Examination of Federal Disaster Relief Under the Budget Control Act [February 10, 2012] [open pdf - 371KB]
"Concern over the size of the federal budget deficit and the national debt has brought congressional attention, as an ancillary issue, to both the amount of funding the federal government provides to states and localities for disaster assistance and the processes the federal government uses to provide that assistance. The amount of funding provided by Congress for declared emergencies and major disasters has grown considerably in the past decade, driven principally by the hurricane season of 2005. Although funds have been reallocated at times from one account to another to provide for disaster-related assistance, disaster relief funding has historically not been fully offset. Disaster relief funding has usually not been tightly constrained, either, with supplemental spending bills often funding these activities outside the allocations of discretionary budget authority and outlays associated with budget resolutions. Two potential methods for reducing the impact of disaster assistance spending on the federal budget are (1) the use of offsets and (2) placing controls on the level of allowable spending. Among its provisions, the Budget Control Act (P.L. 112-25, hereafter the BCA) provides a mechanism designed, arguably, to limit spending on major disasters declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, hereafter the Stafford Act), thereby limiting the impact of such spending on the budget deficit. This report reviews current disaster funding practices and examines potential issues presented to disaster funding under the BCA mechanism. The report also discusses how OMB [Office of Management and Budget] calculates the 'allowable adjustment' to discretionary spending caps for disaster relief pursuant to the BCA, and the potential policy implications that may result from that process."
CRS Report for Congress, R42352