The White House budget chief recently offered a reassuring message about hurricane season: The federal disaster fund is “flush” with enough cash to last through September.
But some emergency managers and officials were alarmed — not comforted — by budget Director Russ Vought’s comments, which contradict Federal Emergency Management Agency estimates that the disaster fund would run out of cash in August, leaving it with a $7.8 billion deficit in September.
The apparent misstatement came as President Donald Trump has promised to reduce FEMA aid, putting pressure on states to handle higher disaster costs as climate change intensifies storms, floods and wildfires. Some critics, including a senior lawmaker, expressed concern that Vought might have revealed a hint about Trump’s plan — if FEMA immediately shrinks the amount of aid going to states, the disaster fund could remain solvent through September.
Others think Vought lacks expertise in FEMA funding minutia. He’s “clueless,” said one former senior FEMA official.
Either scenario foreshadows trouble for states and communities at the start of what stands to be a perilous summer punctuated by destructive hurricanes and raging wildfires. FEMA allocates roughly $45 billion a year from the fund for cleanup, rebuilding and household emergency costs.
“We’re very concerned that it will run out of funding by the end of the fiscal year,” said Trina Sheets, executive director of the National Emergency Management Association, referring to the disaster fund during a webinar Friday.
The Office of Management and Budget did not address questions from POLITICO’s E&E News about the conflict between Vought’s remarks and the FEMA report. “As Director Vought said, the DRF is fully funded with a balance of over $13 billion,” OMB spokesperson Rachel Cauley said in an email after this article was published, referring to the Disaster Relief Fund.
If Vought misunderstands the financial risk facing the disaster fund, experts say, it could prevent the White House from asking Congress to replenish it this fiscal year. As the fund dwindles, FEMA could cut off funding for thousands of disaster-recovery projects beginning in July — a step it took in 2023 and 2024.
It’s also possible Vought understands the risk, according to other experts, and plans to keep the fund solvent through September by slowing down disaster payments. The strategy, which previous administrations have used, would promote Trump’s image of frugality and avoid the potential embarrassment of asking Congress for supplemental disaster funding.
“The administration is setting up a scenario where governors take the blame when things inevitably go badly, either because FEMA delays approving essential programs or there’s not enough federal money or personnel,” said Sarah Labowitz, a disaster expert at the Carnegie Endowment for International Peace.
Vought’s comments about the fund June 10 dovetailed with Trump’s assertions about constraining disaster spending.
“We’re in a very good place,” Vought said in the Oval Office, standing behind Trump. “The president has personally been a steward of taxpayer resources on every one of the expenses that states have come in for.”
Washington Sen. Patty Murray, the top Democrat on the Appropriations Committee, said Vought’s comments portend trouble regardless of whether he grasps the nuances of the fund or not.
“The White House budget director is now falsely claiming FEMA has the funds it needs to get through the summer,” Murray said in an email to POLITICO’s E&E News, adding that the disaster fund “will face a major funding shortfall.”
Another possibility, Murray added, is that “this administration’s plan is to simply deny communities ravaged by disasters the funding they desperately need to recover and rebuild.”
‘They’re flush’
Vought’s comments are the latest signal that federal disaster aid remains highly uncertain under Trump.
Trump has assailed FEMA for being an incompetent agency since taking office in January, going so far as threatening to abolish it. He recently cut off billions of dollars in annual FEMA grants that helped communities protect against future disasters. He has also whittled down its workforce at a time when the agency was already shorthanded, and has vowed to shift federal responsibility for disasters to states.
Yet Trump said at the Oval Office briefing last week that he won’t begin “phasing out” FEMA until “after the hurricane season,” suggesting a business-as-usual approach this summer.
Echoing Trump, Homeland Security Secretary Kristi Noem said at the briefing that a FEMA Review Council created by Trump and led by Noem and Defense Secretary Pete Hegseth will work on changes “over the next couple of months.” Noem, whose department oversees FEMA, said nothing about the disaster fund.
“The concern is that Congress won’t act on providing additional funding until there’s a supplemental budget request. And if the head of the OMB doesn’t seem to be aware there’s a need, they won’t make a request,” former FEMA Chief of Staff Michael Coen told E&E News.
“FEMA is going to have to stop funding recovery projects — fires in Maui, fires in California, the current recovery that just started in St. Louis,” Coen added.
The agency has on 10 separate occasions since 2003 cut off funding for long-term projects, such as rebuilding public facilities, when its disaster fund dropped to roughly $3 billion. The halt ensured that FEMA had enough money for emergency expenses such as search-and-rescue operations.
FEMA projected in its June 3 monthly report that the fund’s balance would drop to $2.8 billion in July and become a $2.9 billion deficit in August. The fund had $16 billion on April 30.
Vought said at the June 10 briefing that the disaster fund had $13 billion, adding that other federal disaster accounts “are funded, they’re flush.”
Vought’s numbers versus FEMA’s numbers
The disaster fund has faced chronic shortages in recent years due largely to Trump’s decision at the start of the pandemic in 2020 to give every state disaster aid for virus-related costs. Trump’s move was widely supported, but the costs claimed by states have exceeded projections by tens of billions of dollars.
The fund’s projected deficit in September has been known for months. It was included in every monthly FEMA report on the disaster fund since November. Four of the reports were produced by the Trump administration and signed by FEMA’s Trump-appointed leader.
In December, when Congress approved a temporary spending measure to fund the government into March, “We knew based on the funding that it wasn’t going to be enough to get FEMA to Sept. 30,” said Coen, who was chief of staff through the Biden administration. “FEMA told Congress at the time.”
In March, when Congress extended the spending measure to Sept. 30, the administration did not seek an increase in the planned appropriation for the disaster fund. At the time, FEMA projected the disaster fund would have a $14.6 billion deficit by Sept. 30.
The estimated deficit shrank after Trump canceled a FEMA grant program in April and shifted $4.1 billion from that program to the disaster fund.
Vought’s comments last week about the fund being “flush” stunned Coen.
“When he said that, I was like, this guy’s clueless. I just don’t understand how his staff wouldn’t have prepared him for that,” Coen said.
Federal law requires FEMA to release monthly reports on the fund and send them to the House and Senate appropriations committees. Neither Senate Appropriations Chair Susan Collins (R-Maine) nor House Appropriations Chair Tom Cole (R-Okla.) responded to requests for comment.
Previous administrations have warned the public about looming shortfalls within the fund.
Under former President Joe Biden, then-FEMA Administrator Deanne Criswell told a House Appropriations subcommittee in April 2023 that the fund would be empty in three months and needed additional cash. Biden did not ask for supplemental spending until August 2023, which forced FEMA to stop funding recovery projects for more than a month, until Congress approved more money.
