Why It Matters
A new Congressional Research Service report is drawing attention to a structural gap at the heart of federal disaster policy: the program responsible for delivering more than $111 billion in long-term Community Development Block Grant Disaster Recovery program funding to communities across the country has never been permanently authorized by Congress.
The CDBG-DR disaster recovery funding is the primary federal tool for addressing long-term recovery needs that fall outside what FEMA grants and Small Business Administration loans can cover, like housing reconstruction, infrastructure repair, and economic revitalization in the hardest-hit communities after major disasters.
But the program has no standalone statute, no permanent regulations, and no dedicated fund. Every dollar it has spent (which is more than $111 billion since FY1993, with roughly $65 billion appropriated since FY2016 alone) has flowed through one-off supplemental appropriations bills that Congress passes after individual disasters. Each one comes with its own rules, waivers, and requirements, creating a patchwork system that watchdogs say is slow, inconsistent, and vulnerable to fraud.
The CRS report, published May 8, lays out the mechanics of how CDBG-DR grants work and frames the central policy question for Congress: should this program finally be put on a permanent legal footing, and if so, who should run it?
The Big Picture
Under the current structure, the process begins only after Congress acts. When a major disaster occurs, and the President issues a declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Congress may then pass a supplemental appropriations bill that directs the Department of Housing and Urban Development to allocate Community Development Block Grant funds for disaster recovery purposes.
From there, HUD sets allocation amounts and establishes the rules for how funds can be used. States, localities, U.S. territories, and federally recognized tribes that qualify as grantees then draft action plans, engage in public participation, and submit those plans to HUD for approval before any money moves. HUD monitors spending throughout.
The process is intentionally flexible. Supplemental appropriations typically authorize HUD to issue waivers and alternative requirements tailored to specific disasters, which means the rules governing one disaster's recovery funds may look very different from another's. That flexibility can be useful, but it also creates the core administrative problems the report documents.
The Government Accountability Office has reported protracted rulemaking periods, inconsistent administrative timeframes, and significant funding delays. Grantees have told the GAO they are burdened by managing multiple CDBG-DR grants simultaneously, each with different requirements. The GAO has also flagged ongoing fraud risk. Separately, HUD's own Office of Inspector General has identified deficiencies in grantee guidance, monitoring, and data collection that create risks of improper payments and challenges in detecting waste, fraud, and abuse.
On January 8, 2025, just before the current administration took office, HUD published a "Universal Notice" in the Federal Register intended to standardize the CDBG-DR rulemaking process. According to HUD, the Universal Notice is designed to provide grantees with "increased transparency, consistency, and more timely access to CDBG-DR funds, helping to minimize program delays and accelerate recovery." It was built on an earlier practice of issuing "consolidated notices" for disasters occurring between 2020 and 2023.
Political Stakes
One of the more telling details in the CRS report involves what is no longer being said. HUD's Congressional Budget Justifications for FY2023 through FY2025 expressed support for permanent congressional authorization of CDBG-DR. The agency's FY2026 and FY2027 budget justifications dropped that language entirely.
That shift signals that the current administration has moved away from actively advocating for legislation that would formalize the program, a notable departure from the prior administration's posture. Whether that reflects a broader skepticism of expanding federal bureaucracy, a preference for maintaining congressional control over each supplemental appropriation, or simply a lower prioritization of the issue, the report does not say. But the absence of that language is a data point Congress will have to weigh.
For Republicans on Capitol Hill, the tension is real. The party has emphasized fiscal restraint and scrutiny of supplemental spending, which is the very mechanism that funds CDBG-DR. At the same time, disaster-affected communities in Republican-represented districts have been among the largest recipients of federal disaster assistance. Any posture that slows or constrains disaster recovery funding carries political risk in those communities.
For Democrats, the report offers ammunition for pushing permanent authorization legislation. The documented delays, fraud risks, and administrative inconsistencies all point toward a structural fix, and permanent authorization is the fix most consistently recommended by federal watchdogs.
For the public, the stakes are direct. When a hurricane, flood, or wildfire devastates a community, the speed and reliability of long-term recovery funding is not an abstract policy question. The CRS report makes clear that the current system's structural fragility has real consequences for how fast help arrives.
CDBG-DR Disaster Recovery Legislation
The 119th Congress has seen legislative proposals that reflect two distinct visions for fixing the program's authorization gap.
The Reforming Disaster Recovery Act has been included in two housing-related legislative packages that advanced in the Senate, including as S.Amdt. 4308 and as Division I, Title LV, Section 5505 of S. 2296. The bill would formalize HUD's role in disaster response and recovery by authorizing CDBG-DR as a standing program, establishing a dedicated fund within the Treasury, and creating a new Office of Disaster Management and Resiliency within HUD's Office of the Secretary to oversee the agency's disaster preparedness and response functions.
A separate proposal, the Natural Disaster Recovery Program Act of 2025 (H.R. 316), takes a different approach. Rather than anchoring long-term disaster recovery at HUD, it would establish a dedicated Treasury fund and authorize FEMA to assist with unmet disaster recovery needs of states and tribal governments.
The choice between these two models is not merely administrative. Permanently authorizing CDBG-DR would formally designate HUD as a principal disaster management agency with a broader, more official role in disaster response. The CRS report notes this would require further consideration of HUD's staffing and technical capacity to carry out expanded functions. Given the current administration's efforts to reduce the federal workforce, including at HUD, that capacity question is not a hypothetical.
Moving the function to FEMA, on the other hand, would place long-term recovery alongside emergency response under a single agency with an existing disaster management mandate, but would represent a significant structural departure from three decades of practice.
The Bottom Line
Congress has spent more than $111 billion on long-term disaster recovery through a program that hasn't had a permanent legal foundation. Every appropriation has been a one-time fix, and the accumulated result is a system that watchdogs have repeatedly found to be slow, inconsistent, and vulnerable to abuse.
The CRS report does not recommend a course of action, but the evidence it assembles points in a clear direction: the ad hoc model has documented costs, and the case for permanent authorization has been made by the GAO, HUD's own inspector general, and, until recently, HUD itself. The current administration's decision to remove authorization support from its budget requests is a signal that legislative action will require Congress to drive the process rather than follow the executive branch's lead.
With disaster frequency and recovery costs continuing to rise, and with active legislative proposals already moving in the Senate, the question is not whether Congress will eventually address this gap. It is whether it will do so before the next major disaster puts the program's structural weaknesses back in the spotlight.
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