The flood insurance program will run out of money to pay claims for Hurricane Sandy and other disasters in coming days unless Congress lets it borrow more funds, the national emergency agency said on Thursday.
The warning from the Federal Emergency Management Agency(FEMA) came a day ahead of a vote by the House of Representatives on a $9 billion payment on storm-related support for the National Flood Insurance Program.
House Speaker John Boehner reversed course and scheduled Friday’s vote after fellow Republicans from states hit hard by the October 29 storm slammed him for failing to bring the payment up for a vote earlier this week.
FEMA has told Congress that unless its borrowing ceiling was raised, “funds available to pay claims will be exhausted sometime around the week of January 7, 2013,” the agency said in a one-sentence statement.
The FEMA program is essentially the only U.S. flood insurer for residences. It has a $20.8 billion ceiling for borrowing authority.
FEMA estimated Sandy-related flood losses of $6 billion to $12 billion in November, far beyond its cash and $3 billion in untapped borrowing authority.
The House will hold a second vote on January 15 on the $51 billion remainder of the $60 billion Sandy disaster aid package approved by the Senate last week.
Putting more money into the program would come months after President Barack Obama signed a law aimed at improving its finances. Congress bailed out the program after Hurricane Katrina in 2005, and it is $18 billion in debt.
Sandy, the second-costliest storm in U.S. history, devastated the northeastern United States, with New York and New Jersey the hardest-hit states.
Read more at REUTERS