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Updated April 26, 2019
Calculation and Use of the Disaster Relief Allowable Adjustment
The Budget Control Act (P.L. 112-25, hereinafter the BCA)
Figure 1. Disaster Relief Data and Calculation of the
established limits on federal spending, as well as
Allowable Adjustment for FY2018
mechanisms to adjust those limits to accommodate
(in billions of nominal dollars of budget authority)
spending that has special priority. One of these
mechanisms—a limited “allowable adjustment” to
discretionary spending limits to pay for the congressionally
designated costs of major disasters under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act
(P.L. 100-707; hereinafter “the Stafford Act”)—represented
a new approach to paying for disaster relief. In the past,
while a portion of funding for disaster costs had been
included in annual appropriations measures as part of the
regular funding process, much of these costs had frequently
been designated as an emergency requirement and included
in supplemental appropriations measures on an ad hoc
basis. This new disaster relief designation allowed a limited
amount of additional appropriations for disaster costs into
the annual appropriations process, instead of relying on
emergency designations and supplemental appropriations
bills.
Calculating the Maximum Allowable
Adjustment for Disaster Relief
The maximum size of the allowable adjustment, as defined
in 2 U.S.C. §901(b)(2)(D), is based on a modified 10-year
rolling average of disaster relief appropriations calculated
by the Office of Management and Budget (OMB).
Annually, through FY2018, OMB has reviewed the past 10
years of disaster relief appropriations. For FY2011 and
before, OMB identified appropriations associated with
major disaster declarations for use in the calculation. For
FY2012 and later years, OMB relied on explicit
congressional designations of appropriations as disaster
relief pursuant to the BCA. The top half of Figure 1 shows
the appropriations amounts used for FY2001-FY2018 and
Source: CRS analysis of data from OMB sequestration reports.
the allowable adjustment calculated for FY2012-FY2018.
Notes: DRBA=Disaster Relief Budget Authority.
The calculated average disregards the high and low funding
Figure 2. The Effect of Carryover on the Disaster
years in the 10-year data set. If Congress does not fully
Relief Allowable Adjustment FY2012-FY2018
exercise the allowable adjustment, the unused portion can
(in billions of nominal dollars of budget authority)
be rolled forward into the next fiscal year—however, in
calculations for FY2012-FY2018, this “carryover” expired
if unused in the next fiscal year. The bottom half of Figure
1 shows how the adjustment for FY2018 was calculated.
Annual disaster relief budget authority totals used to
calculate the FY2018 allowable adjustment are darker.
The Effect of One-Year Carryover
A more detailed look at FY2012-FY2018 in Figure 2
shows the impact of this one-year carryover. While
carryover allowed for slightly greater use of the allowable
adjustment than the rolling average alone would have in
FY2013 and FY2017, when roughly $12 billion in
carryover was available in FY2015 and FY2016, it expired
Source: CRS analysis of data from OMB reports.
unused.
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Calculation and Use of the Disaster Relief Allowable Adjustment
Changes to the Calculation
Highway Administration’s Emergency Relief Program at
Section 102 of the Bipartisan Budget Act of 2018, Division
the Department of Transportation; and the Community
O, modified the calculation of the maximum size of the
Development Fund at the Department of Housing and
disaster relief allowable adjustment in two ways: unused
Urban Development.
adjustment from prior fiscal years would no longer expire,
and 5% of the amount of disaster relief funding that does
Figure 3. Appropriations with Disaster Relief
not carry a disaster relief designation would be added to the
Designations by Departments, FY2012-FY2019
allowable adjustment calculation, starting in FY2018.
(in billions of nominal dollars of budget authority)
Originally, OMB’s allowable adjustment calculations did
not include funding for major disasters pursuant to the
Stafford Act after FY2012 that was designated as an
emergency requirement. For example, Division B of P.L.
115-56 (the FY2017 supplemental appropriation after
Hurricane Harvey) included $15.25 billion in emergency-
designated funding, $14.8 billion of which was specifically
for the costs of major disasters under the Stafford Act. Yet
the $14.8 billion of funding would not have contributed to
the calculation of future allowable adjustments because it
carried an emergency designation, rather than the disaster
relief designation.
This was not an isolated occurrence: in four of the seven
fiscal years since the enactment of the Budget Control Act,
Source: CRS analysis of data from appropriations legislation.
over $125 billion in emergency-designated spending
pursuant to Stafford Act major disasters was appropriated
Congressional Considerations
above the allowable adjustment for disaster relief. Section
102 allows 5% of emergency-designated disaster relief
Should the Calculation Use Different Data?
provided after FY2011 to be added to the allowable
The BCA required OMB to calculate annual costs of
adjustment.
activities carried out pursuant to declaration of a major
Due to these changes, FY2019’s allowable adjustment was
disaster under the Stafford Act, and report on it to
$14.965 billion ($6.814 billion from the 10-year average +
congressional committees within 30 days. OMB
acknowledges that their methodology only captured
$6.296 billion from 5% of emergency-designated disaster
relief + $1.855 billion in carryover created, in part, by the
appropriations where bill or report language specifically
recalculation of the FY2018 allowable adjustment). OMB’s
attributed costs to a specific disaster declaration, or
projected FY2020 allowable adjustment is $17.3 billion
specifically to major disasters declared under the Stafford
($7.9 billion from the 10-year average + $6.4 billion from
Act, resulting in undercounting total disaster relief costs.
emergency-designated disaster relief + $3.0 billion in
carryover, assuming no further disaster relief appropriations
Accounting for federal spending on disasters with precision
is difficult, due to a lack of data. If Congress seeks to link
are made for FY2019).
the size of the allowable adjustment more closely to the
How Has the Adjustment Been Used?
actual costs of major disasters, it may consider changes to
the BCA’s
While in some years the disaster relief designation and the
method of calculating a potential adjustment and
allowable adjustment it triggers has solely been used to
the underlying disaster spending data. These changes might
make appropriations to FEMA’s Disaster Relief Fund
include instituting a congressional disaster relief
(DRF) as part of the regular appropriations process, the
designation distinct from budgetary relief, or requiring
designation has also been used to make appropriations to
federal agency reporting on disaster-related spending.
various federal departments with roles in disaster response
What Happens After the Adjustment Ends?
and recovery.
The allowable adjustment mechanism ends with the
As Figure 3 shows, aside from the DRF (funded through
expiration of the BCA discretionary budget caps in
DHS), the disaster relief designation has been applied to
FY2021. Congress may consider extending this mechanism,
appropriations for five other government departments.
but such an action would require legislative action.
Three appropriations to the Department of Agriculture have
For More Information
received funding with the disaster relief designation: the
Emergency Conservation Program; the Emergency Forest
For more information on the DRF and the history of U.S.
Restoration Program; and the Emergency Watershed
disaster relief, see CRS Report R45484, The Disaster Relief
Protection Program. The Department of Defense funding
Fund: Overview and Issues, by William L. Painter.
listed is for three separate accounts in the U.S. Army Corps
of Engineers’ Civil Works Program. Other recipients of the
William L. Painter, Specialist in Homeland Security and
designation include Economic Development Assistance
Appropriations
programs at the Department of Commerce, the Federal
IF10720
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Calculation and Use of the Disaster Relief Allowable Adjustment
Disclaimer
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