New analysis warns FEMA overhaul would make disaster aid harder to access, shifting costs to survivors

A new analysis warns that a proposed overhaul of the Federal Emergency Management Agency by a Trump-appointed panel would limit access to federal disaster aid for survivors, shifting the burden to state and local governments amid hurricane season.

Last month, the FEMA Review Council floated sweeping changes to the disaster agency, turning it into a leaner organization that plays a supporting role in reacting to natural disasters, requiring state agencies to take the lead. The proposed overhaul, much of which requires congressional approval, came after President Trump suggested trying to “wean” states off of FEMA or eliminating the agency altogether.

But a report penned by Sabotaging Our Safety argues the FEMA Review Council’s plan would first make federal disaster aid harder to unlock, raising the threshold to declare a major natural disaster so high, it would have excluded nearly one-third of declarations spanning from 2012 to 2025.

The progressive disaster preparedness advocacy group is advised by elected officials, labor leaders, political organizers and emergency management veterans. The group argues that FEMA’s rebrand would replace FEMA Public Assistance grants — which totaled approximately $180 billion over the past five years — with formula-based block grants that may not reflect the actual cost of rebuilding roads, schools, hospitals and other damaged infrastructure.

For individual survivors, fifteen categories of assistance would instead be collapsed into one capped payment, leaving survivors with fewer options for help with housing, medical costs, funeral expenses, vehicle repairs and other disaster losses.

For flood-zone families, the report warns the overhaul would accelerate insurance changes that could drive up premiums and price low-income households out of coverage, leaving some of the most at-risk Americans with less protection before the next storm.

Public recovery grants would be replaced with a formula

One of the most consequential changes proposed by the Review Council is the replacement of FEMA’s Public Assistance program – a federal program that helps state and local governments pay for debris removal, emergency protective measures and the repair of roads, bridges, schools, hospitals, utilities and other public infrastructure. 

Under its proposed replacement, dubbed “RAPID,” FEMA would move away from project-by-project reimbursement based on documented damage, instead issuing a lump-sum grant calculated through a formula tied to disaster metrics such as wind speed and flood depth. The Sabotaging Our Safety report suggests this might create a built-in gap between federal aid and real recovery costs. 

“The cost of rebuilding a school, a water system, a county road network, or a hospital depends on local construction costs, infrastructure age, code requirements, and supply chain conditions that the pre-set formula doesn’t even attempt to capture,” the report says. “Basing payments off the expected magnitude of a disaster, rather than the cost of damage sustained, creates an inherent gap borne entirely by states and localities.”

The RAPID program would also require federal funding to be spent within eight years, a deadline Sabotaging Our Safety called “divorced from reality.” 

The report warns that RAPID’s eight-year deadline could prevent major disaster recovery, with the rebuilding of public infrastructure often involving “permitting, procurement, engineering, and construction cycles” often stretching beyond a decade, particularly when supply chains are disrupted. 

Flood insurance premiums could rise sharply

The report warns the overhaul of FEMA could increase the cost of flood protection for low-income households most likely to need it. For instance, under Risk Rating 2.0, FEMA’s newer way of pricing flood insurance through the National Flood Insurance Program, new policies are projected to fall by 11% to 39% overall. 

But the report argues that the decline could be far steeper in low-income ZIP codes — by as much as 60%, compared with as much as 32% in the wealthiest areas — pushing flood insurance out of reach for the people most exposed to floods. 

Premiums would also rise sharply in the highest-risk places, including by 279% in the most flood-exposed ZIP codes under full risk-based pricing, according to the report, adding more than $2,000 a year for some households. The impact, Sabotaging Our Safety says, would drive a persistent trend of “driving low-income communities out of coverage.”

Currently, the NFIP is about $20 billion in debt, and more than 400,000 homes in the Southeast and central Southwest are underinsured for inland flooding. For homeowners with federally backed mortgages in Special Flood Hazard Areas, the report warns that losing affordable flood insurance could trigger “a cascade of financial consequences,” including escrow issues, problems selling and mortgage default.

Long-term housing, fewer disaster declarations

The report also warns the council has proposed ending FEMA’s role in long-term housing assistance, instead shifting responsibility for housing survivors with no place to go to states, territories and tribal governments.

Without that bridge between temporary shelter and permanent recovery, Sabotaging Our Safety argues that displacement can become permanent, especially for low-income families, renters, older Americans and people without insurance.

The FEMA Review Council is also proposing increasing the threshold for measuring whether disaster damage is severe enough to justify federal help, which typically compares the estimated damage to the state’s population, shifts even more burden onto states. 

That threshold, known as the “per-capita indicator,” would jump from $1.94 to $2.99, which the Sabotaging Our Safety report says would shift $1.5 billion in costs away from the federal government and onto states, counties and survivors.

The report found that raising that threshold for presidential disaster declarations would have kept 29% of major disaster declarations from qualifying between 2012 and 2025 — about 16 fewer declarations each year.

The impact, the group suggests, would make rural communities especially vulnerable because disaster thresholds are calculated against statewide population. As a result, extreme damage in a small rural county may not generate enough statewide per-capita impact to qualify for federal aid, even if the local damage is devastating to families.

It’s already hurricane season

FEMA is entering hurricane season under financial and staffing strain. The agency lost more than 5,000 employees since January 2025, with nearly half of its top 38 leadership positions vacant, though acting administrator Bob Fenton told CBS News that the agency was ready for hurricane season.

While FEMA has stated it is taking steps to stabilize its workforce and strengthen readiness ahead of hurricane season and the FIFA World Cup, the Government Accountability Office has warned that FEMA was already stretched thin before Trump-era workforce reductions and may not have enough staff if catastrophic disasters strike back to back.

In a statement, the Department of Homeland Security, which oversees FEMA, said the release of the FEMA Review Council final report marked “an important milestone in this Administration’s ongoing efforts to strengthen FEMA’s mission, operations and accountability,” adding that recommended changes “best serve the national interest.” 

“With Secretary Mullin at the helm, we look forward to continuing to enhance our operations and engage with our state partners to best provide the federal support they need during disasters,” a DHS spokesperson added.