Who Pays When Disaster Strikes, Now?

The Trump administration is proposing fundamental changes to federal disaster response, shifting from FEMA's current model toward block grants that give states more control. The goal: reduce federal bureaucracy and empower local decision-making. But new analysis raises important questions about whether states have the financial capacity to handle major disasters alone.

An Urban Institute study found that only 5 out of 31 disaster-affected states had sufficient reserves to cover what they would lose under proposed changes. Meanwhile, implementation challenges are emerging: delayed disaster declarations, staffing reductions at FEMA, and coordination issues between federal and state agencies.

TCS President Steve Ellis and Director of Research & Policy Josh Sewell examine both sides of this debate. While federal disaster response clearly needs reform to improve efficiency and accountability, they explore whether current changes are achieving those goals or creating new problems that could cost taxpayers more in the long run.