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Cato Weekly Podcast • November 20, 2025 

# The Disaster Aid System: How FEMA Rewards Risk 

FEMA was meant to help only when disasters exceeded state capacity. Yet today it functions primarily as a national subsidy machine, encouraging development in floodplains, bailing out wealthy coastal states, and shifting costs onto taxpayers far from the danger zones. The Cato Institute’s Dominik Lett and Chris Edwards discuss how well-intentioned federal aid has created perverse incentives, bureaucratic delays, and a long tail of spending that continues decades after storms like Katrina.

[![Image of the destruction caused by Hurricane Katrina in 2005 along the Gulf Coast](/sites/cato.org/files/styles/content_teaser/public/2025-11/GettyImages-472030857.jpg?itok=vE8KQflo)](https://www.cato.org/blog/sunset-fema-aid-return-disaster-responsibility-states) 

blog 

### [Sunset FEMA Aid and Return Disaster Responsibility to the States](/blog/sunset-fema-aid-return-disaster-responsibility-states) 

By [Dominik Lett](https://www.cato.org/people/dominik-lett) 

Five reforms that strengthen the disaster process and save taxpayer dollars.

[![Flooded streets and parking lot near the Castillo de San Marcos after Hurricane Milton. St Augustine, Florida](/sites/cato.org/files/styles/content_teaser/public/2024-11/HurricaneMilton.jpg?itok=mvTyifyv)](https://www.cato.org/blog/rethinking-disaster-aid-promoting-fiscal-responsibility-risk-management) 

blog 

### [Rethinking Disaster Aid: Promoting Fiscal Responsibility and Risk Management](/blog/rethinking-disaster-aid-promoting-fiscal-responsibility-risk-management) 

By [Romina Boccia](https://www.cato.org/people/romina-boccia) and [Dominik Lett](https://www.cato.org/people/dominik-lett) 

It’s time for Congress to break the cycle of reactionary disaster deficit spending. Pairing emergency relief with these substantive reforms would ensure that taxpayer dollars are used in a more responsible and effective manner.

[![fires](/sites/cato.org/files/styles/content_teaser/public/2025-01/la%20wildfire%20jan%207.png?itok=zIb0PnMx)](https://www.cato.org/blog/trump-right-end-fema) 

blog 

### [Trump Is Right: End FEMA](/blog/trump-right-end-fema) 

By [Chris Edwards](https://www.cato.org/people/chris-edwards) 

Trump [suggested](https://www.whitehouse.gov/remarks/2025/01/remarks-by-president-trump-during-hurricane-helene-briefing/) “maybe getting rid of FEMA,” and he said, “I think we’re going to recommend that FEMA go away and we pay directly.” The president’s inclinations are right, as I discuss [in this study](https://www.downsizinggovernment.org/dhs/fema), but we should phase out FEMA and federal payments to the states for disasters.

[![Image of Hurricane Destruction](/sites/cato.org/files/styles/content_teaser/public/2024-10/hurricane%20damage.png?itok=_XBOiSL3)](https://www.cato.org/blog/femas-role-hurricanes) 

blog 

### [FEMA’s Role in Hurricanes](/blog/femas-role-hurricanes) 

By [Chris Edwards](https://www.cato.org/people/chris-edwards) 

Hurricanes Helene and Milton have now passed, leaving trails of destruction. Some politicians are using the disasters as a political football, focusing particularly on the funding of the Federal Emergency Management Agency (FEMA). But the debate over FEMA is somewhat misplaced.

[![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) 
This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/). 

##### Featuring 

[![Chris Edwards](/sites/cato.org/files/styles/author_picture/public/2021-01/Chris%20Edwards.jpg?itok=549WLrcG)](/people/chris-edwards) 

##### [Chris Edwards](/people/chris-edwards)

Kilts Family Chair in Fiscal Studies, Cato Institute and Editor, Down​siz​ing​Gov​ern​ment​.org

[ 

](https://x.com/CatoEdwards) [ 

](mailto:cedwards@cato.org) 

[![Dominik Lee cropped](/sites/cato.org/files/styles/author_picture/public/2025-03/dominik-lett%20Cropped.jpg?itok=45gTbBqN)](/people/dominik-lett) 

##### [Dominik Lett](/people/dominik-lett)

Former Policy Analyst, Cato Institute