This week, the House Transportation and Infrastructure Committee held a hearing to discuss FEMA reforms. The hearing follows a May report from the FEMA Review Council and passage of the bipartisan FEMA Act of 2025 from the Committee last fall. Hearing witnesses included former FEMA Administrator Craig Fugate and representatives from the National Association of Counties, the U.S. Chamber of Commerce, electric cooperatives, and insurers.

Policymakers and witnesses agreed there is an important federal role in disaster response, but raised fundamental questions about what that role should look like. Is the goal of federal assistance to make families whole, or to provide a safety net of temporary assistance? How do we balance ensuring states “have some more skin in the game” without pushing impossible costs onto local communities? What incentive do people have to buy insurance if the federal government is going to pay?

Members on both sides of the aisle and TCS have emphasized that effective reform should reduce long-term disaster costs by improving incentives before disaster occurs, not simply shift costs between levels of government after the fact.

Last September, the Committee passed the Fixing Emergency Management for Americans (FEMA) Act of 2025 (H.R. 4669). The bill — co-sponsored by Transportation and Infrastructure Committee Chairman Sam Graves (R-MO) and Ranking Member Rick Larsen (D-WA) — would address longstanding concerns about FEMA’s efficiency and effectiveness in disaster management, including restoring FEMA’s original status as an independent agency, changing FEMA’s Public Assistance Program from a reimbursement model to an upfront grant system, enhancing mitigation incentives, creating a universal disaster assistance application, and improving transparency.

Since the bill’s passage, the Administration has been preparing recommendations for improving FEMA. The FEMA Review Council released its final report in May. Its framework proposes raising disaster declaration thresholds, tightening eligibility, and reducing the number of events that qualify for federal aid —shifting a greater share of disaster costs and responsibilities to state and local governments.

The bipartisan FEMA Act is a strong start. Former FEMA Administrator Craig Fugate testified that the bill makes gradual progress, not sudden shocks, in incentivizing private and state-level risk reduction through a sliding scale federal cost share, which will reduce the long-term exposure to federal taxpayers. TCS has called on policymakers to implement additional reforms to strengthen federal and non-federal mitigation investments, including requiring risk-informed zoning and land-use planning, directing mitigation funding where it is most needed, and requiring the disbursement of mitigation funds to come with fixed timelines. The hearing reinforced these recommendations, with witnesses repeatedly pointing to stronger mitigation and better building standards as investments that lower future disaster losses and federal costs.

The bipartisan FEMA Act is a strong start. Former FEMA Administrator Craig Fugate testified that the bill makes gradual progress, not sudden shocks, in incentivizing private and state-level risk reduction through a sliding scale federal cost share, which will reduce the long-term exposure to federal taxpayers. TCS has called on policymakers to implement additional reforms to strengthen federal and non-federal mitigation investments, including requiring risk-informed zoning and land-use planning, directing mitigation funding where it is most needed, and requiring the disbursement of mitigation funds to come with fixed timelines. The hearing reinforced these recommendations, with witnesses repeatedly pointing to stronger mitigation and better building standards as investments that lower future disaster losses and federal costs.

Policymakers and witnesses also raised the question of how to balance a quick response while ensuring systems are in place to prevent waste, fraud, and abuse. FEMA, by its nature as a disaster response agency, involves more operational risk than many other federal agencies. Fugate testified that if you want to go fast, you’re going to take more risks. But, as Rep. Scott Perry (R-PA) countered, risks don’t mean that because there is a disaster, we should simply throw money away and accept that as the cost of doing business. TCS has called for additional taxpayer safeguards in FEMA programs, including reporting outcome-based metrics, tracking and publishing hazard-specific spending, mandating independent audits, and other measures to ensure taxpayer dollars deliver tangible results.

The time to act on FEMA reform is now. The current system will only become more strained as natural disasters become more frequent, severe, and expensive. The average number of major disaster declarations, the level at which a disaster overwhelms a state’s resources and ability to respond, has increased from an average of 39 in the 1990s to 63 over the past ten fiscal years. The FEMA Act of 2025 would provide fundamental changes that reduce lost lives, speed recovery, and lower costs for taxpayers.