In May 2011, the House Appropriations Committee proposed offsetting $1 billion of emergency supplemental appropriations for the Federal Emergency Management Agency's (FEMA's) Disaster Relief Fund—the primary source of federal government assistance for people and communities affected by major disasters—which had been depleted at a faster rate than had been projected due to a number of major storms and floods earlier in the year. Beginning in November 2012 there were calls for supplemental appropriations for Hurricane Sandy relief efforts, as well as calls for offsets to pay for them. CRS examined legislation with offsetting rescissions and provisions affecting the DRF, looking for connections between supplemental DRF funding and offsets. The analysis takes a detailed look at three cases where legislation affecting the DRF was fully offset, but ultimately finds that from FY1990 through FY2013, Congress fully offset supplemental funding for the DRF through cuts elsewhere in the budget only once. Therefore, by not providing supplemental appropriations to the DRF and actually using DRF funds to pay for supplemental appropriations for other government elements, this legislation is not an example of supplemental funding for the DRF being offset. Use of Emergency Designations and Adjustments to Discretionary Spending Limits

What was a traditional pattern of using the supplemental appropriations process to cover the costs of major disasters may have changed with the enactment of the Budget Control Act and its allowable adjustment which can be used to cover the costs of major disasters under the Stafford Act. One of the primary reasons that supplemental funding for the DRF had not been offset over the period of analysis used in this report is the simple fact that it has not had to be offset, given the availability of the emergency funding mechanism to work around the budget caps. Instead, in the absence of an explicit prohibition on the practice as noted above, Congress chose to use emergency designations to fund disaster relief in excess of the allowable adjustment under the BCA. In the current budgetary environment, using allowable adjustments or emergency designations in supplemental appropriations legislation results in additional deficit spending. Historical Data

To show the relative impact of offsets on supplemental spending and the DRF, Table A-1 provides a breakdown of all appropriations bills that have become law carrying both supplemental spending and rescissions from FY1990 through FY2013.
This report discusses the history of the use of offsetting rescissions to pay for supplemental appropriations to the Federal Emergency Management Agency's Disaster Relief Fund (DRF) from FY1990 through FY2013.
As Congress debated the growing size of the budget deficit and national debt, efforts intensified to control spending and offset the costs of legislation. Several times between FY1990 and FY2013, the question of offsetting disaster relief spending became a focus of congressional debate.
Usually, in the time reviewed, supplemental disaster relief funding was treated as emergency spending. This designation exempted it from counting against discretionary budget caps, and from needing an offset. However, supplemental spending measures at times have carried rescissions that have offset, to one degree or another, their budgetary impact. In some instances, supplemental spending measures have contained both appropriations for the DRF and offsetting rescissions, but without a specific link between the two.
With the passage of the Budget Control Act (BCA), a new mechanism was created that altered the congressional pattern of funding the DRF in part through supplemental appropriations. The BCA included an "allowable adjustment" for the federal costs of major disasters declared under the Stafford Act, which generally resulted in larger appropriations for the DRF in annual appropriations bills, and a reduced reliance on supplemental appropriations. When Hurricane Sandy struck in 2012, calls for supplemental appropriations to help pay for recovery efforts (the cost of which exceeded the size of the allowable adjustment) were met with calls for offsets from some quarters. Congress ultimately chose to provide supplemental appropriations, including funding for the DRF, with a combination of the allowable adjustment and emergency funding. Several billion dollars of appropriations under consideration for mitigation projects had their emergency designation struck on a point of order, and therefore those appropriations counted against discretionary spending limits.
In past debates over whether supplemental funding for the DRF should be offset, Congress discussed past precedents. Through independent research, CRS identified three specific incidences from FY1990 through FY2013 where bills that had an impact on the level of funding available in the DRF were fully offset, but only one case in which CRS can authoritatively state that supplemental funding for the DRF was completely offset by rescissions.