Analysts concerned by reports of Trump plan to cut natural disaster program

Reports that President Donald Trump plans to cut 84% of the staff from one of the two major federal programs providing natural disaster aid concern analysts.

Previously, Trump suggested he would probably recommend dismantling the other main agency overseeing disaster aid, the Federal Emergency Management Agency.

The Trump administration plans to reduce staffing at the Office of Community Planning and Development, which is part of the Department of Housing and Urban Development, and oversees the Community Development Block Grant — Disaster Recovery program, according to the New York Times story.. CDBG and FEMA money are the two main sources of federal aid in the aftermath of natural disasters.

“This has all the ingredients of a major political catastrophe for the Trump administration,” said David Victor, professor of innovation and public policy at University of California at San Diego. “When the first disasters hit this will become the central narrative of the story. Disasters made worse by the lack of a coherent disaster strategy.”

Matt Fabian, partner at Municipal Market Analytics, said, “With changes like these, you have to assume post-disaster grant dispersal will be slower and more prone to errors.”

“S&P Global Ratings sees programs that aid in disaster recovery as generally being credit supportive,” S&P said in a statement. “Any change in federal response programs could have longer term credit implications but to what extent is unclear and will depend on the details in final plans.”

“Such significant staff reductions to this program will likely slow down the delivery of post-disaster recovery resources that are desperately needed by communities impacted by recent disasters, extending their recovery and rebuilding timelines,” said Amy Bailey, director of climate resilience and sustainability at the Center for Climate and Energy Solutions. “If we are seeking government efficiency, we should protect staff capacity and Congress could permanently authorize and fund the CDBG-DR program with resilience requirements.”

Victor added, “depending on when and how the disasters strike, this could be like the catastrophe for George W. Bush’s reputation after the mishandling of the Katrina and Rita recovery in New Orleans.”

Federal aid is already disbursed slowly after natural disasters. For example, nearly two-thirds of the hurricane recovery aid promised in the aftermath of two powerful 2017 Puerto Rico hurricanes had not yet been disbursed as of the start of fiscal 2025, according to data from the Puerto Rico Oversight Board. Of the roughly $49 billion in aid to be disbursed, about 33.7% is expected to come from CDBG grants.

Federal grants for Puerto Rico’s hurricane recovery are planned to continue through fiscal 2035.

The Department of Government Efficiency under Elon Musk is planning to make the staff cuts to the CDBG program, the Times story said.

The White House press office didn’t immediately respond to a request for a comment on its plans for CDBG and its staffing.

Trump said, “I think we’re going to recommend FEMA go away and we pay directly, pay a percentage to the state.” He said state governments would be more adept at responding to natural disasters than FEMA has been.

North Carolina Gov. Josh Stein said Thursday he was requesting an additional $19 billion in federal funding for recovery and rebuilding from this past season’s Hurricane Helene. The federal government has already appropriated or allocated $3.17 billion to North Carolina. The state wants an additional $25.3 billion.

Of $11.6 billion in North Carolina aid requested needing Congressional approval, $4 billion would be CDBG program aid, the governor said.

“Hurricane Helene destroyed so much across western North Carolina — lives, homes, businesses, farms and infrastructure— and our state is facing nearly $60 billion in damages,” Stein said. “Despite a focused response from federal, state, local, private sector and nonprofit partners in the immediate aftermath, five months later, it is clear that much more help is needed to restore and rebuild western North Carolina.”