Trump Council Proposes Sweeping FEMA Overhaul, Shifts Disaster Costs to States

If the FEMA Review Council’s overhaul is adopted, more disaster costs would shift from Washington to state, local, tribal and territorial governments, and some events may no longer qualify for full federal help. The council approved its final report on May 7, 2026, and the proposal would replace FEMA’s current reimbursement model with upfront payments, while also making it harder for disasters to clear the threshold for federal aid.

Under the current system, FEMA reimburses states and others after recovery work is completed, with a minimum 75% cost share. The council wants that replaced with money sent within 30 days of a disaster, followed by a possible second payment if costs far exceed initial estimates. It also wants to scrap FEMA’s per-capita disaster-declaration formula in favor of a “parametric threshold,” using predefined metrics to decide when the federal government steps in. The report says that change could reduce the number of disasters the federal government supports.

The 12-member council, created by President Donald Trump through Executive Order 14180 on January 24, 2025, is co-chaired by Homeland Security Secretary Markwayne Mullin and Defense Secretary Pete Hegseth. Nearly 6,000 people watched the meeting virtually as members approved a report that also recommends reviewing FEMA staffing, shifting more responsibility to state, local and tribal authorities, and privatizing flood insurance. “These recommendations are all about accelerating federal dollars, streamlining the process, making it less bureaucratic so that Americans can get the help they need on the worst day of their lives,” former Virginia Gov. Glenn Youngkin said.

Homeland Security Secretary Markwayne Mullin said the report offered him “a clear direction and an oversight of an agency that is in need of reform, but is still mission capable.” Former Mississippi Gov. Phil Bryant said, “Many in America do not believe FEMA was doing the job that it was intended to complete.” The council’s recommendations now go to Trump, but many would require congressional action before they could take effect.

The timing adds pressure to an agency already dealing with funding shortages and staffing shortages, even as storms, floods and wildfires keep driving up recovery bills. Climate groups said the proposal does not match the reality of more frequent and severe weather. Environmental Defense Fund associate vice president Will McDow said the recommendations ignore that reality, while Climate Power senior advisor Mia Logan warned the changes would shift recovery costs onto states that cannot afford them, leaving families to foot the bill.