Among the 2,232 pages of the omnibus spending bill under consideration in Congress this week is a provision extending the National Flood Insurance Program until July 31.
That may sound like a minor tweak, but in effect the date change would separate renewal of the NFIP from the general renewal of government funding, giving lawmakers more incentive to tackle serious reform efforts. The Congressional Budget Office last fall said the NFIP faces a $1.4 billion annual shortfall.
When NFIP renewals are tied to government funding deadlines, “it’s very easy to just keep kicking the can, because it just gets wrapped in, it’s just another thing to add to the pile of stuff,” says R.J. Lehmann of the R Street Institute, an expert on the program. “Because they changed the date, this has a standalone date that isn’t tied to the rest of the resolution,” according to Lehman, “Congress has to do something about this before July 31.”
Rep. Sean Duffy, R-Wis., agrees. “I am pleased that the NFIP extension was decoupled from the government spending extension,” Duffy, a proponent of free-market reforms to the program, told the Washington Examiner on Thursday. “When NFIP was tied to government funding, it was punted over and over with no reforms. I am hopeful that this puts pressure on the Senate to actually work on a bill so that we can restore solvency to the NFIP.”
“The Trump administration has taken cues from the House-passed bill and is implementing provisions on their own as a result of inaction in the Senate,” he added. “This should send a clear signal to the Senate to act with a sense of urgency for the sake of saving the NFIP.”
The House in November passed a bipartisan overhaul of the program that would open the government-controlled flood insurance market to private competition. But NFIP reform can be controversial, causing conflict with some coastal Republicans who worry about how privatization efforts would impact their constituents. In September, Louisiana’s GOP Sens. Bill Cassidy and John Kennedy successfully removed part of the legislation passed by the lower chamber in November from an Federal Aviation Administration reauthorization bill.
The Senate has yet to take up the House’s legislation. And even with the date change, it’s not impossible reforms will again be pushed off.
“It could be that they just extend it again without making reforms. That’s not out of the realm of possibility at all,” Lehmann notes. “But it creates an action that’s necessary, and by having that you open the door for a real process.”
Lehmann believes the omnibus provision wouldn’t have been added “unless there was at least an agreement to try to do something” on the part of leaders in the Senate.
As far as what to expect from potential reform legislation this summer, he points to efforts targeting repetitive loss properties, which account for a disproportionate amount of the program’s costs, and “language making more clear that private flood insurance would count for the federal mortgage lending requirements.”
“Both of those measures have been controversial in the Senate, which is why we have not had anything happen in the Senate,” Lehmann explains.
The House passed the omnibus legislation on Thursday afternoon.
