WASHINGTON, D.C. — The Federal Emergency Management Agency has entered Imminent Needs Funding after its Disaster Relief Fund dropped below $3 billion during the partial government shutdown. The designation requires the agency to limit spending to immediate emergency response, direct aid to survivors and critical infrastructure protection, while delaying many reimbursements and longer-term recovery projects.

Imminent Needs Funding is triggered when the Disaster Relief Fund falls below $3 billion. FEMA has used the mechanism nine times over the past two decades, but entering it during an active government funding lapse is unprecedented for the agency.

Roughly 10,000 FEMA staff, including permanent employees and Stafford Act disaster-response personnel, are paid from the Disaster Relief Fund during the shutdown. Payroll costs for those staff run between $300 million and $400 million per month, according to congressional and agency budget estimates.

Before formally entering Imminent Needs Funding, officials began slowing or selectively approving reimbursements tied to past disasters, including billions in outstanding pandemic-related aid. Victoria Barton, FEMA Associate Administrator, described the impact on those payments. "A lot of those reimbursements are for rural hospitals, but now that we're in immediate needs funding, those payments are going to be paused," she said. Officials also acknowledge that a fully depleted Disaster Relief Fund could halt recovery payments and affect staffing funded through the account. The response system could become overwhelmed if multiple disasters occurred or a major hurricane struck, officials said.

Hurricane season begins June 1. FEMA has scaled back coordination with state and local partners and missed key preparedness events ahead of the season, including the National Hurricane Conference and the National Emergency Management Association Midyear Forum. Training programs for emergency managers and first responders have been curtailed due to the shutdown, affecting tens of thousands of participants each week.

"Disasters are unpredictable. They're very costly. We don't know what could happen between now and June 1," Barton said. She added, "We really need to think about funding the entire organization so that we can properly serve the American people."

Under federal law, FEMA typically reimburses at least 75% of eligible disaster costs for state and local governments, including debris removal, emergency response and infrastructure repair, with the federal share rising after catastrophic events. Major disasters routinely cause tens or hundreds of billions of dollars in damage, with Hurricane Katrina causing about $160 billion and Hurricane Harvey about $125 billion.