FEMA Reform:
Improving Disaster Response to Reduce Risk and Protect Taxpayers

FEMA’s disaster recovery process is often slow, leaving communities waiting years to complete rebuilding projects. The agency’s Public Assistance Program generally reimburses state and local governments and certain nonprofit organizations for eligible disaster costs, requiring applicants to document expenses, negotiate project worksheets, and resolve disputes before receiving final payments. Disaster projects remain open years or even decades after the disaster occurred.

Disaster survivors may need to apply separately for assistance from FEMA, the Small Business Administration, the Department of Housing and Urban Development, the Department of Agriculture, and other agencies. Each program has its own eligibility rules, deadlines, documentation requirements, and appeals processes. Survivors already dealing with damaged homes, lost income, and displacement are expected to determine which programs may help them and how those programs interact.

Federal reporting often tells taxpayers how much money was obligated or spent, but not what that spending accomplished. Taxpayers need evidence to know whether recovery and mitigation investments reduced future risk, shortened recovery times, improved infrastructure, or prevented repeat losses. Without clear outcome-based measures, Congress and the public cannot determine whether disaster programs are delivering value.

Federal taxpayers repeatedly help rebuild properties and infrastructure in areas known to face flooding, wildfire, hurricanes, and other hazards. When federal assistance is not tied to stronger building standards, responsible land-use decisions, or other risk-reduction measures, disaster programs can unintentionally subsidize continued development in high-risk areas.

Reducing the federal share of disaster spending does not necessarily reduce the actual cost of disasters. States may raise taxes, delay recovery, or reduce other services while communities continue to face the same risks. TCS believes meaningful reform should focus not simply on changing who pays after disasters, but on reducing the risks that create those costs in the first place.

Mitigation is one of the most effective ways to reduce future disaster costs. Some estimates suggest every dollar invested in mitigation can save up to $13 in post-disaster spending. Congress should strengthen investments that reduce disaster risk, encourage resilient rebuilding, direct funding to projects with the greatest long-term benefits, and ensure mitigation dollars reach communities before the next disaster strikes.

Federal disaster policy should reward actions that reduce taxpayer exposure. Stronger building codes, risk-informed land-use planning, appropriate insurance coverage, and state and local investments in resilience should all be reflected in how federal disaster assistance is allocated. Reform should encourage better decisions before disasters occur, not simply determine who pays afterward.

Communities should not have to wait years for assistance, but taxpayers also deserve confidence that disaster dollars are spent effectively. FEMA should streamline recovery while expanding transparency through outcome-based performance measures, independent audits, and better public reporting on disaster spending and program performance.

Congress should clarify the federal role in disasters, establish objective and transparent criteria for major disaster declarations, strengthen coordination across disaster programs, improve public reporting, and address long-term challenges such as the National Flood Insurance Program. The goal should be a disaster system that responds quickly, encourages risk reduction, protects taxpayers from ever-growing disaster costs, and protects lives.