Yes, FEMA has enough money to cover unemployment and disaster relief
Even after President Donald Trump diverted $44 billion from the Federal Emergency Management Agency to pay for federal unemployment benefits, its disaster relief fund will still have at least $25 billion to use in response to hurricanes, fires and other natural disasters over the next month.
Posted — UpdatedTo put that in context, FEMA spent about $20 billion on its response to Hurricane Sandy -- the fourth-costliest US storm ever -- over several years. When Sandy hit the East Coast in 2012, there was about $6 billion in the fund, said former FEMA Administrator Elizabeth Zimmerman, now an adviser at the disaster management company IEM.
There are two reasons the disaster relief fund is flush with cash right now. Congress allocated an extra $45 billion to help with Covid-19 relief as part of its $2 trillion package passed in March. And some of the money in the fund was previously allocated to help the recovery from storms in earlier years. That money is meant to be spent over time, but isn't usually earmarked for specific projects.
Even if the disaster relief fund runs low, the fiscal year is over at the end of September and FEMA would get likely more money from Congress' annual spending bill. And Congress can appropriate supplemental funds if a catastrophic event hits before then.
"It's not uncommon for Congress to do that in the event of a major disaster. But it is a little bit like rolling the dice, especially in an election year," said Joseph Trainor, a faculty member at the University of Delaware's Disaster Research Center.
It's too early to tell how much the destruction from Hurricane Laura, which made landfall earlier this week, will cost FEMA. But the destruction is far less than initially expected.
Still, the agency's staff is stretched thin. Emergency management responders were already facing unprecedented demands as they juggled wildfires, hurricanes, and ongoing disaster and recovery efforts amid the nationwide pandemic.
Trump signed an executive action to divert disaster relief funds to the unemployed on August 8, after Congress failed to extend the $600 federal boost it had approved in late March to aid those affected by the pandemic. That supplement expired July 31.
Under this new program, those out of work are eligible for a $300 weekly benefit (or $400 if states chip in extra money). But it's expected to be able to pay out only four to five weeks of benefits, depending on how many states apply and how quickly the funds are drawn down.
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