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Updated January 10, 2022
Calculation and Use of the Disaster Relief Allowable Adjustment
The Budget Control Act (P.L. 112-25, hereinafter the BCA)
carryover that was available in FY2015 and FY2016
established limits on federal spending, as well as ways to
expired unused.
adjust those limits to accommodate certain priority
spending. One of these mechanisms—a limited “allowable
Figure 1. Calculating the Allowable Adjustment
adjustment” to discretionary spending limits to pay for the
(in bil ions of nominal dol ars of budget authority)
congressionally designated costs of major disasters under
the Robert T. Stafford Disaster Relief and Emergency
Assistance Act—represented a new approach to paying for
disaster relief. In the past, while some funding for disaster
costs had been included in annual appropriations measures
as part of the regular funding process, many of these costs
had been designated as emergency requirements and were
included in supplemental appropriations measures on an ad
hoc basis. This 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. The formula to calculate the size of the adjustment
was revised in 2018. Although the statutory authority for
the adjustment has expired, the FY2022 budget resolution
included an adjustment for disaster relief that continues to
effectively exempt such funding from spending limits
within the congressional budget process.
Calculating the Maximum Adjustment
The maximum size of the allowable adjustment, as defined
in 2 U.S.C. §901(b)(2)(D), was based on a modified 10-
year rolling average of disaster relief appropriations
annually reviewed and calculated by the Office of
Management and Budget (OMB). To establish amounts for
the calculation prior to FY2012, OMB identified
appropriations associated with major disaster declarations.
For FY2012 and later years, OMB relied on explicit
congressional designations of appropriations as disaster
relief pursuant to the BCA. The top of Figure 1 shows the
appropriations amounts used for FY2001-FY2020 and the
allowable adjustments calculated for FY2012-FY2021.
The calculated average disregarded the high and low
funding years in the 10-year data set. If Congress did not
fully exercise the allowable adjustment, the unused portion
could be rolled forward into the next fiscal year—however,
in calculations for FY2012-FY2017, this “carryover”
expired if unused in the next fiscal year. The second part of
Figure 1 shows the calculation of the adjustment for
FY2017. Annual disaster relief budget authority totals used
for the FY2017 allowable adjustment are darkened.
The Effect of One-Year Carryover
A more detailed look at FY2012-FY2018 in the third part of
Figure 1 shows the impact of this one-year carryover.
While carryover allowed for slightly greater use of the
allowable adjustment than the rolling average alone in
Source: CRS analysis of data from OMB sequestration reports.
FY2013 and FY2017, the roughly $12 billion of additional
Notes: DRBA=Disaster Relief Budget Authority. Red arrows
indicate the value is beyond the scale. Total DRBA and emergency-
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Calculation and Use of the Disaster Relief Allowable Adjustment
designated disaster relief in FY2018=$96.2 bil ion; FY2020=$57.5
bil ion; and FY2021=$69.3 bil ion.
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Calculation and Use of the Disaster Relief Allowable Adjustment
Changes to the Calculation
As Figure 2 shows, aside from the DRF (funded through
The Bipartisan Budget Act of 2018, Division O, Section
DHS), the disaster relief designation has been applied to
102, modified the calculation of the maximum size of the
appropriations for five other federal departments with roles
allowable adjustment in two ways: unused adjustment from
in disaster response and recovery. Three appropriations to
prior fiscal years would no longer expire; and 5% of the
the Department of Agriculture have received such funding.
amount of emergency-designated disaster-related funding
The Department of Defense funding listed includes three
without a disaster relief designation would be added to the
separate accounts in the U.S. Army Corps of Engineers’
allowable adjustment, starting with a revision of the
Civil Works Program. Other recipients include Economic
existing FY2018 calculation.
Development Assistance programs at the Department of
Commerce, the Federal Highway Administration’s
Originally, OMB’s allowable adjustment calculations did
Emergency Relief Program at the Department of
not include the funding for major disasters after FY2012
Transportation; and the Community Development Fund at
that was designated as an emergency requirement. The red
the Department of Housing and Urban Development.
markers in the first part of Figure 1 show the total disaster
relief funding level had the emergency-designated relief
Figure 2. Appropriations with Disaster Relief
been included. For example, Division B of P.L. 115-56 (the
Designations by Departments, FY2012-FY2021
FY2017 supplemental appropriation after Hurricane
(bil ions of nominal dol ars of discretionary budget authority)
Harvey) included $15.25 billion in emergency-designated
funding, $14.8 billion of which was specifically for the
costs of major disasters. 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 6 of the 10 fiscal
years covered by the BCA, more than $173 billion in
emergency-designated spending pursuant to major disasters
was appropriated above the allowable adjustment for
disaster relief. Section 102 allowed 5% of emergency-
designated disaster relief provided after FY2011 to be
added to the allowable adjustment.
Due to these changes, FY2018’s allowable adjustment was
revised upward by $1.855 billion (5% of the $37.101 billion
Source: CRS analysis of data from appropriations legislation.
in emergency-designated disaster relief after FY2011 thus
far). This new factor, coupled with high levels of disaster
Did the Allowable Adjustment Work?
relief associated with catastrophic disasters and COVID-19,
If the intent was to reduce the level of spending on
reversed a declining trend in the allowable adjustment.
disasters, it can be argued that it was not successful—
OMB calculated the final FY2021 allowable adjustment to
disaster spending is largely linked to the relief statutes in
be $17.385 billion (summing $8.691 billion from the 10-
place and the level of disaster activity. There is little
year average with $8.594 billion from emergency-
evidence that in the post-WWII era any type of budget
designated disaster relief).
controls have significantly constrained U.S. disaster relief
spending. If the intent was to bring disaster spending into
After the Budget Control Act
the annual appropriations process for greater inclusion in
The statutory adjustment ended with the expiration of the
the debate and to reduce the demand for supplemental
BCA discretionary budget caps in FY2021. In its FY2022
appropriations, it can be argued that it was a success.
budget request, however, the Biden Administration
proposed extending special budgetary treatment for disaster
Should the Calculation Use Different Data?
relief. Subsequently, the FY2022 budget resolution
Accounting for federal spending on disasters with precision
included an adjustment for disaster relief that continues to
is difficult due to a lack of data. If Congress seeks to link a
effectively exempt such funding from spending limits
future adjustment more closely to the actual costs of major
within the congressional budget process. However, as of
disasters, it may require more authoritative agency
this writing, OMB has not released a calculation of the
reporting on disaster-related spending.
adjustment’s allowable size for FY2022.
For More Information
Frequent Adjustment Questions
For more information on the DRF and the history of U.S.
disaster relief, see CRS Report R45484, The Disaster Relief
How Has the Adjustment Been Used?
Fund: Overview and Issues, by William L. Painter.
Of the more than $104 billion in discretionary spending
covered by the disaster relief allowable adjustment, 93%
William L. Painter, Specialist in Homeland Security and
has gone to FEMA’s Disaster Relief Fund (DRF) as part of
Appropriations
the appropriations process.
IF10720
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Calculation and Use of the Disaster Relief Allowable Adjustment
Disclaimer
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