Is FEMA solvent? Depends who you ask
Presented by
The nation's top emergency response agency has repeatedly warned that it will run out of money to respond to natural disasters by August.
So some emergency managers found it jarring when White House budget chief Russ Vought insisted that the federal disaster fund is 'flush' through September, writes Thomas Frank. They began asking: Is Vought misinformed — or is the administration planning to keep the money pot full by slashing aid to states as the Atlantic hurricane season revs up?
President Donald Trump has long promised to reduce the Federal Emergency Management Agency's aid to states, putting pressure on governors to handle ballooning disaster costs as climate change intensifies storms, floods and wildfires.
A spokesperson for the Office of Management and Budget declined to address Tom's questions about the contradiction between FEMA's assessments and remarks that Vought made in the Oval Office on June 10.
'We're in a very good place,' Vought said at the time, standing behind Trump. The budget chief added that the disaster fund had $13 billion, and that other federal disaster accounts 'are funded, they're flush.'
In an email, Rachel Cauley affirmed Vought's statement that the disaster fund 'is fully funded.'
In contrast, FEMA projected in its June 3 monthly report that the fund's balance would drop to $2.8 billion in July and enter a deficit by August that would reach $7.8 billion in September.
Vought could be 'clueless,' said former Biden-era FEMA chief of staff Michael Coen. He warned that if the White House believes the agency has adequate funding to get the country through hurricane season — which lasts from June 1 through Nov. 30 — then it won't request supplemental funding from Congress.
If there's no supplemental funding to replenish the disaster pot, FEMA will be forced to halt longer-term recovery efforts to shore up cash for emergency expenses, such as search and rescue operations. FEMA is actively supporting 81 major disasters and eight emergency declarations.
'FEMA is going to have to stop funding recovery projects — fires in Maui, fires in California, the current recovery that just started in St. Louis,' Coen told Tom.
Such a move is not without precedent, Tom writes. Since 2003, the agency has cut off funding for long-term recovery projects 10 times when its disaster fund dropped too low (roughly $3 billion).
The disaster fund has faced chronic shortages in recent years due largely to Trump's decision in the 2020 pandemic to give every state disaster aid for virus-related costs. The move was widely supported at the time, but states claimed costs that exceeded projections by tens of billions of dollars.
It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.
Today in POLITICO Energy's podcast: Zack Colman breaks down how energy-related agencies are struggling to function amid administrative budget cuts, work stoppages and general uncertainty.
Power Centers
Senate megabill text won't save solar creditsDespite weeks of saying they would go easy on President Joe Biden's clean energy tax cuts, senators' tax portion of the Republican megabill — released Monday evening — would do little to protect incentives for wind, solar and hydrogen power, write Kelsey Brugger and Andres Picon.
The new text is, however, friendly to geothermal, nuclear and hydropower.
Trump's firing of nuclear regulator raises eyebrowsTrump's abrupt firing Friday of Nuclear Regulatory Commissioner Christopher Hanson marks another move by the White House to gain control of the independent agency as it heads into a critical review of safety regulations governing a lineup of new reactors, writes Peter Behr.
Democrats in the House and Senate condemned Trump's action, saying it violated the specific terms of the 1946 Atomic Energy Act that established the nation's civilian nuclear energy program. The legislation, reaffirmed in 1954, says that a commissioner may be removed for 'inefficiency, neglect of duty, or malfeasance in office.'
Trump's quiet truce on California waterTrump promised to break California's water rules wide open. So far, he's mostly working within them, writes Camille von Kaenel.
Five months after Trump issued a pair of directives for federal agencies to overturn state and Biden-era rules limiting water deliveries, the federal government has done no such thing. Instead, it's quietly increasing water flows, following the very rules Trump once railed against — at least for now.
In Other News
Inside the 'Big Beautiful Bill": Trump wants your EV rebate — and your heat pump, too.
Hurricane season comes to life: Erick is set to strike Mexico as a hurricane this week.
Subscriber Zone
A showcase of some of our best subscriber content.
The Trump administration green-lit a plan for an Arizona mine that could create a crater deeper than the height of the Eiffel Tower on ground that some Native Americans consider sacred.
A project to address extreme heat in California prisons has been stopped after its EPA grant was canceled last month.
Trump nominated Katherine Scarlett to lead the White House Council on Environmental Quality, where she will oversee efforts to hasten permitting for energy infrastructure, data centers and other public works projects.
That's it for today, folks! Thanks for reading.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
3 hours ago
- The Hill
Trump rails against green tax credits in big, beautiful bill
President Trump railed against the green energy tax credits included in his big, beautiful bill in a Truth Social post on Saturday. 'I HATE 'GREEN TAX CREDITS' IN THE GREAT, BIG, BEAUTIFUL BILL. They are largely a giant SCAM,' Trump posted. His comments come amid a GOP internal debate over the big, beautiful bill on how to roll back former President Biden's green energy tax credits. The Senate is taking a more lenient approach on this topic, while the House voted to 'sledgehammer' the tax credits. This is another point of disagreement that could slow the leadership's ability to meet the July 4 deadline to pass the bill in the Senate. Trump continued by saying he would rather the money be used anywhere else and that 'Windmills, and the rest of this 'JUNK,' are the most expensive and inefficient energy in the world, is destroying the beauty of the environment, and is 10 times more costly than any other energy.' 'None of it works without massive government subsidy (energy should NOT NEED SUBSIDY!). Also, it is almost exclusively made in China!!! It is time to break away, finally, from this craziness!!!' he continued. In August 2022, the Democrat-controlled House passed the Inflation Reduction Act (IRA), which included $369 billion for energy security and climate investments. This move underlined the need for domestic, clean energy manufacturing and decreasing greenhouse gas emissions. The Senate is debating how to decrease these investments. The text now allows the construction of clean energy infrastructure, such as solar panels and wind farms, to begin this year to receive the full credit amount. Before, when the bill was in the House, it demanded that those projects start only 60 days after the bill passed, essentially leaving no time for new clean energy investments. The Senate is also allowing projects that begin construction in 2026 to receive 60 percent of the credit, in 2027 to receive 20 percent and in 2028 to receive no credits at all. The House version would give no credits at all to projects that did not start producing electricity by 2028. The Senate is still slashing Biden's IRA significantly. Before the bill's passage in the House, some moderate Republicans issued a joint statement claiming that sledgehammering the IRA would 'provoke an energy crisis or cause higher energy bills for working families.' Nevertheless, the bill still moved up to the Senate.
Forbes
5 hours ago
- Forbes
How The Big Beautiful Bill Will Handicap Clean Energy
The Capitol Building, home of the United State Congress. Green Technologies At Risk In Current Mega Bill As it was written, the Big, Beautiful Bill (Mega Bill) passed by The House of Representatives in May would handicap certain green projects (solar, wind, and batteries) that are in line to receive tax credits made available by the Biden government. The handicap is hard to understand because in the U.S. over 90% of new energy projects in 2023 and 2024 was generated by solar, wind, and batteries. What is the handicap? The Mega Bill mandates that such projects must begin within two months of passage of the bill, and would have to be completed, and in service, by the last day of 2028, or the tax credits would be canceled. To see what impact this would have on green projects, one analysis looked at clean electrical projects that are currently in the interconnection queue, and due to go online during 2028 or later (it wouldn't be uncommon for projects slated to complete in 2028 to spill over to 2029, which would cancel the tax credits.) The total for all these at-risk projects in Figure 1 amounts to 600 GW (gigawatts). The largest three projects are CAISO of California at 183 GW, ERCOT of Texas at 128 GW, and MISO (Midwest and South) at 111 GW. Figure 1. The truth is, current electrical production in U.S. is 1200 GW, and this will need to grow rapidly to power new AI data centers. So, if all these seven green projects lost their tax credits and dropped out of the interconnection queue, it would represent a huge loss that is 50% of current electrical production in the U.S. This loss would be like tossing away 600 traditional power plants that added up to 50% of current U.S. electricity supply. Granted, a number of projects in Figure 1 would drop out of the queue anyway, due to other factors such as financial commitments that fall through. But still, a loss of remaining projects that would stand to boost current U.S. power by 30% or 40% or 50% would be an unforgiveable loss—especially since solar, wind and battery projects have all the market momentum in the past few years. Speaking of momentum, in 2023 and 2024 in the U.S., the vast majority (93%--94%) of new energy sources were solar, wind, and batteries. The only commercially proven competitor is gas-fired power plants, which are facing serious delays, and they cost more. What if projects that lost their tax credits were to go ahead to completion? They might, but it's obvious this would translate to higher cost of electricity for consumers. Mega Bill Changes Suggested By Senate. The House Mega Bill has gone to the Senate, and on Monday June 16 they have proposed some changes. UtilityDive reports that the harsh 'start by – complete by' House requirement to access the tax credits has been removed. In one box, nuclear, geothermal and hydropower can claim the tax credits so long as they start construction by 2033. But in another box, wind and solar can obtain only 60% of the tax credits and only if they break ground by 2026. Or 20% if by 2027. Or zero if after that. This is a serious handicap for the frontrunners, solar and wind, that have provided over 93% of new electrical capacity in 2023 and 2024. And it comes at a crucial time, because the U.S. needs to quickly boost its power capability by a massive amount to supply AI data centers. One positive: battery storage or BESS (battery energy storage systems) can access tax credits until 2036, although the credits will be tapered down, according to Canary Media. Also, some solar and wind projects would be able to keep the tax credits beyond the end of 2028—provided they exist on federal land, generate 1 GW or more power, and have obtained right-of-way approval from the BLM (Bureau of Land Management). The next steps are: the Senate as a whole has to pass these changes, and then attempt to reconcile with the House. The timeline is short as the goal is to get the final version of the Mega Bill to President Trump's desk by July 4. Coming out of all the discussion and debate, it seems the Mega Bill wants to handicap wind and solar and batteries. But why? Reasons Why The Mega Bill Would Handicap Wind And Solar Energy. First, the Bill will cause electricity prices to rise. If cheap wind, solar and batteries are handicapped in preference to expensive almost-defunct coal power plants, commercially unproven SMRs (small modular nuclear reactors), and next-gen geothermal methods, then prices of electricity will rise. Table 1 lays this out, using the most recent LCOE data from Lazard. Table 1. Most recent LCOE estimates for various electrical sources. With tax credits and based on a utility scale, solar PV + BESS and wind + BESS are cheaper than geothermal with tax credits, and much cheaper than gas-fired power, nuclear, and coal. If the Mega Bill handicaps wind and solar in the race, electrical costs will zoom upwards. Second, the Bill seems to be unaware of green energy success in Australia. In the state of South Australia renewables plus batteries have been providing 72% of grid electricity continuously for three years, and this is expected to rise to 100% by 2027. Solar, wind, and batteries have proven the stability and reliability of renewables commercially. The first grid-scale BESS was started in 2017 by Elon Musk in South Australia, and BESS are expanding rapidly in the U.S. as well as in Australia. Intermittent power is no longer a reason to dismiss renewables, despite what the Energy Secretary says, because BESS have solved this problem and electricity from solar and wind renewables with BESS is dispatchable. Third, the Bill assumes new investments in old energy (coal, natural gas, and nuclear) will be embraced by the U.S. population. However, global spending on low-carbon power has doubled in the past five years. Solar PV is the leader in this space, with investments that will reach $450 billion in 2025. Coal is too dirty when it burns, and in the U.S. the market share has dropped from 50% in 2011 to 11% in 2024. Natural gas burns cleaner than coal, but the market for new gas-fired power plants has dropped out in the past two years, due to cost and delays in permitting and supply chains. The cost of new nuclear reactors, whether traditional reactors or SMRs, is substantially higher than renewable energies (Table 1). There is also the ubiquitous threat of being exposed to nuclear radiation, either from nuclear accidents or from underground storage of nuclear waste. It has been reported that U.S. nuclear reactors that were decommissioned some time ago can be recommissioned, but at a heavy cost of around $1 billion per unit. Fourth, the Bill enables China to forge ahead with a green energy economy, while the U.S. goes backward. Energy from solar, wind, and batteries is cheap, and has a short new-build time. It will continue to provide jobs and grow the economy, and benefits include lower electricity prices and less pollution. A key advantage is already-commercialized power for data centers that will enable the U.S. to compete with China in the race for AI. The handicap and setbacks of a thriving clean industry in the U.S. would be China's gain. Fifth, the Bill will force job losses by handicapping green industries. If projects in the above list of seven in Figure 1 were to be canceled due to the Mega Bill handicaps, there could be serious job losses. To illustrate by results in 2024, one report quotes $80 billion invested in clean power in 2024, which supported 1.4 million jobs in the U.S. Another answer is that current tax credits would enable strong economic growth by 2035: almost $2 trillion of monetary growth and almost 14 million jobs. This amounts to a return on the federal investment by four-times. The green energy benefits and financial returns of wind and solar with battery storage apply to both Republican and Democratic states in the U.S.. But so do the losses, if Congress decides to handicap wind and solar renewables. The biggest losses may be soaring electricity costs in the U.S., and the U.S. bending to China's clean energy boom of surging solar and BESS projects that will reliably service their AI data center programs.
Yahoo
7 hours ago
- Yahoo
Live updates: White House leaves room for more Iran talks; US airlines scale back Mideast flights
President Trump will make a decision on getting directly involved in Iran within two weeks, leaving the door open for negotiations press secretary Karoline Leavitt said Thursday at a briefing. Earlier in the day, Trump pushed back on reports he had given a green light to an Iran attack plan. 'The Wall Street Journal has No Idea what my thoughts are concerning Iran!' Trump posted on Truth Social, referencing a late Wednesday story that indicated he had approved plans. Israeli Prime Minister Benjamin Netanyahu said Iran would pay for targeting a civilian area of southern Israel on Thursday, with a missile hitting a hospital in Beersheba. No serious injuries were caused by the strike, but there was 'extensive' damage. Israel 'will exact the full price from the tyrants in Tehran,' Netanyahu wrote on social platform X. Israeli Defense Minister Israel Katz said Iran's Supreme Leader Ayatollah Ali Khamenei 'absolutely should not continue to exist.' Trump has met with his top advisers this week as he considers whether to bring the U.S. more fully into the fight. In the U.S., Thursday is a federal holiday marking Juneteenth. Former President Biden, who designated the day on the federal calendar, is expected to join in the celebrations in Galveston, Texas, later in the day. Worth reading: Thune aggressively woos GOP Medicaid holdouts on Trump bill Minnesota shootings highlight danger of political tensions at state, local levels Democrats, GOP clash over NYC mayoral candidate's arrest Follow along today for updates. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
