By Laura DeKoven Waxman
October 3, 2011

At the center of the controversy over the FY 2012 continuing resolution was funding for the Disaster Relief Fund, which the Federal Emergency Management Agency (FEMA) uses to fund the Individual Assistance, Public Assistance, and Hazard Mitigation programs to support disaster response and recovery efforts. With the spate of recent disasters and a record 84 declared disasters in 2011 as of September 23, the Fund was nearly depleted. Approved projects in communities that had disasters six months or a year ago, or longer, were placed on hold so that what are considered more urgent needs from the more recent spate of disasters could be met.

The issue came up on several occasions while the mayors were on Capitol Hill September 20 during the Conference of Mayors fall leadership meeting. In response, Conference of Mayors CEO and Executive Director Tom Cochran sent a letter to House and Senate leaders September 23 on behalf of the nation's mayors urging Congress to replenish the Disaster Relief Fund right away and to do so without requiring other programs to be cut. “If anything warrants emergency funding, it is disaster assistance,” Cochran wrote. “To do otherwise violates our nation's commitment to its communities and their residents and small businesses to help them recover from disasters – events over which they have no control.”

In the past, Congress has always replenished the Fund as an emergency measure and not required that the added funds be offset. This year some House Republicans demanded that a portion of the funds be offset, and the continuing resolution passed by the House September 22 included a $1.6 billion rescission of funds in the Energy Department's green technology loan guarantee program. From the rescission, $1 billion was for the Fund and the remainder was to go to deficit reduction. This approach had been strongly opposed by House Democrats and some Republicans. It was unacceptable to Senate Democrats and some Republicans, and the standoff ensued.

While FEMA had reported the previous week that the Disaster Relief Fund would run out of money early in the week of September 26, it announced on the 26th that it could make it through September 30, the end of the fiscal year. As a result, Senate leaders were able to remove the $1 billion in FY 2011 disaster aid from the continuing resolution, making the offset a moot point.

This means that the Disaster Relief Fund can be replenished as part of the FY 2012 appropriations process, first through the continuing resolution and later though an expected omnibus spending bill. As such it must be funded within the spending cap for homeland security programs. That means it is likely that other programs, including those which provide funding for disaster preparedness and first responders – will be cut. It is also likely that the appropriations will not be sufficient to pay for disasters that have already occurred and those which will occur in 2012 and that the Fund again will run out of money.