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The National Flood Insurance Program is in limbo, on the cusp of either another expiration or short-term extension without any reforms to the debt-ridden program, which would kick the issue down the road for a lame-duck Congress to navigate.
The latest extension debate has unveiled some major political fault lines, with a key House member openly taking the Senate to task for its inaction on the program and stakeholders taking diverging positions on short-term extension bills.
The NFIP will expire Tuesday if Congress does not authorize an extension of the program, meaning that new policies cannot be written after that date and existing policies cannot be renewed.
The U.S. House of Representatives approved a straight extension of the program to Nov. 30 on a 366-52 vote Wednesday. The bill now moves to the Senate, where it is expected to be moved under unanimous consent procedures, although one senator can block such approval.
“To push meaningful reform through, you need more time than a few weeks,” said John Dickson, president of NFS Edge Insurance Agency Inc., an affiliate of Aon National Flood Services, in Kalispell, Montana. “The path that they’re on is the right path. Rather than doing something slipshod or something that is not fully thought through, extend as is and then continue to have the conversations about what that meaningful reform looks like.”
But the conservative think tank The R Street Institute expressed deep disappointment in the House vote and lobbied for the Senate to reject the extension because it does not have any reforms.
R.J. Lehmann, director of finance, insurance and trade policy in Washington for R Street, which is a member of the SmarterSafer coalition advocating for reforms to the NFIP, noted that a straight extension means that a lame-duck Congress would likely be deciding the future of the program as it nears another expiration.
“We don’t know what the partisan makeup of Congress will look like at that point,” he said. “From a free market perspective, if the Republicans were to lose control of either or both chambers of Congress, I would certainly advise them to take action in the lame duck.”
The House vote was not without controversy as House Financial Services Committee Chairman Jeb Hensarling, R-Texas, took to the House floor to criticize the Senate’s inaction on a reform package passed by the House in November.
“Never underestimate the Senate’s capacity to do nothing and unfortunately the Senate has done nothing,” he said, adding that the Senate may not even take up the straight reauthorization.
Senate leaders have ruled out a vote on the House reform package, but have not specified what they prefer, Mr. Lehmann said.
Reps. Ed Royce, R-Calif., and Earl Blumenauer, D-Ore., had introduced H.R. 6402, the National Flood Insurance Program Extension and Enhanced Consumer and Community Protections Act of 2018, which would have required communities to identify areas and facilities repeatedly damaged by floods and develop community-specific plans for mitigating continuing flood risks to such repetitively flooded areas and to submit the plan and any updates to the administrator of the program.
“We need to push more opportunities to do predisaster mitigation where we know we have these repetitive losses and risks,” said Mark Misczak, senior managing director at crisis and emergency management firm Witt O’Brien’s and a former official with the Federal Emergency Management Agency in Washington.
The bill represented “a set of the least controversial reforms, the lowest-hanging fruit,” Mr. Lehmann said. “The Senate will not take it up.”
The NFIP has come up for reauthorization 41 times in the past two decades, and it has been extended without any reforms 38 times. But several House bills have attempted to implement some flood risk management reforms.
In April, the House on a 393-13 vote adopted H.R. 4, the FAA Reauthorization Act of 2018, which included Title 6 provisions of the Disaster Recovery Reform Act that would reform FEMA in ways that could aid flood preparation and mitigation efforts going forward, such as ensuring that a portion of disaster assistance provided in the wake of catastrophes be invested in hazard mitigation to prevent future disasters, experts say.
“The most important thing that it does is it provides money for five years in a row so it doesn’t go bankrupt, which it does every year as it stands today,” said Alan Rubin, a New York-based principal and member of Blank Rome L.L.C.’s severe weather emergency recovery team. “The second part of it is it redefines floodplains and how they need to be addressed and how they need to be redeveloped. It would not allow for the kind of thing that happened in Houston, where they just kept building in old floodplain areas and cementing over it. It rates areas by how many times they’ve flooded and whether it’s recurred and how many times it has recurred. It evaluates and grades the floodplain and charges more money per cost for insurance in the areas where it has flooded longer.”
But those provisions have not been taken up by the Senate, as the issue of charging more for insurance based on the repetitive nature of flooding remains a sticking point, he said.
“That’s the big problem,” he said. “But they’re going to have to do something. It’s my opinion that they will pass it in some form — not quite as draconian as it is in the bill today, but when the Senate and the House goes into conference they will make it better or different.”
Mr. Dickson and Mr. Rubin both predicted NFIP will be extended.
“I do think Congress is well aware that a lapse doesn’t benefit anybody,” Mr. Dickson said. “It’s not an appropriate vehicle to play political chicken with.”
“They cannot have a massive storm come sometime in October with the elections in November and be bankrupt and not have money available to take care of things or have difficulty declaring national disasters,” Mr. Rubin said. “No one wants that in the administration today, because it would just make them look terrible.”
President Donald Trump signed an omnibus spending bill on Friday to fund the federal government through the end of the fiscal year and extend the National Flood Insurance Program through July 31 despite threatening to veto the bill earlier in the day.