Key House Chairman Wants Flood Insurance Reforms, Not Just Renewal
A key Republican said Hurricane Harvey will spur Congress to reach a deal to fund the nation’s flood insurance program before it expires next month, even though divisions persist over how much the federal government should be on the hook for future disasters.
“I’m just hopeful this will provide the urgency and onus to get this bill on the floor,” Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services said in a phone interview Monday. “We need to make sure we don’t compound a physical tragedy today with a fiscal tragedy tomorrow.”
The devastating storm in Texas has put a spotlight on the National Flood Insurance Program, which requires the government to foot the bill for most of the water damage done to residential properties. It’s already running a deficit of more than $25 billion and Harvey’s costs are expected to exceed tens of billions of dollars.
While Congress has until Sept. 30 to reauthorize the program, lawmakers have been at loggerheads over how to make the program economically sustainable without increasing costs for homeowners.
Hensarling’s committee has approved measures that call on private insurers to play a bigger role in the market, which critics have argued will make coverage more expensive and less available. The Texas lawmaker said that most disagreements have been worked out and that he is not in favor of Congress passing a temporary extension of the current flood insurance program because doing so would hurt taxpayers.
“I just don’t think a short-term re-authorization bill gets the job done,” he said.
In the Senate, several lawmakers from coastal states are teaming up to craft a bipartisan bill. Senators John Kennedy, a Republican from Louisiana, and Robert Menendez, a Democrat from New Jersey, have proposed a measure that would reauthorize federal flood insurance for six years, while freezing interest payments on accrued debt from the program that’s owed to the U.S. Treasury. Freezing the interest payments would free up funds to help mitigate costs from future disasters, according to the senators.
The Senate Banking Committee, which oversees funding for the flood insurance program, hasn’t taken up its own bill on the issue. Ohio Senator Sherrod Brown, the top Democrat on the panel, said a short-term extension is likely if a deal can’t be reached.
“It is too early to determine how hurricane Harvey will impact the timeline,” Brown said in an emailed statement. “But it is likely that Congress will pass a short-term extension to ensure the program doesn’t lapse.”
In the near term, Brown’s prediction is the most likely outcome because disagreements on how to proceed on a broader bill are probably too severe to be resolved quickly, said R.J. Lehmann, a senior fellow at the conservative R Street Institute.
“Harvey should make it clearer that the way we’ve been doing things has not been sustainable and changes need to be made,” Lehmann said. “But lawmakers are not going to want to whack people who are already suffering from the hurricane with more costs.”