White House Request for Sandy Aid Expected to Include Flood Insurance Funds

By and | November 28, 2012

The White House is expected in the coming days to send Congress a multibillion dollar request to fund recovery from Superstorm Sandy, which caused an estimated $71 billion in damages in New York and New Jersey.

Congressional aides said there was no clear indication of the request’s size, but some said it would likely be at least $11 billion.

The Federal Emergency Management Agency’s disaster relief fund had access to about $7.8 billion as Sandy slammed the U.S. East Coast on Oct. 29, causing widespread destruction in coastal New York and New Jersey.

Lawmakers and analysts also said Congress will need to shore up the heavily indebted National Flood Insurance Program in the face of $12 billion in payouts resulting from Sandy, ranked as the second-worst disaster in U.S. history.

U.S. Senate Majority Leader Harry Reid, asked about the additional Sandy funding request, said: “Well, we can’t do anything with the disaster aid package until we get something from the White House, and I’m told that will be here as early as tomorrow or the next day.”

A White House official declined to provide any details about the administration’s plans. “We are working closely with our partners in the states and in Congress, but it’s premature to speculate on specific actions as we work to ensure the governors have the necessary support,” the official said.

Lawmakers from both parties have voiced support for providing additional disaster relief in Sandy’s wake, but a massive funding request from President Barack Obama could be disruptive to already tense negotiations over year-end tax hikes and automatic spending cuts.

“It’s bound to be large, and we’ll need to scrub it carefully to determine real needs from wishful requests, which will take a little time,” a senior House Republican aide said of the funding package.

Representative Chaka Fattah, a Democratic member of the House Appropriations Committee from Pennsylvania, introduced a $12 billion emergency disaster relief bill four days after Sandy hit. No action has been taken on the measure, which is expected to be superceded by the White House request.

The White House official said that the administration has already obligated more than $1.9 billion to support Sandy response and recovery efforts. This includes $960 million in direct assistance to individuals affected by the storm.

On Monday, New York Governor Andrew Cuomo said the state will need $41.9 billion, including $32.8 billion for relief costs and damage repairs and another $9.1 billion to mitigate potential damage from future storms.

New Jersey suffered at least $29.4 billion in overall losses, Governor Chris Christie said on Friday.

Congress has routinely approved emergency supplemental appropriations to cope with unanticipated disaster relief costs, most notably for Hurricane Katrina in August 2005.

Two weeks after that storm flooded New Orleans, Congress approved $62.3 billion in disaster appropriations. It added another $29 billion by Dec. 30 after Hurricanes Rita and Wilma hit the Gulf Coast, and another $19.3 billion for those storms by June 2006. Supplemental appropriations for Katrina costs were still being made as late as 2010.


Lawmakers are expected to shore up the National Flood Insurance Program by raising its $20.8 billion borrowing authority ceiling, since it has a commitment to pay policyholders hit by Sandy.

The FEMA-run program is essentially the only U.S. flood insurer for residences.

Putting more money into the program would come months after Obama signed a law aimed at improving its finances. Congress bailed out the program after Katrina in 2005, and it is $18 billion in debt.

Senator Tim Johnson, a South Dakota Democrat and chairman of the Senate Banking Committee, will “closely monitor developments to make sure that the NFIP is able to meet its obligations and pay claims to policyholders,” a committee aide said.

FEMA has estimated Sandy-related losses of $6 billion to $12 billion. That is far beyond the insurance program’s more than $690 million in cash and $3 billion in untapped borrowing authority.

A spokeswoman for the White House’s Office of Management and Budget said that as of last week, FEMA had processed 133,461 flood claims from the storm and paid out $302 million.


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Latest Comments

  • November 29, 2012 at 11:35 am
    Libby says:
    Even if you purchase NFIP coverage, the limits are capped and in most cases won't cover the entire loss. For businesses, there is no business income coverage available under ... read more
  • November 29, 2012 at 11:31 am
    Skippy says:
    @ Dave; money is needed because, even though the NFIP covers flood losses, it is not based on actuarial sound rates for the coverage. The deficit position of the NFIP indicate... read more
  • November 29, 2012 at 9:50 am
    Libby says:
    You should read the article about NYC further down in this edition of IJ. Entire infrastructures are damaged and some buildings still do not have full power. This is more th... read more
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