Hurricane Helene recovery could cost $34 billion. Here’s who might pay

Hurricane Helene could cause as much as $34 billion in damage in southeastern U.S., according to early estimates Moody's analyze.

Congress may have to foot the bulk of the bill as the private insurance industry erodes in some affected areas.

“I wouldn't be surprised if Helene causes trouble for the insurance market again,” Moody's chief economist Mark Zandi told CNBC.

Over the past week, towns and cities in Florida, Georgia, North Carolina, South Carolina, Virginia and Tennessee have been devastated by uprooted trees, 140 mph winds and massive flooding.

As of Thursday, the storm had killed more than 200 people and left hundreds missing. Nearly 1 million people remain without power.

A Moody's report issued last week when Helen made landfall estimated that property damage could be as high as $15 billion to $26 billion.

The resulting economic slowdown could cost $5 billion to $8 billion in lost productivity.

Zandi told CNBC that these initial estimates are low and will likely be revised higher as the storm's full damage becomes apparent.

Most of the damage caused by Helen was caused by storm surge and river flooding.

Insurance Information Institute spokesman Mark Friedlander said that means flood insurance, not standard property insurance, should cover the losses.

That's a problem, Friedlander said, because “many of the hardest-hit areas in the Southeast and southern Appalachia have very low flood insurance coverage.”

Although 90 percent of natural disasters involve flooding, only about 6 percent of U.S. homeowners have flood insurance through private companies or the Congressional-funded National Flood Insurance Program, he said.

The Federal Emergency Management Agency, which has been operating under a tight budget for the last year, has been coordinating Helen's recovery efforts.

On August 7, the Federal Emergency Management Agency triggered an “immediate need for funds” status due to insufficient funds in the disaster relief fund.

That means the agency will only use funds to respond to immediate disasters and pause long-term reconstruction efforts across the country.

On Tuesday, FEMA received a much-needed cash infusion of $20 billion after Congress passed a temporary appropriations bill.

But as administration officials assess the overall damage to Helen, they say there is a growing need for Congress to pass a supplemental disaster relief funding package, which has been removed from the interim spending resolution.

With Congress on recess until November 12, this may take some time.

President Joe Biden said on Monday that he “may have to ask” Congress to come out of recess early and return to Washington to pass additional disaster relief funding, a rare move.

Several lawmakers from affected states, including Rep. Willie NickelThe Democratic National Committee echoed the call late Monday, urging their colleagues to return to Capitol Hill to vote in favor of the funding.

Sen. Rick Scott, R-Fla., agreed but said Congress should return after the Federal Emergency Management Agency provides a firm amount of funding needed.

Rep. Mark Amodei, R-Nev., told CNBC he doesn't think Congress needs to come out of recess early because the Federal Emergency Management Agency is still evaluating its initial funding request.

“As long as you have the number, we can handle it,” Amodai said. “Now, you're shooting at a moving target? In fact, you're shooting at an unknown target.”

“I don't expect what that number will be when FEMA does its assessment because it's going to be a huge number,” Amodei added.

Meanwhile, other federal leaders are doing their best to assist.

Federal Reserve Chairman Jerome Powell said on Monday that the central bank is working to ensure that banks in affected areas have enough cash “so that if the power outage is prolonged, there will be enough cash to conduct transactions.”

“Obviously, we're mostly in a wait-and-see mode,” Powell told a National Association for Business Economics panel. “Sympathy for the very difficult situation that people are in.”