to FEMA’s know-how when its workforce is already down about 17 percent?

Plus: the weirdest line in the memo, why a levee can be a tool to flood your neighbor, and what taxpayers should watch for when Congress comes back to a December 11 funding deadline.

The question was never whether. It’s how far and how fast.

Transcript

Announcer (00:02):

Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget, spending, and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about, and pushed in Washington, brought to you by Taxpayers for Common Sense. And now the host of Budget Watchdog AF, TCS President Steve Ellis.

Steve Ellis (00:40):

Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place. For 30 years, TCS, that’s Taxpayers for Common Sense, has served as an independent, nonpartisan budget watchdog group based in Washington, DC. We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are in the political spectrum, no one wants to see their tax dollars wasted.

(01:02):

It’s the last week of October 2026. Election Day is next Tuesday. Last week in Little Rock, Arkansas, FEMA Administrator Cameron Hamilton spoke to the nation’s state emergency managers. His message: “Build up your reserves. Plan to handle most disasters without federal help. And the changes can start within six months.” A few days earlier, he sent a seven-page memo to every FEMA employee. Objective number one: reduce federal government dependency.

(01:31):

Now, here’s the thing. A lot of that memo sounds like we could have written it. States should carry their own share, prepare before the storm, put money into mitigation up front. We’ve been saying it for years, for 30 years. But here’s the number to hang on to: 57 percent. That’s the share of local emergency management offices in America that run on one full-time employee or less. So the question isn’t whether states should do more. It’s how far this goes and how fast. Josh Sewell read that memo so closely, he checked whether someone had copied our homework. Josh, welcome back to Budget Watchdog AF.

Josh Sewell (02:11):

Thanks, Steve. It’s good to be here.

Steve Ellis (02:13):

Josh, start us with the news. What did Administrator Hamilton tell the states in Little Rock, and what’s in the memo he sent to his own people?

Josh Sewell (02:22):

Yeah. Administrator Hamilton reiterated the administration’s, we’ll call it, desire to reduce the federal government’s role in responding to and preparing for disasters. And it’s mainly by having states have what he called appropriate financial reserves and other abilities.

Steve Ellis (02:39):

That’s not really news, at least not to folks who follow this issue. From almost day one, the administration has sought to reduce the role of the Federal Emergency Management Agency, FEMA, right?

Josh Sewell (02:49):

Yes. In fact, the administration wanted to disband the agency completely at the beginning of this administration, before backing off, basically. That said, the timetable on this is actually new. It was mentioned at this meeting that these, call them potentially fundamental changes to FEMA and disaster policy, could be rolled out in six months, approximately. So that’s also the first time where it’s, I call it, a semi-public extension and expansion on that internal memo that was sent around FEMA.

Steve Ellis (03:24):

You told me that you read that memo and found little that we opposed. So what’s in it?

Josh Sewell (03:29):

The first objective calls for a FEMA that promotes good governance, responsible investment, and stronger emergency management capabilities at every level of government.

Steve Ellis (03:39):

Sounds pretty good to me.

Josh Sewell (03:40):

Yeah. And they even framed their first objective as, I think you mentioned this at the opening, reduce federal government dependency. And an important part of that, as they mentioned, is a goal of increasing the resilience of communities.

Steve Ellis (03:53):

Sort of like increasing resilience, not dependence on federal farm subsidies. I mean, federal disaster subsidies.

Josh Sewell (04:00):

Exactly. As fiscal conservatives, I mean, we talk about all safety nets, ag included, as needing to not promote dependency. That’s less about ideology, at least for me and us, than it is finances. Limited funds, limited resources, $40 trillion in debt. That means we cannot, as a government, afford to have a federal spending solution be the very first response for every single issue.

Steve Ellis (04:27):

Especially when there are non-federal resources that can be used, federal assistance should be a backstop for catastrophic and extraordinary events. A supplement for the unordinary, non-routine costs. Break glass in case of emergency kind of thing. Not replacing or displacing non-federal funds and responsibility.

Josh Sewell (04:46):

Again, I don’t know if you’re quoting from the memo or if you’re just saying what you think, because the lines are blurred. The memo also mentions that the federal dollars should be spent in areas of demonstrated need, produce measurable outcomes, reduce risk, and have buy-in from states and communities. These are all things we’ve literally called for, word for word. And not just we, including you.

(05:09):

So I know you may remember that last summer, in a previous podcast right here, I believe it was you who said that states should have to keep a set share of their budget, and you called it a rainy day fund. Now FEMA’s administrator is telling every state to build reserves, to build that rainy day fund. So, I mean, it’s weird, to be honest. Maybe refreshing that we could be on the same page as this administration.

Steve Ellis (05:35):

Well, let’s see. The memo is principles and a lot of good language, but it lacks details. The president’s FEMA Review Council put numbers on paper back in May. Walk us through what it actually proposes.

Josh Sewell (05:48):

Yeah, that May report had much more detail. It was a very long report. But one big change would be in FEMA’s main program, which covers everything from emergency sandbagging and shelters to debris removal. A lot of things about protecting people, especially in the immediate, during the disaster and immediately right after. So currently in that program, the federal government covers at least 75 percent of the costs, and in some places up to 100 percent. Kind of depends on the circumstances. Now the Review Council, that report says we should be shifting that to a maximum of 75 percent and down to as little as 50 percent federally covered.

(06:27):

It also wants to do some other big things, like sending a lump sum payment to communities instead of waiting for detailed estimates, so the money would move faster. But it could also fall far short of the actual need. And one of the other things it does is it changes the formulas used to calculate, basically, when a disaster can be declared. So it would require a higher level of damage and a more severe disaster to become a federally declared disaster.

Steve Ellis (06:52):

Yeah, really the devil is in the details on all of this, because we’ve certainly talked about sliding shares for cost sharing, and how communities that do more to make themselves more resilient would get a higher share of federal assistance, to try to encourage communities and states to plan ahead for these inevitable natural disasters as they occur. So I think it’s really going to be about what are the incentives and getting those right, not just simply shifting the numbers around.

Josh Sewell (07:26):

Yeah, 100 percent, because shifting money doesn’t necessarily mean you save money. So we’re still going to be responding to disasters. And by we, it means the federal government, state governments, local folks. So someone’s going to be responding and someone’s going to be paying. So the devil is definitely in the details.

Steve Ellis (07:44):

Now, Josh, I read the memo too, and as we’re saying, most of the words are fine, but words are cheap. Some critics say the memo’s plain language is papering over how big the council’s changes really could be. Are they reading too much between the lines?

Josh Sewell (08:00):

Well, time will tell, but frankly, I would be worried that the memo is softer than the previous report, because remember, FEMA reform is front and center in Congress. And so the House Transportation and Infrastructure Committee, the committee of jurisdiction over FEMA, they passed the FEMA Act to make significant changes. Out of committee, almost. It wasn’t 100 percent support, I don’t believe, but it was pretty much everybody.

Steve Ellis (08:25):

Only three votes against. Pretty bipartisan.

Josh Sewell (08:28):

Yeah, that’s about as close to consensus as you’re going to get in DC. But the legislative clock, I mean, it’s October, late October. It looks like it’s going to run out this year and on this Congress. But FEMA reform is likely something that next Congress, both sides of the aisle, both chambers, will want to tackle.

Steve Ellis (08:49):

Yeah. And I mean, there has been some interest in the Senate. They’re not quite as far along as the House, but they certainly have that interest, and I’m sure that’s not going to go away. And the clock is an issue, as you’re saying, Josh. Last year, Administrator Hamilton himself said any handoff to the states should be a gradual phase-out, that pulling support suddenly is “not being a good partner.” The council said two to three years. Now we’re hearing six months. Can a state hire, train, and budget its way there in six months?

Josh Sewell (09:21):

No. I mean, it would be very unlikely. And that’s especially true when many legislatures in states, they meet just the first three to five, maybe six months of the year. And honestly, some of them only meet every other year. I had to look it up: Montana. They meet every other year, and thankfully they meet in the odd years, so they will be meeting next year. But having such a short, compressed period is going to be hard. And so if you make these drastic changes in February, March, April of next year, those legislative sessions, they may be over before we even know how these federal programs change, and thus change the potential financial obligations and responsibilities for these states.

Steve Ellis (10:02):

And staffing could be a real problem, because Argonne National Laboratory just published a census of emergency management offices, done with FEMA and the emergency managers’ own associations. More than half of local offices, 57 percent, run on one full-time employee or less. Twenty-two percent have nobody full-time at all. Josh, if not FEMA, who’s going to do this work?

Josh Sewell (10:27):

Well, that’s a great question. We’re talking about funding and the actual doing of the work. Those are both questions of who’s going to do this, because the work is going to happen. So the administration is telling states that you need to spend some of your own money planning for disasters and responding to them when they occur. But honestly, it looks like they just aren’t giving states adequate runway to do so.

(10:48):

And we can have a lot of debate, and we have, and we will continue to discuss with Congress and other folks, what is the appropriate role for the federal government? What do we expect them to do as far as beneficiaries of the spending? How much financial responsibility? What are your actual day-to-day responsibilities? But when that’s not even known yet, that’s not resolved, we can’t adequately plan for how to do it. And it does a real disservice, not just to the states and the people running these programs, but to the people who are being put potentially in harm’s way when a disaster does occur.

Steve Ellis (11:23):

Josh, you flagged one line as the weirdest in the whole memo. FEMA put it in bold: “Resilience must be built through capable jurisdictions, distributed operations, hardened infrastructure, effective mutual aid, and investments that reduce future disaster costs and consequences.” What is mutual aid doing in that?

Josh Sewell (11:44):

Yeah. So this stuck out to me, because so-called mutual aid is basically what the Treasury is for disasters, at least that’s my understanding. So states and communities, of course, should be better prepared for disasters. We’ve advocated for that for a long time. We have specific ideas of how to do it. But I don’t know that it’s fiscally sound policy to dictate to states how much money to set aside in a disaster account, or to have the federal government create some new multistate fund that I guess would be held at the Treasury, or maybe it’s a new type of Trump account. I don’t know what it would be, because there’s no details.

(12:25):

But frankly, setting aside funds, sometimes that’s appropriate. At the federal level, we have a Disaster Relief Fund, which is one of the ways we’ve tried to plan for and budget for disasters. But even having a fund can lead to other problems: temptation, a need to spend, an inability to spend on something else. Especially in states, most of them or many of them have balanced budget amendments. They can’t take on debt, and they can’t just spend money on whatever they want sometimes.

(12:56):

So in the end, it’s a long way of saying, reading through this report, reading through the memo, seeing the tea leaves, I think there’s just a fundamental disagreement about the federal government’s role in natural disasters. And it’s not just between us and the government. It might be within the administration itself. I can’t tell whether or not they think FEMA should even exist.

Steve Ellis (13:18):

There have been debates about the federal government’s role in disasters basically since the very beginning of our founding. I think that one of the things, when they’re talking about mutual aid, at least listening to what the administrator’s talking about, was the idea that neighboring states would help out affected states, without really recognizing that generally disasters don’t differentiate on state boundaries and only happen within one state or one county. They actually spread across. And so the neighboring states could be affected by the same natural disaster. We’ve seen hurricanes that have not only impacted the coast, but then track up through the country and have huge impacts in places like western North Carolina.

(14:04):

And so I think that’s part of the whole reason of having a federal government, is that the government bands together to help the various affected states. And so that’s something where states should have skin in the game, communities should have skin in the game. They should plan for future disasters. They should mitigate. But Uncle Sam has a responsibility here too, and that’s part of what the federal government’s role is in good disaster policy.

Josh Sewell (14:35):

Yeah. And I think, let’s be clear, we’ve had debates about the proper role of the federal government internally at TCS when it comes to disaster. That’s something that we’re always trying to figure out as well. And one thing I was thinking about when it comes to this setting aside funds and creating capacity and the expertise at a state level is, rivers are the border for a lot of states, right? And so there’s actually one of the disincentives. Let’s say, hypothetically, Illinois has a bunch of money saved for their disaster response, and you’ve got the floodwaters coming down. The floodwaters that go into Missouri could easily come over to Illinois. But now you’re not going to be necessarily incentivized to help your neighbor if you’re holding back the funds to protect yourself for when those levees break. And it just becomes this weird balkanization of funding when it doesn’t have to be that way.

(15:27):

And also, there’s an inefficiency of having everybody build the maximum capacity, or a significant amount of capacity, to respond to something and have the money for it when you’re not going to have a disaster in every location. We don’t do this for fire departments. We don’t do this for police departments. We don’t do this for most infrastructure. I mean, my town that I live in doesn’t have its own police force. We are part of the county’s police force. Same thing with the fire department. So it’s like, you don’t want too much. Frankly, just a balance. We’ve got to figure it out.

Steve Ellis (15:58):

And Josh, you mentioned levees and river boundaries and borders. I was still in the Coast Guard during the Great Midwest Flood of 1993, and certainly you saw levees failing along the Mississippi River. And Budget Watchdog AF Faithful, I’ve often said this, but I mean, a levee is a tool to flood your neighbor. I mean, basically, when the levee broke in Missouri, the people who were the happiest about that were the ones that were immediately across the river, because it took the pressure off of their levee. And so I think that’s something where you don’t want to have an arms race between Illinois and Missouri in building higher levees so that they can protect themselves and it’ll flood somebody else.

(16:43):

So there’s a federal role in deciding, okay, how big are the levees going to be? What is the flood damage reduction infrastructure? And obviously Illinois and Missouri have an important part of that and have to respond, and they do. There were National Guard troops, state National Guard troops, that were stuffing sandbags to save some of those levees. So I mean, it’s something where it may seem simple at the surface, but it’s really a lot more difficult.

(17:13):

And you said this earlier, and it’s an important thing to recognize, that shifting costs off of the federal government to states and localities doesn’t reduce the costs, necessarily. It reduces the federal costs, but it doesn’t reduce the overall taxpayer costs. And that’s when you need to be investing in things like mitigation. And that’s what the government should be doing: trying to use their assistance to help states actually plan and mitigate future disasters.

Josh Sewell (17:39):

And this memo talks about mitigation. But my concern is that you can talk about needing to invest in mitigation, but if you’ve so shifted the burden for doing this work, both from a personnel standpoint and from a funding standpoint, from the federal government to the states, mitigation funds are relatively easy to cut compared to response, because you’re planning for the future. You’re having to invest in something where you don’t see an immediate return. It’s pretty easy to see the return on responding to a disaster as the floodwaters are coming down or the tornado has just occurred. Planning for that future disaster, it’s frankly just harder to quantify, at any level. And so the justification, defending that investment, may be harder at the state level.

(18:31):

Now, I do think we need to have better incentives for it. But what they’re saying they want in this memo versus what it’ll actually look like on the ground, I think we’re starting to see that it’s not quite what we…

Steve Ellis (18:40):

Yeah, I’m reminded, Josh, of a comment that you made just a little over a week ago, that the federal Treasury is a mutual aid fund in which 50 sovereign states, five territories, and the occupied zone of the District of Columbia already contribute.

Josh Sewell (18:55):

So, point of clarification: technically, territories don’t pay income tax, I think, if I remember correctly. Unless their work is done, I guess, if you’re a teleworker and you’re actually employed domestically, maybe. But the point is still taken, that we all pay into this. We all should be getting benefits from it when necessary, just like in any other program, where we’re paying for plenty of nice roads out in the Dakotas. That’s part of our infrastructure, and so we’ve all got to do our part.

Steve Ellis (19:25):

Part of the whole reason for the federal government is to band together to support one another.

Josh Sewell (19:29):

There is a pre-FEMA world in disasters. I mean, if we’re going to bring back the Roaring ’20s and all the other policies we do, I mean, we didn’t have a FEMA in the 1920s, and disasters didn’t go so well back then.

Steve Ellis (19:40):

Yeah. Talk about floods: the Great Flood of 1927. So, Josh, let’s pivot here a little bit. Let’s talk about Washington itself. The memo says FEMA “must reduce unnecessary centralization in Washington, DC.” Push the decisions out to the regions. Push people out to the regions. Fine on paper, but FEMA’s workforce is already down about 17 percent. What happens to the know-how?

Josh Sewell (20:10):

This is one of those areas where a little centralization of capabilities can be a good thing, if it increases efficiency. So again, I think I mentioned this earlier, not every small town needs a disaster manager. We should have, as taxpayers, as communities, we should be building in flexibilities to move money, personnel, and expertise to where it’s needed. The DC-area FEMA personnel, they deploy to wherever a major disaster occurs. It’s not like they just sit in DC and work all the time. They actually go to these communities before the disasters occur and are there on the ground, often before the disaster hits, and they’re there to bring their experience to those communities. And I don’t know, you might lose that flexibility if folks are shipped out to somewhere else and not as easily deployable.

Steve Ellis (21:00):

Yeah. In some respects, Josh, it would be wasteful for every county and every state to have duplication in their resources and in their staffing. And so, yeah, it might relieve some stress off the federal government, but it would also then be redundancy, and that’s actually not a good thing, economically.

(21:22):

All right, Josh, let’s talk timing. We’re days from Election Day. Congress comes back to a December 11th funding deadline, and the flood insurance program authorization runs out the same day. The FEMA Act is still waiting in the House. Disaster aid is being decided case by case, and sometimes, unfortunately, seems on a partisan decision-making process. What should taxpayers watch for?

Josh Sewell (21:49):

I think mostly it’s last-minute changes. So, like you said, flood insurance, that program expires with the CR, and so it should be extended in whatever additional continuing resolution or appropriations package comes out. That’s how it traditionally has been done, so it should be in there. Now, there may be a disaster supplemental as well, or as part of that, which can include policy changes for better and worse. So that’s something to look for. Hopefully there will be few disasters between now and forever, but we’ll be watching, especially if there are additional disasters, to see if there is a continued politicization of disaster declarations, response, and funding. But a lot of this is, see what happens quickly. There’s a lot of other things that are on Congress’s plate, and then let’s get ready for next year.

Steve Ellis (22:40):

All right, Josh, let’s get you out of here on this. If TCS were writing the rule, what does a fair split between Washington and the states look like?

Josh Sewell (22:49):

Well, I’m going to have to work with Congress to figure that one out. I mean, I do. But I think 100 percent federal, yeah, certainly that’s not the answer. But we cannot expect states and communities to do this on their own. This is a rare area of bipartisanship, and we’re going to lean into it, because disasters affect everybody. And it is one of the best places to figure out what we can do better, because it’s in all of our own interests. There’s a history of bipartisanship, and frankly, it’s too important not to be.

Steve Ellis (23:23):

Josh, thanks for being here.

Josh Sewell (23:26):

Yeah, always happy to do it.

Steve Ellis (23:28):

And there you have it, Budget Watchdog AF Faithful. States should carry their share. We’ve said it for years. Prepare before the storm, pay for mitigation up front, keep something in the rainy day fund. But more than half the local emergency offices in this country run on one person or less, and the federal Treasury already is the one rainy day fund that all 50 states pay into. So the question was never whether. It’s how far and how fast. This is the frequency. Mark it on your dial, subscribe and share, and know this: Taxpayers for Common Sense has your back, America. We read the bills, we monitor the earmarks, and we highlight the wasteful programs that poorly spend your money and shift long-term risk onto taxpayers. We’ll be back with a new episode soon. I hope you’ll meet us right here to learn more.