House Financial Services panel reviews HUD disaster recovery funding model

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HUD disaster recovery review

Highlights

The House Financial Services Subcommittee is reviewing HUD's administration of the CDBG-DR disaster recovery program, which lacks statutory authorization and requires new rules for each disaster.
Of the $109.8 billion allocated through CDBG-DR since inception, $64.7 billion has been spent, but spending rates are slow—for instance, only 4.5% of $2 billion for Puerto Rico and the U.S. Virgin Islands' 2018 outages has been used.
Chairman Mike Flood criticized CDBG-DR's fit within the broader CDBG framework, citing slow allocations, oversight challenges, and misaligned funding objectives, and suggested considering a new federal disaster aid structure.

Hearing focuses on CDBG-DR structure

As reported by the House Committee on Financial Services, Housing and Insurance Subcommittee Chairman Mike Flood says the panel is examining how HUD administers disaster recovery support through the CDBG-DR program. He describes the program as supplemental aid for long-term needs that remain after assistance from FEMA and the SBA has already been deployed.

Flood says CDBG-DR is not authorized in statute and is usually funded through supplemental appropriations after disasters. He argues that this forces HUD to effectively rewrite rules for each event, creating administrative burdens for the agency and for local governments seeking recovery funds.

In his prepared remarks, Flood cites a HUD Office of Inspector General report issued in January that says $64.7 billion of the $109.8 billion allocated through CDBG-DR since inception has been spent. He also points to specific cases, including $2 billion allocated to Puerto Rico and the U.S. Virgin Islands for 2018 electrical power outages, of which about 4.5% has been spent, and $16.1 billion allocated for mitigation activities from 2015 to 2018, of which about 16% has been spent.

Debate turns to future disaster aid design

Flood says the weak spending pace reflects both slow HUD allocation and difficulties grantees face in using the funds once they are awarded. He adds that HUD also struggles with oversight designed to prevent waste, fraud and abuse after money is spent.

The chairman argues that permanently authorizing CDBG-DR in its current form would not be prudent. He says the program inherits the broader CDBG framework, which requires funds to meet national objectives tied to low- and moderate-income benefit, slum or blight prevention, or urgent health and safety needs, rather than being designed specifically for post-disaster recovery.

That mismatch, he says, creates an inherent inconsistency because disaster recovery dollars must fit priorities that are not built around recovery itself. The hearing is expected to explore whether Congress should pursue a different structure for federal disaster recovery assistance instead of turning the existing approach into a permanent statutory program.

Our earlier article on the House Appropriations Committee’s FY27 labor, health, human services and education spending bill outlined how lawmakers advanced a $189.3 billion discretionary package with an emphasis on biomedical research, biodefense and public health readiness. We also highlighted the bill’s policy guardrails—such as supply-chain restrictions for the Strategic National Stockpile and measures targeting waste, fraud and abuse—showing how Congress is pairing funding decisions with tighter oversight and program conditions.

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