Krugman mocks the idea of Romney's, but it sounds pretty good to me.
There would be a couple changes to a traditional block grant I'd make: I'd make the ramped up funding federal still of course. The whole point of it being federal in the first place is subsidization of disaster areas, after all. So let FEMA operate on a state level and then make resources available when it makes sense. I'd also make sure whatever tracking or monitoring work FEMA does (I don't know how much it does - maybe this is all NOAA) stays federal. That seems pointless to do at the state level.
Otherwise, states and localities prepare for disaster anyway and they know their states best. Let them run their own little FEMAs. Give them cash infusions when disasters are declared. Have an MOU set up between different state FEMAs so that Texans in the agency are expected to go help (and report to) New Jerseyans. But let the New Jerseyans do disaster relief in New Jersey.
What is wrong with this? Why is Krugman mocking this?