The looming government shutdown poses a significant threat to the Federal Emergency Management Agency's (FEMA) hurricane season operations. This challenge follows FEMA's decision to suspend more than 1,000 rebuilding projects due to financial constraints since August. Former FEMA Administrator Craig Fugate explains to Yahoo Finance how balancing the disaster relief fund and workforce operational budget within the current budget is a pressing concern.

"The biggest responsibility for FEMA will be all of the permit workforce, about 5,000 employees will be put at risk in what they call lapse of funding if the government shuts down," Fugate says.

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Video Transcript

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- A government shutdown could force FEMA to stop all disaster aid during the peak of Hurricane season. With that in mind, the government agency is already nearly stretched to its limit. FEMA restricted its spending back in August to only address life-threatening emergency. The restriction means thousands of projects to rebuild facilities and infrastructure after disasters, typically funded in large part by FEMA, have been put on hold.

Joining us now is Craig Fugate, former FEMA administrator. Appreciate you joining me this morning. So when you talk about where the funding shortfall already was, what does the threat of a looming government shutdown add in terms of the increased pressure on FEMA's responsibility?

CRAIG FUGATE: Well, the biggest problem for FEMA will be all of the permanent workforce, about 5,000 employees will be put at risk in what they call lapse of funding if the government shuts down. So while disaster work can continue, because those funds don't end at the end of the fiscal year but they're running out, all of the permanent workforce, they have to go and do what we call each person each position.

What's going to be considered essential and what's going to go on. You know, people that will have to go home and stop work. That could be the 5,000 workforce. That could be 90% of the folks are at home. Not working their jobs and not supporting the disaster response teams.

- And so then when it comes to actually responding to disasters, as we're in the peak of Hurricane season, a lot of extreme weather continuing, how do you see that affecting the response that FEMA's able to give in the event of some of these disasters?

CRAIG FUGATE: Well, I'll give an example. During one of the government shutdowns during the Obama administration, we had a tropical system form. And we had to start calling staff back into FEMA headquarters in Washington DC. And many of these folks had been furloughed, they were not required to stay there. Fortunately, we were able to get hold of them and have them come in. And they were continuing to do that while not being paid.

- So then in terms of the most pressing needs then, in order to be able to have FEMA still respond to these disasters, what are the key priorities that need to be funded for FEMA?

CRAIG FUGATE: Well, the big one is the disaster relief fund. And that's the fund that FEMA has already restricted permanent work until they either get a continuing resolution, which will put money back into it or a separate supplemental. This is the thing that with the continuing resolution, it would replenish not only FEMA's operational budget, the base budget of the people that are permanent workforce, it would also put money back into the disaster relief fund. And that should allow FEMA to go back to allowing permanent work to go forward.

As it is, those funds are still going down. They still are able to respond to immediate needs. And that will not end with a lapse of funding. Those dollars are not an annual appropriation. So they can continue to do that work starting October 1. But the rest of the FEMA workforce, up to 90% of them, potentially could be sent home. And many of those permanent workforce are the people behind the scenes making sure the disaster team and those funds and all the resources they need are being met.