What Happens with FEMA During a Shutdown? 

FEMA
Written By SRP Partners

A view of the US Capitol building and its reflection on the Potomac River

Today marks the eighth day of the federal government’s shutdown with no clear signs of re-opening any time soon. When Congress shuts the federal government down, all non-essential services are suspended, but that doesn’t mean that the government stops working altogether; hundreds of thousands of federal employees, including active-duty service members and most FEMA staff, will continue to work and do so without pay.

For background, this 2024 brief does a nice job laying out FEMA’s traditional funding mechanisms, and how FEMA reacts when appropriations lapse or when the government is shut down. The mechanics behind FEMA, its workforce, functions, budget, and ability to transfer payments, are all complicated by nuance during a shutdown. Generally, FEMA’s field operations remain unaffected, however, obligations (read: payments) to state and local governments for infrastructure repairs will be delayed.  

FEMA Staff – Most Are “Excepted” or “Exempt” Employees

The vast majority of FEMA staff (84%) are considered either Excepted or Exempt.  Most are “Excepted,” because the work they do is “excepted work” as defined by the Anti-Deficiency Act. This Act (among other things) mandates all agencies pre-identify staff who are excepted from furloughs due to the emergency nature of the work they perform, like protection of life, safety, or property.

Exempt employees are salaried staff who are not eligible for overtime pay. The term exempt in this context applies to the provisions of the Fair Labor Standards Act, not whether someone can be furloughed. If their position is affected by a lapse in funding, then exempt employees can be furloughed. Very few FEMA staff fit in this category.

Many federal agencies are using carryover funds from last year’s budget to continue to pay some exempt employees and mitigate against furloughing (or firing) their key staff. These staff will be furloughed if/when the carryover funds from last year’s budget run out.  

Table showing total DHS employees and number of exempt/excepted employees

Unaffected - Active Disaster Operations

FEMA operations and Federal response partners charged with protecting life, safety, and property are exempt from a shutdown and will continue to work while Congress negotiates a budget. However, if the Disaster Relief Fund (DRF) is depleted, then supplemental appropriations would be necessary to avoid a noticeable impact on FEMA operations.

Unaffected - Joint Field Offices

During disaster operations, staff from FEMA and the impacted State work inside a shared facility referred to as a “Joint Field Office” (JFO). As of today, sixteen active JFOs are scattered throughout the United States, supporting response and recovery efforts from 63 major disasters and emergencies. These offices, and the staff within them, are generally unaffected.

Graphic displaying the FEMA daily operations briefing

Somewhat Affected - The Disaster Relief Fund

The Disaster Relief Fund (DRF) is the primary source of funding for FEMA’s four largest programs (Public Assistance, Individual Assistance, Hazard Mitigation, and Fire Management Assistance Grants). FEMA funds most federal disaster activities and some staff salaries through the DRF. Congress traditionally uses annual appropriations to fill the DRF and supplemental appropriations once it is depleted. Each year, FEMA pays roughly $50 billion from this revolving fund, and it is currently dangerously low.

One major problem plaguing the DRF is FEMA’s consistent underestimation of COVID recovery costs, which has created a moving target for Congress, as spending on COVID recovery consistently exceeds FEMA’s projections. In February, FEMA projected a DRF deficit of $14.6 billion by the end of FY 2025, which is basically where we are.

The current administration has found one way to eliminate a large portion of that deficit by shifting $11 billion to FY 2026. That’s an optical solution and won’t solve the actual problem, as Congress still must reconcile with the same $11 billion regardless of the fiscal Year it is assigned to.   

Table showing changes in the Disaster Relief Fund balance over time

Affected (Paused or Delayed)

FEMA’s annual appropriations are included in the overall Department of Homeland Security budget and any activities that are normally funded by FEMA's annual appropriation will pause until the government reopens. This includes:  

  • National Flood Insurance Program (NFIP): Any government shutdown has a significant impact on NFIP operations, including the ability for FEMA to issue new policies, increase or add coverage limits, or renew policies. Existing policies should remain unaffected, but any real estate transactions requiring flood insurance (like these) will be delayed.

  • FEMA’s Preparedness Grants

  • FEMA’s Mitigation Grants

  • Website Updates: Non-essential FEMA webpages will cease to be actively managed or updated during a shutdown, including public facing pages like Ready.gov.  This does not include DisasterAssistance.gov, which remains operational so that citizens can apply for assistance.

Other Federal Agencies

Transportation Security Administration: Most TSA employees are essential workers and will stay on the job.

Federal Aviation Administration: Currently there are 13,200 Air Traffic Controllers working without pay and there’s a “slight tick up” of controllers calling out sick. Airline travelers experiencing long delays or cancelled flights might be what forces Congress to hammer out a solution.

US Postal Service: Post Offices will stay open and mail delivery should continue, as usual.

Small Business Administration: SBA’s Disaster Loan Program, which works in conjunction with FEMA, will also continue to operate during the shutdown.

US Coast Guard: Emergency rescue operations are not affected.

National Oceanic and Atmospheric Administration (NOAA): Forecasting and analysis will continue with reduced capacity. 

Additional Reading:

SRP Partners
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