COVID-19: Trump Zeroing Out FEMA's Disaster Recovery Fund

The complexities of FEMA's Disaster Recovery Fund are too many to detail here in this blog post. In summary, Congress puts money into the fund every year to cover disaster relief payments to states and local jurisdictions that have a Presidential Declaration. If there are a number of big disasters, Congress has to act during the year to replenish the fund by authorizing the borrowing of more money. 2020 is a year where the expected number of hurricanes is such that we may run out of letters in the alphabet to name them.

One of President Trump's executive orders he signed authorizes taking (robbing?) money from the fund. There is around $50B in it right now. This segment from a Washington Post article explains, "One of the measures Trump signed on Saturday aims to provide $400 in weekly unemployment aid for millions of Americans. Trump said 25 percent of this money would be paid by states, many of which are already dealing with major budget shortfalls. The federal contribution would be redirected from disaster relief money at the Federal Emergency Management Agency. Those funds are not likely to last more than two months, and Trump would not say when the benefits would kick in."

It is a tangled web we weave. 

One last note is that local and state governments will need to start laying off employees since there is no federal funding on the horizon. Only the Democratic Congress has funds to help these governments in their COVID-19 proposal. The Senate and White House do not.  Republican states could delay for a few more months, but then when layoffs do come, they will have to be more significant than if they took earlier action.