Hurricane Sandy has brought billions of dollars of loss and damage to the Northeast — how many billions, is still unknown. Many individuals, families, and businesses suffered losses that they can't handle. Most will be turning to the government for help. But the government, it turns out, is also unprepared. The National Flood Insurance Program (NFIP) expects flood claims to exceed its statutory reserves. Uninsured properties may be eligible for emergency grants and loans from the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA). But those agencies also expect the need to exceed their current funding appropriations — again, by an unknown amount.

The Chicago Tribune carries this report on FEMA's funding gap: ("FEMA may seek flood insurance bailout after Sandy," by Sarah N. Lynch/Reuters). "The National Flood Insurance Program, a FEMA subsidiary, has $2.9 billion in borrowing capacity but expects Sandy-related losses of $6 billion to $12 billion, Edward Connor, FEMA's deputy associate administrator for federal insurance, told a meeting of the Federal Advisory Committee on Insurance," says the story.

FEMA relies on private insurance companies to write and administer the flood policy, but the agency is on the hook for any payouts, with no private backers. FEMA official Connor called the expected losses from Sandy "staggering," and said, "we know that with the way the claims are coming in now, the burn rate, that we expect that probably by the end of this month we are going to have to tap into our remaining $2.9 billion to pay the claims."

Insurance news website Property Casualty 360° reports that the Administration will shortly ask Congress to boost the NFIP's borrowing authority by more than $4 billion to help cover Sandy losses ("President to Ask for NFIP Borrowing Increase," by Arthur D. Postal). ""This is not an entitlement program," insurance underwriting executive Steve Harty commented. "This is a contract with the American people. But if the NFIP is going to stand up and deliver on those insurance contracts, it will need additional borrowing authority."

Insurance is only part of the picture: FEMA also has disaster assistance funds on hand to address the catastrophe. But given the scale of the disaster in the Northeast, Congress is already talking about adding to the kitty. Leading the effort are lawmakers from the Gulf Coast region, where memories of Hurricane Katrina are far from faded. The Jackson (Mississippi) Clarion-Ledger has that story ("Gulf Coast lawmakers pushing for more aid for Sandy victims," by Deborah Barfield Perry). Louisiana Senator Mary Landrieu, who chairs a Senate appropriations committee for Homeland Security, is pushing for a supplemental appropriations bill to help Sandy victims, the paper reports. Landrieu said, "This is going be a long road for the Northeast. This is likely going to be an incredibly costly recovery, and we will need additional funding."

A spokesman for Mississippi Senator Thad Cochran, ranking minority member of Landrieu's committee, said the Republican plans to work with colleagues on aid to states hurt by Sandy. "Having worked through major disasters affecting Mississippi and the Gulf Coast, the senator understands the hardships being experienced by the people whose lives have been disrupted by this major storm," Chris Gallegos, a spokesman for Cochran, said Thursday.