The Federal Emergency Management Agency oversees America's disaster-relief system. It sits within the Department of Homeland Security, whose secretary must personally approve expenditures above $100,000.
The president has the authority to declare a disaster, which triggers federal aid. A state qualifies when damages exceed a threshold calculated as its population multiplied by $1.89. Over the past decade the president has declared an average of 63 disasters a year, up from 25 in the 1980s. Populous states already handle sizeable disasters on their own: Texas, for example, does not normally receive FEMA help for anything under $60m.
FEMA provides two main types of post-declaration aid. Individual Assistance goes directly to affected people, who receive on average only a few thousand dollars. Public Assistance, the much larger programme, reimburses localities for debris removal and repairs to public buildings. These grants operate as a cost-share, with the federal government covering a minimum of 75% and localities paying the rest. Presidents sometimes stump up more: Joe Biden covered 90% of Louisiana's outlay after Hurricane Laura in 2020.
Over the past half-century the federal government has assumed an ever-larger role in disaster relief. Initially it limited itself to flood control and repairs to public infrastructure. In the 1960s it began offering subsidised business loans, subsidised crop insurance and subsidised flood insurance to households. Seventy years ago the federal share of total catastrophe losses was less than a tenth; today it is at least half, and sometimes much more.
Average annual appropriations to FEMA were $5.8bn between 1990 and 2004. After Hurricanes Katrina, Rita and Wilma in 2005 marked an inflection point, that figure jumped to $25bn between 2005 and 2021. The average over the five years to 2025 was $42bn, driven partly by pandemic spending.
A paradox of disaster policy is that federal aid pays for recovery, but decisions about land use—where and how to build—are made locally. This creates a moral hazard: localities forgo insurance and pursue development in disaster-prone places, then expect a bail-out. In 2020 a study by the RAND Corporation found that just 28% of Public Assistance recipients' building-repair costs were covered by insurance.
Donald Trump initially spoke of eliminating FEMA, but softened after a flood in Texas in early July 2025 killed more than 135 people. His administration talks instead of making FEMA more "efficient". A fifth of the agency's permanent staff have left; the president is denying some governors' aid requests and taking longer to approve others. In April 2025 a FEMA memo proposed cutting federal spending by declaring fewer disasters and reimbursing at the minimum 75% rate.
I never failed to convince an audience that the best thing they could do was to go away.