FEMA’s workforce is being cut. The primary federal mitigation grant has been canceled. State disaster reimbursements have been frozen. The agency review council’s report was gutted before the vote was canceled. Congress is negotiating wartime supplementals. And the national debt just hit levels not seen since World War II.
Each of these generates its own headline, its own analysis, its own round of commentary. Tracked separately, they look like a collection of policy disputes and budget fights.
Tracked together, the signal is harder to miss. The federal government is cutting the safety net and shaking the tightrope at the same time: pulling back from emergency management grants, coordination, and workforce while pursuing actions that actively increase the threats state and local systems have to manage.
The policy argument behind this shift has theoretical merit. States are closer to the problems their communities face. Local leaders carry institutional knowledge that federal administrators rarely develop. Reducing bureaucratic complexity between a disaster and the people affected by it is a defensible goal.
But that argument describes devolution, and devolution means capacity follows responsibility. Additional funding, authority, and coordination resources move with the additional burden. When the burden shifts but the capacity to carry it doesn’t, that’s not devolution.
It’s abandonment with a policy justification.
What the numbers actually look like
The scale of the shift is worth pausing on. DHS revoked FEMA’s authority to renew contracts without Homeland Security approval and instructed the agency to let existing contracts lapse, effectively eliminating the CORE workforce that makes up roughly 40% of FEMA’s total staffing.
The Building Resilient Infrastructure and Communities program, the primary federal grant for pre-disaster mitigation, was canceled in April 2025. Emergency Management Performance Grants, the baseline federal funding that keeps state and local emergency management running, have been frozen. Eleven billion dollars in disaster reimbursements owed to 45 states sits in limbo with no public timeline for release.
These aren’t proposals. They’re accomplished facts.
The FEMA Review Council was supposed to deliver its report last December. The original draft ran to more than 160 pages and reportedly recommended restoring FEMA to cabinet-level status. DHS leadership reduced it to 20 pages before canceling the vote entirely. The council has been extended through March 25, 2026.
Whatever that final report recommends, the dismantlement it was meant to evaluate has already been underway for months.
Where the burden is landing
Earlier analysis in this series examined how emergency management lost its coordination mission under the weight of disaster relief operations, transforming from a coordination function into a massive humanitarian logistics operation. The agency that emerged from that transformation, already diminished in its core function, is now being hollowed out further.
The question is no longer whether FEMA can reclaim its coordination role. It’s who absorbs the burden when federal capacity can no longer carry its share.
The Argonne National Laboratory’s 2025 study of emergency management structures provides the clearest picture of what state and local agencies are actually working with. State emergency management budgets have a median of just $6.3 million. Federal funding makes up anywhere from zero to 99.4% of state emergency management budgets. At the local level, more than half of all emergency management agencies have one or fewer permanent full-time employees.
The Urban Institute confirmed what those numbers suggest: many states at high disaster risk don’t have the fiscal capacity to absorb a greater share of disaster recovery costs without structural changes to how they budget.
Those structural changes haven’t been made.
The legal authorities and coordination structures don’t disappear when federal capacity withdraws. EMACs, interstate compacts, NIMS, state emergency statutes: they all still exist. But they were designed to function as one layer in a multi-tier system, not as the whole thing. When the federal tier pulls back, the cost, responsibility, and coordination burden compresses downward onto state and local systems that weren’t sized, funded, or structured to carry it alone.
That compression doesn’t just strain resources. It creates and exposes vulnerabilities. A state emergency management agency running on a $6.3 million budget can coordinate within its borders. It wasn’t built to absorb the coordination role for incidents that cross state lines, cascade across sectors, or exceed its fiscal capacity to respond without federal reimbursement that may not come.
Hospital mass casualty plans, port authority supply chain models, state emergency operations center protocols: all built to function within a system that includes a federal tier. That tier is being hollowed out, and the burden is landing on the levels least equipped to absorb it.
The squeeze from both directions
The fiscal picture makes restoration hard to imagine anytime soon. Congress is negotiating emergency supplemental defense spending for Iran operations on top of $153.3 billion in defense funding approved through last year’s reconciliation package. U.S. government debt hit 122.3% of GDP at the end of 2025, the most constrained fiscal position entering a military conflict in modern American history.
When a nation enters sustained military engagement carrying that load, the money has to come from somewhere. Emergency management grants, disaster coordination capacity, and pre-disaster mitigation funding (already cut, politically difficult to defend, and ideologically targeted) are the reachable offset.
But the fiscal squeeze is only half the picture. The same federal actions that are diverting resources away from domestic emergency management are also increasing the threats that state and local systems need to manage. Military conflict raises the risk of retaliatory cyber operations against critical infrastructure, supply chain disruptions, energy price shocks, and domestic targeting. The threat environment is expanding at the same time the capacity to address it is contracting. State and local budgets aren’t growing to match either side of that equation.
NATO’s own baseline requirements recognize that military effectiveness depends on resilient civil infrastructure, logistics, and governance. The current trajectory undermines both sides of that equation at the same time.
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The question that needs an answer now
Every one of those organizations, the state agencies, the hospitals, the port authorities, built its resilience architecture around an assumption that is no longer reliable. Most haven’t adjusted yet.
Senior leaders waiting for clarity from Washington before revisiting their plans are using the wrong planning assumption. That clarity isn’t coming before the next hurricane season, the next major cyber incident, or the next cascading infrastructure failure. The question of who absorbs the additional burden, with what authority and what resources, needs an answer at the organizational level now.
Not because devolution is wrong in principle. But because the capacity to match the additional burden hasn’t followed.
And waiting for it is not a resilience strategy.
Every organization with a continuity plan that assumes federal resources at current levels should be asking one question this quarter: if the grants stay frozen, the reimbursements stay delayed, and the workforce stays cut, what is the plan?
If the honest answer is that there isn’t one, the time to build it is before the assumption gets tested.
Governance gaps don’t wait for policy clarity. Crisis Lab helps senior professionals build the cross-sector thinking that modern threats demand, through applied learning, strategic analysis, and practitioner-led research. The Forum at Crisis Lab brings together senior leaders from emergency management, national security, business continuity, and governance for the kind of ongoing peer exchange and cross-sector dialogue these challenges require. Learn more at crisislab.io.