* Bill has $9.7 billion for flood insurance claims
* Vote on remainder of $60 billion plan set for Jan. 15
* Republicans seek to "take out the pork"
By David Lawder
WASHINGTON, Jan 4 (Reuters) - The U.S. Congress on Friday approved $9.7 billion in initial relief for victims of Superstorm Sandy, but New York and New Jersey lawmakers seethed over delays in passing the rest of a $60.4 billion federal aid package.
The House of Representatives voted 354-67 to keep the National Flood Insurance Program solvent and able to pay claims of thousands of homeowners who suffered flood damage in coastal New York, New Jersey and Connecticut from the October storm.
The Senate then quickly passed the measure by voice vote, and it now moves to President Barack Obama to be signed into law on his vacation in Hawaii.
House Speaker John Boehner drew scathing criticism this week - including blasts from New York and New Jersey Republicans - when he canceled a House vote on the full $60.4 billion aid package passed by the Senate.
The frustration continued on Friday as lawmakers from both parties complained that the flood insurance infusion would do little to help the bulk of those suffering more than two months after the devastating Oct. 29 storm.
"It took only 10 days after Katrina for President (George W.) Bush to sign $60 billion in Katrina aid," said New Jersey Democratic Representative Bill Pascrell, referring to the 2005 hurricane that devastated the Gulf Coast. "How dare you come to this floor and make people think everything is OK."
Boehner, re-elected on Thursday for another term as House speaker, canceled the earlier vote on the full Sandy aid package amid Republican discontent on Tuesday over the "fiscal cliff" deal. That legislation prevented tax hikes on most Americans but did not achieve the significant spending cuts House Republicans wanted.
An aide to Boehner said Tuesday night was "not a good time" to hold a vote on another massive spending bill.
But after coming under fire from Republicans, including Representative Peter King of New York and New Jersey Governor Chris Christie a potential presidential contender for 2016, Boehner scheduled Friday's vote on the piece of the package.
He also promised a second vote on Jan. 15 for the remaining portion of nearly $51 billion in aid. The House is not in session next week.
"This is a crisis of unimaginable proportions," King said. "If you saw the suffering that's going on, if you saw the people who don't have food and shelter, you'd realize how horrible this is."
The federal flood insurance program will run out of money next week to pay claims without the $9.7 billion increase in borrowing capacity, the Federal Emergency Management Agency said.
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 Hurricane Katrina in 2005, and it is nearly $20 billion in debt.
The 67 votes against the bill stemmed largely from Republican discontent with the lack of reforms to keep the flood insurance program solvent.
Among these were Wisconsin Representative Paul Ryan, the 2012 Republican vice presidential candidate, who said in a statement it "would be irresponsible to raise an insolvent program's debt ceiling without making the necessary reforms."
Standard homeowners' insurance does not cover flooding. The government set up its flood insurance program in 1968 to provide affordable insurance, impose flood management policies on vulnerable communities and reduce federal disaster aid costs.
Critics of the program complain it is inefficient and say it subsidizes people who live and build in dangerous and environmentally sensitive flood zones.
While Friday's vote will ensure that claims by more than 100,000 homeowners will be paid, there are hundreds of thousands of other homes and businesses destroyed by Sandy that did not have flood insurance. Owners of many of these structures will depend on disaster aid distributed through community development block grants proposed in the remainder of the aid package.
But when the House returns to consider this portion on Jan. 15, Republicans bent on cutting spending will have a chance to vote for a smaller amount. The package will be considered in two parts - about $17 billion for immediate needs and another $33 billion for longer term projects.
Senator Charles Schumer, a New York Democrat, said he is concerned about a fight over Republican plans to shrink the bill or restrict access to aid that were not in an earlier, Senate-passed version.
"We're worried," Schumer said, adding that he was now hoping that Obama could sign the full package into law by the end of January. The Senate returns from a recess after Obama's inauguration on Jan. 21.
Republican aides said the House bill also will delete some items that party members say are unrelated to storm damage in the Northeast, such as funds for fishery replenishment in Alaska and the Gulf Coast.
"We need to get the pork out," said Representative Darrell Issa, a California Republican, who called for negotiations with the Senate to resolve differences in the two aid packages before the Jan. 15 vote.