This publication discusses the recent history of offsetting rescissions in paying for supplemental appropriations to the Federal Emergency Management Agency's Disaster Relief Fund (DRF). As Congress has debated the growing size of the budget deficit and national debt in recent years, efforts have intensified to control spending and offset the costs of legislation. In 1995, 2011, and again in 2012, the question of offsetting disaster relief spending emerged in congressional debate. In 2011, a series of disasters threatened to deplete the DRF, which is the primary source of assistance to state and local governments as well as individuals in the wake of disasters. Hurricane Sandy struck the east coast of the United States on October 29, 2012. The storm caused tens of billions of dollars in damage along the coast. As damage estimates became public in the weeks after the storm, calls for supplemental appropriations to help pay for recovery efforts were met with calls for offsets from some quarters. Traditionally, supplemental disaster relief funding has been treated as emergency spending, not counted against discretionary budget caps, and not requiring an offset.

However, supplemental spending packages have at times carried rescissions that have offset, to one degree or another, their budgetary impact. In some instances, the supplemental spending packages have contained both appropriations for the DRF and offsetting rescissions. This publication examines the use of offsets in connection with supplemental funding for the DRF since FY1990, reviewing three specific incidences where bills that had an impact on the level of funding available in the DRF were fully offset, and points out a number of issues Congress may wish to consider in this debate. Since FY1990, there has only been one case in which supplemental funding for the DRF was completely offset by rescissions.