Part of the problem is the way the Forest Service budget is calculated—the service requests a percentage of the 10-year rolling average of previous years' costs, and fires have grown faster than that rolling average has allowed.
"We're using a backwards-looking budget to address unprecedented challenges," said Jones. "We're facing such more difficult fire seasons now—we're facing droughts and record high temperatures. It just takes more suppression assets to get a hold of those fires."
If the administration has its way, future costs for the largest fires could come from FEMA, the way other natural disasters like hurricanes and floods are handled.
Read MoreWildfires across 6 states
"I don't think anybody doubts that the cost of fighting fires has gone up," said Debbie Miley, executive director of the National Wildfire Suppression Association (NWSA), a trade group for private wildfire fighters. "We believe that they should apply for that funding after it's spent versus having it up front."
In fiscal year 2014, the Forest Service spent about $1.2 billion on fire suppression, and more than 40 percent of that—$502 million—went to private contractors, according to Jones. That includes the ground crews and other service providers represented by the NWSA, as well as more than $300 million for contract air tankers and helicopters. (it doesn't include contracts with other agencies or states). Contractors are relied upon to fill in when government staff and resources have been stretched thin.
But why are fires getting so much worse in the first place? Within our lifetimes, fire seasons have grown much longer (not just in the U.S., but across the globe). The size and severity of those fires has increased with climate change as drought and hazardous fuel buildups have turned whole states into tinderboxes.