Trump Cuts FEMA: Layoffs, Withheld Payments, and Court Blocks

Since taking office in January 2025, President Donald Trump has moved to shrink the Federal Emergency Management Agency through a combination of layoffs, canceled grants, withheld disaster payments, and stricter rules for approving state aid requests. The Trump FEMA cuts have eliminated roughly $3 billion in pre-disaster mitigation funding, frozen billions more in reimbursements owed to states, and driven more than 2,000 employees out of the agency. Courts have blocked some of the most sweeping actions; others remain in force. Here is what has changed and what it means for the money, projects, and disaster help that flow through FEMA.

Grants Canceled or Cut

The biggest single cancellation was the Building Resilient Infrastructure and Communities program. In April 2025, the administration terminated BRIC, FEMA’s primary pre-disaster mitigation grant program, returning roughly $3 billion in undisbursed funds and canceling all grant applications from fiscal years 2020 through 2023. Around the same time, FEMA stopped approving new allocations under the Hazard Mitigation Grant Program, and the Flood Mitigation Assistance program went inactive for 2025.¹

The fiscal year 2026 budget proposed a $646 million cut to FEMA grant programs overall.² Specific reductions included:

State Homeland Security Grant Program cut from $468 million to $351 million, with a new 75 percent cost-matching requirement.²
Urban Area Security Initiative cut from $553.5 million to $415.5 million.³
Zeroed out: the Regional Catastrophic Preparedness program, Emergency Food and Shelter program, National Domestic Preparedness Consortium, Continuing Training Grants, and the Next Generation Warning System.²

An early 2025 executive order also canceled an AmeriCorps program that trained and deployed young people for disaster response.⁴

Delayed and Withheld Disaster Payments

Grants aren’t the only money that has slowed. A government report dated September 15, 2025, showed FEMA had withheld $10.9 billion in pandemic-related reimbursements owed to 45 states in the final two months of the fiscal year. Roughly a third of that was owed to New York and California; Maryland, Georgia, Florida, and Pennsylvania were each owed between $500 million and $800 million. FEMA said the reimbursements had been shifted to fiscal year 2026 but gave no timeline, leaving what one description called an “$11 billion IOU” that could cut the agency’s disaster fund balance by nearly half.⁵

DHS Secretary Kristi Noem added a second bottleneck by requiring her office to personally approve all FEMA expenditures over $100,000. NBC News reported the policy delayed at least 1,000 contracts, grants, or reimbursements by September 2025.⁶ By April 2026, a backlog of nearly $10 billion in disaster payments to states remained, covering everything from wildfire resilience projects to reimbursements for repair work already completed by local governments.⁷

Workforce Reductions

More than 2,000 employees left FEMA over the course of 2025, including two dozen senior leaders. In late December 2025, internal FEMA emails revealed a “Workforce Capacity Planning Exercise” contemplating a 50 percent cut to the agency’s roughly 23,000-person workforce, including a 41 percent reduction to disaster-specific staff. The plan targeted the Cadre of On-Call Response/Recovery Employees, or CORE staff, who made up about 39 percent of the workforce and were often the first responders sent to disaster sites.⁸

Starting December 31, 2025, CORE employees began receiving notices that their multiyear contracts would not be renewed. By January 2026, between 900 and 1,000 employees faced imminent contract expirations, and some were terminated while still deployed to active hurricane relief operations.⁹ Thirteen House Democrats wrote to the White House alleging the cuts violated a post-Katrina law barring reductions that “significantly hamper” FEMA’s disaster response.¹⁰ The American Federation of Government Employees sued in *AFGE v. Trump* seeking a preliminary injunction.¹¹ FEMA paused the blanket nonrenewals on January 22, 2026, citing a winter storm response, but has not formally abandoned the broader reduction plan.

Uneven Approval of State Disaster Requests

The administration has also been more selective in approving states’ disaster declaration requests. An E&E News analysis of 2,500 declarations found the widest partisan gap in federal disaster aid since FEMA was created in 1979: 23 percent approval for requests from states with a Democratic governor and two Democratic senators, versus 89 percent from states led entirely by Republicans. Average processing time was 80 days for Democratic-led states and 39 days for Republican-led ones.¹²

Every president since Ronald Reagan had approved at least 67 percent of requests from Democratic-led states; Trump himself approved 93 percent during his first term. Eight of the ten denials to Democratic-led states came after FEMA had documented that the damage met the financial threshold for federal aid, blocking roughly $250 million in assistance. Denials included $34 million in storm damage for Washington, two Illinois requests totaling more than $120 million in residential damage, and $41 million in Colorado weather-related aid.¹² Aid was also denied for Arkansas tornadoes, West Virginia flooding, and Washington windstorms, and extended relief for Hurricane Helene impacts in North Carolina was terminated.¹³

The White House and DHS have denied politicization, describing the process as a “thorough review” rather than “rubber stamping” FEMA recommendations.¹² Presidential disaster declarations are discretionary under federal law, and a denial generally cannot be challenged in court.

Projects and Communities Affected

The freezes have translated into stalled work on the ground. In El Dorado County, California, a $25 million wildfire resilience project FEMA approved in 2023 for home retrofits and brush clearing has been stalled for more than a year, awaiting environmental review. In Plumas County, California, $2.5 million for clearing flammable vegetation around homes remains in limbo.⁷ Across the San Francisco Bay Area, more than $270 million in federal resilience and adaptation funding has disappeared since January 2025, and about $870 million in BRIC-funded hazard mitigation projects statewide are frozen, including $100 million earmarked for seismic resilience.¹

What the Courts Have Blocked

Federal courts have reversed some of the most aggressive moves. On July 16, 2025, a coalition of 20 states led by Washington Attorney General Nick Brown sued in Boston over the BRIC cancellation, arguing it violated Congress’s appropriation authority, the Administrative Procedure Act, and separation-of-powers principles.¹⁴ A federal judge issued an injunction on August 5, 2025, barring the administration from diverting BRIC funds.¹⁵

On December 11, 2025, the District of Massachusetts ruled on summary judgment that the BRIC termination was unlawful and ordered FEMA to reverse it. When the agency did not comply, the coalition, now 23 states, filed an enforcement motion in February 2026, which the court granted on March 6, 2026. The order requires FEMA to make pre-disaster mitigation funds available, communicate the status of existing projects to states, file compliance reports with the court, and issue a new fiscal year 2024 BRIC funding notice within 21 days.¹⁶ As of mid-2026, the litigation is active and compliance is under court-supervised monitoring.¹⁷

What Congress Is Doing

Resistance in Congress has been bipartisan but uneven. Republican Senators Shelley Moore Capito of West Virginia and Cindy Hyde-Smith of Mississippi questioned the restructuring at a May 2025 hearing, with Capito calling FEMA a “vital function” and warning the administration to “tread lightly” on shifting all responsibility to states.¹⁸

The main legislative counter is H.R. 4669, the Fixing Emergency Management for Americans Act, introduced July 24, 2025, by House Transportation and Infrastructure Committee Chairman Sam Graves (R-Mo.) and ranking Democrat Rick Larsen (D-Wash.). It would remove FEMA from DHS and re-establish it as an independent, cabinet-level agency reporting to the president, replace the reimbursement model with project-based grants, create a public tracking site for disaster funds, prohibit political discrimination in aid distribution, and task a recovery force with closing out more than 1,000 lingering disaster declarations dating back to Hurricane Katrina.¹⁹

Senator Peter Welch of Vermont has separately introduced legislation aimed at cutting FEMA red tape and giving local officials quicker access to funds, though he has reported difficulty finding Republican co-sponsors in the Senate.²⁰

Where the Overhaul Stands Now

The FEMA Review Council, established by executive order on January 24, 2025, submitted its 74-page final report on May 7, 2026.²¹²² It contains 150 action items built around the principle that “disaster response should be locally executed, state or tribally managed, and federally supported.” Key proposals include:

RAPID funding: replace FEMA’s reimbursement-based Public Assistance program with direct lump-sum payments triggered automatically by measurable events like wind speed or earthquake magnitude, with 50 percent of estimated needs paid within 30 days.²³
FAIR individual relief: consolidate existing individual assistance programs into a single direct payment, capping homeowner aid at $150,000.²³
Higher declaration thresholds: require states to show that a disaster has “broken the back of local and state government” before federal aid unlocks.²²
Flood insurance privatization: shift the National Flood Insurance Program toward primary reliance on the private market. Insurance experts have warned this could raise premiums for current policyholders, who benefit from an NFIP community discount averaging 15 percent, and “create a larger insurance gap than exists today.”²²²⁴

The council envisions a two-to-three-year implementation timeline, but most of the proposals would require new legislation or regulations. Trump initially spoke of eliminating FEMA outright; the final report instead proposes a “transformed agency” in a reduced, coordinating role.²³

Meanwhile, Trump fired DHS Secretary Kristi Noem in March 2026, and the Senate confirmed former Senator Markwayne Mullin of Oklahoma as her replacement on March 23, 2026.²⁵ On April 1, 2026, Mullin rescinded Noem’s $100,000 approval requirement. At the time, about $2.2 billion in recovery and mitigation funding was stuck in the DHS queue. Mullin has said FEMA has “a great mission” and has pledged to keep the agency “adequately staffed” after the 2,400-plus departures of 2025.⁶

As of mid-2026, implementation of the Review Council’s recommendations has not begun, most would require congressional action, and FEMA’s capacity to respond to the next major disaster remains significantly diminished from where it stood at the start of 2025.

1
SPUR. Financing Climate Adaptation and Hazard Mitigation
2
DHS. FEMA FY2026 Congressional Budget Justification
3
CNN. FEMA Proposes Cuts to Disaster and Security Grants
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NPR. FAQ: FEMA Elimination
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E&E News. FEMA Canceled $11B in Disaster Payments to States
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NBC News. DHS Under Markwayne Mullin: Approval for FEMA Aid and Disaster Response
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NPR. Delayed Funding for FEMA Hurricanes, Disasters, Wildfires, and Floods
8
Federal News Network. Concerns Mount Over FEMA Staff Reductions
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GovExec. Lawsuit Seeks To Stop FEMA Cutting Its Workforce in Half
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NPR. FEMA Cuts Jobs Under Trump
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Federal News Network. AFGE Seeks Emergency Order To Block Further FEMA Cuts
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15
Washington Attorney General. Judge Grants Injunction Against Trump’s Cuts to Disaster Funding
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Massachusetts Attorney General. AG Campbell Secures Court Order Requiring Trump Administration To Restore Billions in Disaster Mitigation Funding
18
Roll Call. Republican Senators Question Trump’s Plans To Change FEMA
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House Transportation and Infrastructure Committee. Fixing Emergency Management for Americans Act of 2025
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Senator Peter Welch. Congressional Democrats Say Trump FEMA Changes Hurt Disaster Response
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The White House. Council To Assess the Federal Emergency Management Agency
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The Guardian. Trump Council on FEMA Disaster Preparedness
23
Bipartisan Policy Center. FEMA Reform: Comparing the Review Council’s Recommendations and Congressional Proposals
24
MySuncoast. Proposed FEMA Overhaul Could End Federal Flood Insurance Program
25
Forum Together. Policy Bulletin, March 27, 2026