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1 [1] (January 2, 2025)

handle is hein.crs/goverwb0001 and id is 1 raw text is: Disasters and the Federal Budget Updated January 2, 2025 Increasing frequency and severity of wildfires, storms, floods, and droughts, as well as the recent COVID-19 pandemic have led to questions about the federal government's role with regard to these incidents, and what this may mean for the federal budget in the future. This In Focus clarifies the language used to evaluate the severity of incidents, explains who determines whether an incident qualifies as a disaster in terms of federal assistance, and describes how federal disaster assistance fits into the budget process. Damages, Losses or Costs, and Spending While incidents of severe weather and other hazards occur regularly, not all are considered disasters. Such determinations are typically based on their consequences, which vary significantly based on where they occur. For example, a strong tornado that touches down in a fallow field is generally less consequential than one that strikes a developed area or critical infrastructure. Evaluations of incidents may include Damages: the physical harm caused by an incident. Losses or Costs: what has been degraded or ceased to exist as a result of an incident. These losses can be described in a variety of ways, including in economic, social, environmental, and cultural terms. Losses and costs are often used interchangeably. Some observers define costs as the financial valuation of losses. Such valuations vary based on the observer's perspective. Spending: the actual outlay of funds pursuant to an incident, by individuals, organizations, or governments. In short, disaster damage can cause losses, which may or may not be remediated through spending. The decision to request or appropriate funds in response to incidents hangs on a variety of factors, and the parameters of assistance programs change over time. Also, some disaster assistance programs don't require a disaster declaration, only a qualifying loss. As a result, comparative analyses of spending are an imperfect lens for assessing disaster trends. Who Says an ncident Is a Disaster? Most often, when incidents are being discussed as disasters, it is in the context of the definition (and declaration process) provided by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 100-707; hereinafter Stafford Act). When a disaster declaration is requested by a state, territory, or tribe, the Federal Emergency Management Agency (FEMA) makes recommendations to the President on whether to approve it based on damage assessments and loss projections. Other federal agencies, including the U.S. Department of Agriculture (USDA) and the Small Business Administration (SBA), sometimes rely on Stafford Act declarations to establish eligibility for assistance in their own programs. The Secretary of Agriculture and the SBA Administrator also have the ability to make their own disaster determinations. Many of the SBA and USDA disaster assistance programs do not require a disaster declaration for claimants with qualifying losses to receive assistance. Resolving Direct Federal Disaster Losses Federal government assets and facilities are periodically damaged in disasters. Restoring their value or capacity is not built into typical annual budget requests, and supplemental appropriations are often needed to do so. Such spending generally is not considered disaster assistance. A Note on Federally-Backed Insurance The USDA and FEMA run crop and flood insurance programs with federally-subsidized premiums that receive mandatory funding. As spending from these programs is the result of claims filed by policyholders to cover insured losses, rather than assistance programs triggered by disaster declarations, these programs are not discussed here. Disaster Assistance At least 30 different federal agencies lead or coordinate aspects of disaster assistance. The majority of outlays for federal disaster assistance dollars are from FEMA, USDA, and SBA programs. Periodically, disaster recovery resources are also provided through the Community Development Block Grant-Disaster Recovery (CDBG-DR) program (run by the Department of Housing and Urban Development (HUD)) and the U.S. Army Corps of Engineers (USACE). FEMA's disaster-related activities authorized under the Stafford Act are funded through the Disaster Relief Fund (DRF). While some relief is provided to individuals and households, most funding goes to the Public Assistance program, which supports immediate disaster response and longer-term recovery efforts by state and local governments, as well as eligible nonprofits. The DRF only funds Stafford Act activities; it does not fund other agencies' disaster programs or other FEMA activities. SBA disaster loans, CDBG-DR, USACE, Department of Transportation disaster activities, and some USDA disaster programs, are funded through discretionary appropriations. In contrast, several USDA disaster assistance programs receive funding from the USDA Commodity Credit Corporation through appropriations in law, and are classified as mandatory spending.

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