U.S. Financial Services Committee hearing examines delays oversight gaps and reform options in HUD disaster recovery program

The U.S. Financial Services Committee's Subcommittee on Housing and Insurance held a hearing on the Department of Housing and Urban Development's Community Development Block Grant Disaster Recovery program, focusing on whether the current model delays aid and needs structural overhaul. Members and witnesses described a program that lacks permanent authorization and stable rules, requiring HUD to set disaster-specific requirements for each appropriation and leaving state and local governments to manage slow, inconsistent and burdensome recovery funding. Lawmakers said Congress has appropriated more than USD 100 billion through CDBG-DR over the past three decades, but concerns remain over delays, administrative complexity, overlapping responsibilities and oversight. The hearing cited Government Accountability Office findings on protracted rulemaking, inconsistent administrative processes, funding delays, grantee burden and fraud risk, alongside HUD Office of Inspector General findings that more than USD 690 million in spending lacked adequate documentation. Reform options differed. Some lawmakers argued disaster recovery should be consolidated at the Federal Emergency Management Agency, while other participants supported permanent authorization of a separate HUD disaster recovery program but said it should be redesigned rather than codify the current structure. A Senate proposal to codify CDBG-DR also drew criticism that its formula does not treat rural counties fairly.