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May 28, 2011

FEMA says disaster fund running low

By Thomas Frank
USA Today

The federal government could run out of money to help communities such as Joplin, Mo., rebuild from devastating tornadoes and flooding.

The Federal Emergency Management Agency has $2.4 billion in its Disaster Relief Fund to last through Sept. 30 and is seeking $1.8 billion for the fiscal year beginning Oct. 1. Lawmakers from both parties say those sums are not enough to pay for the billions in damage caused by the extraordinary string of weather disasters.

"FEMA will have to stop recovery efforts in 50 states in the spring of 2012" without additional money, Sen. Mary Landrieu, D-La., wrote in a letter to her colleagues. She heads the Senate panel that oversees FEMA finances.

The administration acknowledged Thursday that FEMA could run out of disaster-relief money. "That will depend on the summer storm season and other factors," said Meg Reilly, spokeswoman for the Office of Management and Budget.

FEMA Chief Financial Officer Norm Dong said the $2.4 billion will pay for "lifesaving and life-sustaining efforts" in heavily damaged areas by helping people get food, shelter and clothing.

Beyond offering immediate assistance, FEMA is vital to disaster recovery because it pays at least 75% of long-term projects, such as rebuilding schools, hospitals and roads. Dong did not say whether FEMA will have enough cash to pay for those projects.

If the disaster fund dips below $1 billion, the agency will stop approving rebuilding projects until the fund is replenished, FEMA Administrator Craig Fugate told a House hearing in April.

"For communities to feel good about themselves, they have to know help is on the way," said Pat Hall, Iowa's disaster-recovery coordinator. "It's not the first 60 days after a disaster. It's when you see that first building go up, when you see that bridge replaced, when you see debris gone that you know recovery is happening."

Last year, Iowa had to delay $340 million in rebuilding projects from disasters that occurred in 2008 and 2010 because FEMA's disaster fund ran low. Hall said people in Joplin should be "very worried" about FEMA's funding level.

On Wednesday, the Republican-controlled House Appropriations Committee proposed doubling the disaster fund next year to $3.65 billion.

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FEMA's $1.8 billion request was based on average annual disaster costs in recent years, excluding major events such as Hurricane Katrina.