The FY 25 Disaster Supp
The final achievement of the Biden Administration: a massive package of disaster assistance, recovery, and preparedness (and a few other things, too).
The final budgetary achievement of the Biden Administration is a massive funding package focused principally on disaster recovery from numerous U.S. and international storm, flooding, and fire events over the last several years. This package was enacted into law on December 21, 2024, after passing the Congress by a wide margin.
The funding is particularly important for recovery from recent hurricanes Helene and Milton, the Francis Scott Key Bridge disaster in Baltimore, Maryland, and devastating 2023 wildfires in Maui, Hawaii. But resources will also be used for recovery from other weather events including those lesser-known causing impactful flooding, fires, and tornados, and major storms overseas such as Typhoon Mawar impacting U.S. defense operations.
Core Elements
As shown in the table above, funding in the package totals $117 billion. Nearly $100 billion is for disaster- and disaster-related items; 85% of the funding total. The single largest portions: $29 billion to replenish FEMA’s Disaster Response Fund (DRF) and $21 billion in assistance to farmers for disaster-related crop and livestock losses.
According to the Congressional Research Service in a November 2024 report, FEMA indicated that it may run out of funding for major disasters as soon as January 2025 if DRF funding was not replenished, the federal government’s principal disaster funding source, after having more than $22 billion of uncommitted funding remaining as of October 2024.
The FEMA DRF had a $79 billion balance of funding that has been committed, but not actually spent, for all disasters as of the end of FY 2024, up from about $72 billion over the last couple of fiscal years. It can take many years to spend all funding connected to any specific disaster given the time it takes to properly assess damage, develop a plan, secure funding, and execute recovery projects.
All told, the enacted funding package includes:
Nearly $70 billion for individuals, business, and communities to help recover from disasters;
$14 billion to address infrastructure needs; and,
$16 billion for federal operations, facilities, and land recovery costs.
Not Only For Disasters
Among the non-disaster funded elements, there were three very large additions to the supplemental: $10 billion in general economic aid to farmers and ranchers to address adverse market conditions (which could worsen given the potential for international trade tensions in 2025), $5.7 billion for Virginia Class Submarine costs, and nearly $1 billion to improve national security information technology systems in the Defense Department, the FBI, and other entities.
Economic aid to farmers/ranchers, in particular, reportedly was considered to be a “must have" for critical needs in agricultural communities to help ensure the package’s broad support in Congress.
Looking Foward
While increased federal spending is undoubtedly beneficial for disaster-stricken regions, it raises concerns about impact on the U.S. budget deficit, federal debt, and inflation. That being the case, this funding package underscores the importance of a responsive and well-resourced federal government in managing crises.
From a political standpoint, this funding action clears-the-deck for the incoming Trump Administration to avoid at least one necessary spending measure that they likely don’t have to worry about at least for most of FY 2025 (unless an exceptionally-large scale event occurs.)
There will be more, much less palatable but necessary, spending measures in the coming months.