Federal Update: FEMA Review Council Releases Final Recommendations 

Last week, the FEMA Review Council released its final report outlining a broad set of recommendations to reshape the federal government’s role in disaster preparedness, response, recovery, and mitigation. The report is organized around the principle that disaster response should be “locally executed, state or tribally managed, and federally supported.” If implemented, the recommendations could significantly change how federal disaster programs are administered, placing greater responsibility on state and local governments while shifting the federal government toward a more limited support and coordination role. 

Among its most notable recommendations, the Council calls for realigning federal disaster assistance so that federal declarations are reserved for larger events that exceed state and local capacity. This would include moving from the current process, which is informed in part by per-capita damage indicators, toward a more predefined set of metrics for determining when federal assistance is triggered. While the report emphasizes faster decisions, reduced bureaucracy, and greater flexibility, some disaster experts have raised concerns about whether these types of parametric triggers can be designed fairly across different disaster types, geographies, and local conditions. 

The report also proposes converting FEMA’s Public Assistance program into a direct funding model, with federal funds released to states within 30 days of a major disaster declaration based on objective disaster criteria and cost estimates, rather than through the current project-by-project reimbursement process. If recovery costs exceed the initial payment, states could seek additional assistance from the president. 

Other recommendations include replacing the Hazard Mitigation Grant Program with a new two-phase mitigation model that would provide faster upfront funding for mitigation and longer-term risk reduction projects. 

For Individual Assistance, the Council proposes consolidating existing survivor assistance programs into a single direct payment for survivors whose homes are uninhabitable. FEMA’s role would focus more narrowly on emergency and temporary housing, while shifting away from long-term housing assistance and giving states the option to administer their own housing programs under federal standards. 

The report also recommends changes to the National Flood Insurance Program (NFIP), including shifting more flood insurance coverage to the private market and continuing to align premiums more closely with risk. The Council notes that the NFIP remains more than $20 billion in debt and argues that broader reforms are needed to improve the program’s long-term financial stability. 

More broadly, the report calls for transforming FEMA into a leaner agency focused on coordination, federal support, and stronger partnerships with state and local governments. While earlier drafts reportedly considered deeper workforce reductions and renaming the agency, the final report instead focuses on streamlining operations, modernizing disaster aid, and rebalancing staffing between headquarters and regional offices to reduce what it describes as bureaucratic bloat. It should be noted that the Council recommends phasing in the reforms over two to three years to give state and local governments time to build the fiscal, staffing, and operational capacity needed under the new model. 

Congress Requires Public Dashboard for FEMA Disaster Aid 

As part of the recently enacted FY 2026 Homeland Security spending law (P.L. 119-86), Congress approved a new transparency requirement for FEMA’s Public Assistance Program. Specifically, Section 313 of the Act requires FEMA to create a publicly accessible, interactive dashboard to track Public Assistance reimbursement requests. 

The provision responds to a long-standing concern for local governments, which have often had limited visibility into where projects stand, why delays are occurring, or when reimbursement may be expected. 

Specifically, the new law requires FEMA to post reimbursement request data within 90 days of receiving it and provide additional updates within 60 days after a project enters final review at the Department of Homeland Security. 

At a minimum, the dashboard must include project-level information, including cost estimates, applicant information, submission dates, project descriptions, federal and non-federal cost-share details, review status, approval dates, and grant issuance dates. FEMA also must provide plain-language explanations when cost estimates are not approved or grants are delayed, along with any corrective actions taken. 

Once implemented, the dashboard could provide a clearer view of project status, support cash flow planning, and help counties communicate more effectively with residents about recovery timelines. 

House to Vote on Amended Housing Package Next Week 

This week, senior House lawmakers reached a bipartisan agreement on changes to a major housing affordability package. The amended version of the 21^st Century Road to Housing Act – which passed the Senate last month but has faced resistance in the lower chamber – is scheduled for a floor vote next week. 

The House compromise would narrow several key provisions of the Senate-passed bill, including proposed limits on so-called institutional investors in the housing market. Specifically, the House version would revise the definition of “single-family home” to exclude manufactured housing and homes that have been renovated for sale. This change could allow private equity firms and other large companies to purchase more homes than would have been permitted under the Senate bill.  

The bill also would strip a controversial Senate provision requiring single-family homes that are built by large institutional investors as long-term rentals to be sold to individual homebuyers after seven years. It should be noted that housing industry groups and some affordable housing advocates have opposed that requirement, arguing it could discourage investment in rental housing. 

In addition, the House version would remove several other Senate-backed provisions, including language to eliminate the cap on the number of properties eligible for HUD’s Rental Assistance Demonstration program and a permanent authorization of the Community Development Block Grant (CDBG)-Disaster Recovery program. 

The package would, however, retain the Build Now Act, a provision that could affect a limited number of large CDBG entitlement counties. Under the proposal, counties that fail to meet certain housing growth metrics could face a 10 percent reduction in their CDBG allocation, while other jurisdictions could become eligible for additional incentive funding. Although the provision is limited in scope, it could create winners and losers among California counties. 

The outlook for the House package remains uncertain. If the House passes the amended bill, it would need to return to the Senate for final approval before it could be sent to President Trump. That could complicate the path forward, particularly since the White House and Senate leaders have urged the House to pass the Senate-approved version without changes. 

Trump Administration to Withhold $1.3 Billion in California Medicaid Reimbursement

On Wednesday, Vice President JD Vance announced a series of new steps as part of the Trump administration’s effort to identify and prevent fraud in federal health programs, including a $1.3 billion deferral in Medicaid reimbursements for California’s In-Home Supportive Services (IHSS) program. 

According to Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services (CMS), this is largest Medicaid funding deferral the agency has ever made in response to what it considers questionable expenditures and program anomalies. CMS cited concerns about the rate of growth in California’s home care program compared to other states, though agency officials did not provide specific examples of documented fraud. California will have 60 days to submit additional documentation supporting the deferred claims. 

In addition to the California-specific action, CMS announced a nationwide audit of state Medicaid Fraud Control Units (MFCUs), which are federally funded state-level watchdogs responsible for investigating Medicaid fraud, abuse, and neglect. States that fail to cooperate with the audit could be at risk of noncompliance with federal Medicaid requirements, potentially putting federal funding in jeopardy. 

CMS also announced a six-month nationwide moratorium on new Medicare enrollment for hospices and home health agencies. During that period, the agency will increase targeted investigations, deploy advanced data analytics, and accelerate efforts to remove hospice and home health providers from Medicare when they are suspected of fraud.