The FEMA Review Council Votes May 7 on a Plan That Would Rewrite Federal Disaster Grants

Three days from now, a 12-person council appointed by President Trump will vote on recommendations that could dismantle the federal disaster grant system as it has existed for nearly half a century. The May 7 meeting of the Federal Emergency Management Agency Review Council — scheduled for 11:00 a.m. to 12:30 p.m. Eastern — will include a presentation of the draft final report, a summary of 11,708 public comments, deliberations, and a public vote. The public comment period on the final report remains open until June 8.

What emerges from that vote could reshape billions of dollars in annual disaster assistance, eliminate half of FEMA's workforce, and shift the financial burden of disaster response from Washington to state capitols that are already struggling to balance their budgets.

What the Council Is Proposing

The FEMA Review Council was established by Executive Order 14180 on January 24, 2025, charged with assessing FEMA's operations and recommending structural changes. Its membership includes the Secretaries of Homeland Security and Defense, three North Carolina Republican congressional representatives, and RNC Chair Michael Whatley — a composition that emergency management professionals have noted is heavy on political operatives and light on practitioners.

An 89-page draft report, portions of which have been reviewed by journalists, outlines a suite of radical changes. The final report may differ, but the draft reveals the administration's direction of travel.

Raising the bar for disaster declarations. The council proposes adjusting FEMA's per-capita damage indicators for inflation — a technical change with enormous practical consequences. Under current thresholds, disasters qualify for federal declarations based on damage metrics that haven't been updated for decades. If those metrics had been inflation-adjusted retroactively, 29% of disasters declared between 2012 and 2025 would not have met the threshold, eliminating an estimated 16 declarations per year and $113 million in annual federal assistance. The administration's stated goal: "provide a broad suite of services only for catastrophic events, thereby reducing the number of events that require FEMA involvement."

Replacing public assistance with block grants. Rather than the current system — where FEMA reimburses state and local governments for documented disaster costs — the council recommends community block grants that would "provide rapid transfers of funds to states for response and recovery costs." Block grants sound efficient. In practice, they mean fixed allocations that don't scale with actual damage, and they shift the risk of cost overruns entirely to states.

Cutting FEMA's workforce in half. The draft recommends eliminating more than 12,000 positions, reducing the agency from roughly 24,000 employees to approximately 12,000. DHS has already begun: over 200 FEMA employees have been fired, with additional cuts targeting climate and equity-focused positions. The agency disbanded its congressionally-mandated National Advisory Council and eliminated $103 million in Legal Services Corporation funding.

Privatizing the National Flood Insurance Program. The council recommends pushing NFIP — which insures homes and businesses in high-risk flood zones — toward the private market. NFIP covers roughly 5 million policies nationwide and has been the insurer of last resort for communities where private flood insurance is either unavailable or unaffordable.

Elevating FEMA to cabinet level — or killing it. One of the council's "most contentious issues" is whether FEMA should remain within DHS, become an independent cabinet agency, or be folded into the Executive Office of the President. DHS Secretary Noem has stated the agency "should no longer exist as it is." The contradiction between cabinet elevation and effective dissolution remains unresolved in the draft.

The Administration Is Already Acting

The council's vote is a formalization. The administration has been implementing its vision in practice for months.

President Trump has denied six major disaster declarations and two emergency declarations outright — an unprecedented rate of denial. Seventeen additional requests were delayed for approximately a month before partial approval, with Hazard Mitigation grants systematically withheld. The pattern suggests that the inflation-adjusted thresholds are already being applied informally, before any formal policy change.

Meanwhile, FEMA's Disaster Relief Fund has dropped below $3 billion, triggering Immediate Needs Funding protocols that restrict the agency to lifesaving and life-sustaining operations only. As Granted previously reported, roughly $11 billion in Public Assistance reimbursements remain stuck in limbo across 45 states, with COVID-era obligations and a blanket review requirement creating a backlog that has not cleared despite policy changes. The DHS shutdown that began February 14 and lasted 11 weeks compounded the problem, freezing FEMA's grants management system and halting disbursements on active awards.

The combined effect: communities that suffered disasters in 2024 and 2025 are still waiting for federal reimbursement, while the mechanism for future disaster assistance is being redesigned from scratch.

What Block Grants Would Actually Mean

The shift from public assistance reimbursement to block grants is the most consequential proposal for grant-dependent organizations, and it deserves scrutiny beyond the talking points.

Under the current system, a county that spends $50 million on hurricane debris removal submits documented costs to FEMA and receives reimbursement — typically at a 75/25 federal/state cost share, though recent disasters have received 90/10 or even 100% federal shares. The reimbursement tracks actual costs. If the disaster is worse than expected, the federal share scales up.

Under block grants, states would receive a fixed allocation based on predetermined formulas — likely tied to population, historical disaster frequency, or geographic risk factors. If actual costs exceed the block grant, the state absorbs the difference. There is no mechanism to scale up for catastrophic events, and the "timeline and federal cost share during any transition have yet to be defined."

For smaller states, this math is existential. Vermont's back-to-back flooding in 2023 and 2024 required years of federal recovery assistance that exceeded the state's fiscal capacity many times over. A block grant sized for "average" disasters would have left Vermont billions short. For nonprofits and local governments that currently receive FEMA sub-awards for debris removal, infrastructure repair, and community resilience — a block grant system would insert an additional layer of state bureaucracy between federal dollars and the organizations doing the work.

99% of Public Comments Support Keeping FEMA

The public comment record is striking. Of 11,708 comments submitted to the council, 99% supported maintaining FEMA in its current form or strengthening it. The near-unanimity of public opposition to the council's direction has not visibly altered the draft recommendations.

This disconnect between public input and policy direction matters for grant seekers because it signals that the traditional channels of influence — public comment periods, stakeholder meetings, congressional testimony — may not be sufficient to preserve existing programs. Organizations that depend on FEMA funding need to prepare for a world where the programs they rely on may not exist in their current form, regardless of public sentiment.

What Grant Seekers Should Do Now

Map your FEMA funding exposure. If your organization receives or depends on any FEMA program — Public Assistance, Hazard Mitigation, BRIC, NSGP, EMPG, UASI, or any DHS preparedness grant — quantify what a 50% reduction or structural change would mean for your operations. Don't wait for the final report. The administration is already implementing changes informally through selective approvals, staffing cuts, and program modifications.

Engage your state emergency management agency. If block grants replace direct federal assistance, your state becomes the sole intermediary for disaster funding. The quality of your relationship with state emergency management — and your state's own fiscal capacity — will determine whether federal dollars reach your organization. States with existing emergency management reserves and established sub-award processes will adapt faster than those that have historically relied on FEMA as the primary funder.

Watch the BRIC program. The Building Resilient Infrastructure and Communities program was canceled, reinstated by court order, and reopened with $1 billion in funding — but with new restrictions including elimination of hazard mitigation planning funding and non-financial technical assistance. The BRIC saga is a preview of how other FEMA programs may evolve: nominally preserved but operationally constrained.

Diversify before you have to. The organizations best positioned to survive a FEMA restructuring are those that have already built revenue streams beyond federal disaster grants — state emergency management programs, foundation support, fee-for-service consulting, and insurance industry partnerships. If your organization's funding model assumes FEMA continuity, this is the moment to stress-test that assumption.

Submit a public comment. The public comment period on the final report is open until June 8, 2026. Comments can be submitted through the Federal Register. Whether or not comments change the council's recommendations, they create a formal record that courts, Congress, and future administrations will reference.

Hurricane Season Starts June 1

The timing is impossible to ignore. The FEMA Review Council votes on May 7. The public comment period ends June 8. Hurricane season begins June 1. FEMA's Disaster Relief Fund is already in Immediate Needs Funding mode. And roughly 10,000 FEMA employees drawing salaries from that fund — with monthly payroll costs between $300 and $400 million — continue to drain reserves that the agency needs for actual disaster response.

If a major hurricane hits the Gulf Coast in June or July, the federal government will respond with an agency that has been running on fumes for months, that has lost hundreds of employees, and that may be weeks away from a formal vote to cut its workforce in half. The question is not whether FEMA will still exist. The question is whether what remains will have the capacity to do what communities need it to do.

Tools like Granted can help you identify alternative disaster preparedness and resilience funding sources while the federal landscape shifts — because waiting for Washington to decide FEMA's future is a strategy only if you can afford to wait.