FEMA Review Council proposes raising disaster aid threshold and devolution to states

On May 7, 2026, the FEMA Review Council released its final report recommending sweeping changes to federal disaster aid policy. The council, a 12-member group of disaster experts chaired by DHS Secretary Markwayne Mullin, was established by Executive Order 14180 on January 24, 2025. President Trump extended the council twice to complete its work. The report now goes to the president for consideration; most recommendations require congressional action to implement. (DHS)

The council's central doctrine declares disaster response should be 'locally executed, state or tribally managed, and federally supported.' DHS Secretary Mullin said the agency needs to 'refocus FEMA to get it back on what its mission originally was.' Defense Secretary Pete Hegseth co-chairs the council alongside Mullin. Members include Tampa Mayor Jane Castor and former Republican National Committee Chair Michael Whatley. (Federal News Network)

The report's most significant recommendation raises the Stafford Act per capita threshold for federal disaster declarations by more than 50%. The current threshold sits at $1.89 per capita of state population, adjusted annually by the Consumer Price Index. A state with 5 million people needs about $9.45 million in damages to qualify for federal assistance. The council recommends switching from damage-based assessments to a parametric system using pre-defined metrics such as wind speed, flood depth, or earthquake magnitude. (NPR)

The council recommends transforming the National Flood Insurance Program by moving most flood policies to private markets. Congress created the NFIP in 1968 because private insurers wouldn't cover flood risk at affordable rates. As of early 2026, the program carries $22.5 billion in debt to the U.S. Treasury, with only $7.9 billion in remaining borrowing authority. FEMA pays $619 million in interest annually, accruing $1.7 million daily. (CRS)

Industry analyses estimate privatization would raise the average premium by 64%, or about $600 per year. Homeowners in high-risk flood zones would see much larger increases, up to $1,000+ annually in some states. Some properties would become entirely uninsurable in the private market. The NFIP's authorization expires September 30, 2026, creating a legislative deadline. (National Mortgage News)

The report proposes devolving major disaster preparedness and response responsibilities to states, tribes, and territories. A December 2025 draft recommended cutting FEMA's workforce by more than 50%, over 11,500 positions. The final report backed away from that specific target, instead calling for a 'transformed' FEMA and a review of workforce requirements. FEMA currently employs roughly 30,000 workers across permanent, temporary, and surge categories. (Federal News Network)

The Disaster Relief Fund dropped below $3 billion in late April 2026, triggering Immediate Needs Funding. The fund's balance fell to approximately $1.6 billion. Under Immediate Needs Funding, FEMA limits spending to urgent, life-saving activities only, delaying reimbursements and longer-term recovery projects. FEMA also canceled $11 billion in disaster payments to states. (CBS News)

Sen. Patty Murray (D-WA), ranking member on the Senate Appropriations Committee, called on House Republicans to pass the DHS funding bill to replenish the fund. The fund's depletion occurred after a government shutdown that began February 14, 2026, and lasted more than 70 days. (Senate Appropriations Committee)

The gap between advisory recommendations and legislative action matters critically. Under the Federal Advisory Committee Act (FACA), passed in 1972, the council's output is advisory only. The president and Congress aren't legally bound to adopt it. The president can't unilaterally raise the Stafford Act threshold (42 U.S.C. SS 5121) or privatize the NFIP; both require congressional approval. (CRS)

Some changes can proceed through executive action. DHS already began cutting FEMA disaster response staff in January 2026, before the council finished its report. The administration can reduce FEMA staffing through attrition, hiring freezes, or reorganization without congressional approval. (CNN)

Hurricane season begins June 1, 2026, approximately three weeks after the council released its report. Experts warn that devolution, combined with a raised threshold and a depleted Disaster Relief Fund, could leave communities more vulnerable during peak storm season. The timing creates a window where federal disaster capacity is shrinking while states haven't yet built replacement systems. (Washington Post)

Congress holds the key legislative tools. Rep. Sam Graves (R-MO), who chairs the House Transportation and Infrastructure Committee, introduced the bipartisan FEMA Act of 2025 (H.R. 4669), which passed committee 57-3. That bill would reorganize FEMA as an independent cabinet-level agency, a different direction from the council's recommendation to devolve and shrink. Rep. Rick Larsen (D-WA) co-sponsored the bill. Sen. Rand Paul (R-KY), who chairs the Senate Homeland Security and Governmental Affairs Committee, has held hearings on FEMA waste and signaled interest in reform legislation. (House Transportation Committee)

Separately, the Disaster Declaration Transparency Act of 2026 (S. 4433) would create a procedure for Congress to reverse presidential decisions not to declare major disasters. (GovInfo)