As Tennessee Copes With Flooding Disaster, FEMA Faces Own Financial Crisis

With a flooded Tennessee becoming the latest disaster to strike the United States, the Federal Emergency Management Agency is confronting its own emergency as its relief funds run perilously low.

Federal Emergency Management Agency (FEMA) Director Craig Fugate outlines his strategy to meet the challenges facing FEMA, Monday, Aug. 3, 2009, during an interview with The Associated Press, in Washington. (AP)

With a flooded Tennessee becoming the latest disaster to strike the United States, the Federal Emergency Management Agency is confronting its own emergency as its relief funds run perilously low.

Last month, FEMA Director W. Craig Fugate wrote a letter to Congress warning that its relief fund had fallen to $693 million as of April 7 but the agency owed $645 million to 47 states for past disasters. That doesn't include the $1.7 billion settlement the agency owes to the Gulf Coast state and city governments for Hurricane Katrina.

Now FEMA is handing out money to the residents of Tennessee after deadly floods ravaged the region last weekend.

FEMA has already approved $1.5 million in individual assistance and more than 12,000 Tennesseans had registered with FEMA for disaster assistance by midmorning Friday with 250 inspections complete.

White House spokesman Robert Gibbs said Friday that FEMA will probably need a shot of supplemental funding. The administration is seeking $5.1 billion in emergency funding from Congress.