FEMA Trump administration officials are divided on the future of the agency.
Now the Homeland Security Secretary is proposing to shrink FEMA.
She wants to shift the agency's role more toward brand distribution rather than direct disaster response.
But a Trump appointed panel says the agency should be given greater authority and independence.
The panel says FEMA should even be elevated to a cabinet-level department.
Joining me live this morning to weigh in is Jeff Gitterman, CEO of Gitterman Asset Management.
Thank you so much for joining me.
Thanks for having me, Roy.
Well, first and foremost, can you tell us about the divide on FEMA's future and what does that look like when we're talking about the Trump administration?
I mean, it's fascinating because Trump appointed this cabinet, it's former FEMA officials, its CEOs of insurance companies, energy.
Also it's a great cabinet.
Frankly, a lot of people didn't expect much from the cabinet, but they came back with a 160 page paper that actually recommended elevating FEMA to a cabinet level response team, keeping it in Washington, keeping the reinsurance programs exactly the same as they are, and actually doing more local and rural work.
On the other end, Christine Nome has challenged that.
She's taken a 160 page paper.
She's chopped it down to 20 pages, and it's unclear what recommendation is actually going to get to Trump at this point.
And of course the concerns are about this impact.
And when we take a look back at 2025, especially the hurricane season.
Thankfully we haven't had to see FEMA respond to any hurricanes in the US this year, but there have been plenty of other extreme weather events across the nation.
So what do you think FEMA should be working on when disaster relief isn't a primary concern?
Well, grant making, which is something that Christina was actually in favor of, is a big part of the process of what they can do, but also utility work, infrastructure work, so they have a very broad Response mandate in the current proposal, what they're talking about is going from a 75% coverage rate on FEMA to a 50% coverage rate on FEMA, and it's always easy when we throw around percentages, but when you think about that, that doubles the amount of money that states, cities, and municipalities have to come up with post disasters, and they're already struggling to be able to provide that support.
Some cases, FEMA provides up to 100% of financial support post disaster.
Some of that 25% of that loan provisions, but still they're funneling a lot more money and looking at cutting that in half is going to be detrimental to all of those regions, especially rural Indian tribes, lands where they're not getting even the support that they need currently, which was also a recommendation of the cabinet.
The cabinet said in places like tribal.
Lands they need to do more about being able to provide support and funding assistance.
Yeah, and Jeff, every Monday you and I talk about climate adaptation as well as risk mitigation.
So when it comes to an investor's portfolio, what could this actually look like?
I mean, there's a ton of investment.
There's firms like Lightsmith which are doing private equity around adaptation and resilience.
There's firms like myself and. and asset management that's doing a lot of investment around sustainable infrastructure, water, which is a primary disaster.
When you think about climate, you can think about either having too little water or having too much water.
You can really sum it up with that.
So investment around water, early warning systems around storm is all huge investments that dramatically reduce the effect and cost of storms.
They're talking currently.
A lot of the reports that have come out from JPMorgan and Man Group and Temase that for every $1 invested in resilience and adaptation, it could be up to $10 in actually return.
So there's a lot of things that we can be focused on.
The thing that we can't be focused on is post disaster like North Carolina pulling those support from those communities that are desperately in need that don't have running water after a storm.
That's something that we can't live with.
And finally, before I let you go, tell us what's happening on the institutional investment as well as private equity side when it comes to climate adaptation as well as risk mitigation.
A lot of it right now is in AI, and you think what is AI doing around climate adaptation resilience because it's also a climate problem, but what AI is doing is actually like grid decentralization, making sure that energy is there when we need it.
And when it's not needed, it's being pushed off to places or put into storage.
That's a dramatic impact on CO2 reduction and also disaster recovery, providing that we don't have rolling blackouts.
I mean, we're dealing with huge energy demand from AI.
We need to be able to balance that energy demand with systems that could actually put the energy in the right place at the right time, but also finding out where.
Droughts are starting to increase where water is becoming too much.
Investing in roads that actually absorb water.
There's all kinds of private investments and startups that are focused on the climate adaptation problem and coming out of COP, which just ended COP 30 in Brazil, the big story is adaptation and resilience.
It's unfortunately again for the 30th year in a row.
It is not on mitigation and reduction.
Of fossil fuels.
There were no agreements met on that part, but there were agreements met on investment and adaptation resilience, especially for third world countries that suffered the biggest blow from these types of storms that we've been dealing with.
Well, Jeff, a lot of moving parts to keep our eyes on.
I think balance is the key word there.
So thank you so much for sharing all of your insights and your perspective today.
Thank you.
Thank you.
