WASHINGTON — Members of Congress are eyeing yet another temporary extension of the National Flood Insurance Program as a deadline to avoid a lapse looms at the end of July.
Louisiana lawmakers are pushing a four-month extension through the end of November for the NFIP, a debt-laden federally run program that underwrites most flood coverage in the U.S. The deal would extend the program through hurricane season and the midterm elections.
Most expressed confidence that NFIP policyholders wouldn’t face a lapse in the program. No new policies can be issued during a lapse — something that would bring real estate sales in flood-prone areas (including much of south Louisiana) largely to a halt — and those with expiring policies would face difficulties renewing their coverage.
“I think we’re cautiously optimistic that Congress will pass an extension,” said Tom Santos, vice president for government affairs at the American Insurance Association, a trade group representing insurance firms. “There seems to be a general acceptance that we cannot let the program lapse at the end of the month.”
Both chambers of Congress would need to pass an extension. House Majority Whip Steve Scalise, R-Jefferson, said he’s eyeing to bring the four-month extension to a vote early this week. Louisiana Sens. Bill Cassidy and John Kennedy, both Republicans, said they’ve been lobbying their colleagues in the Senate to sign off on an extension, with all but a couple of holdouts so far on board.
Kennedy told Bloomberg last week that he’d use his considerable ability as a senator to cause chaos in Congress as leverage if needed to force an extension of the program.
“I will raise more hell than they can possibly imagine,” Kennedy said.
The focus on yet another months-long extension for the NFIP — lawmakers have already passed six short-term deals since the program came up for renewal in September — points to a continuing standoff over long-term changes.
Caitlin Berni, who represents Greater New Orleans Inc.’s Coalition for Sustainable Flood Insurance, said she’s expecting Congress to pass a four-month extension, averting a lapse. Although the coalition has lobbied for a number of consumer-friendly changes to the NFIP, Berni said, any reforms to the program have taken a back seat to keeping it running smoothly through hurricane season.
“It was definitely getting close (to the deadline) and now we very likely won’t have to worry about a lapse,” Berni said.
Politicians largely agree that the program, currently saddled with billions of dollars of debt and drawn-out claims processes, needs major changes. But there are deep divides over how the NFIP should be reformed — with little progress on Capitol Hill over the past year on hammering out a compromise.
Pressure to tackle such issues mounted after hurricanes Harvey, Irma and Maria in 2017 caused billions of dollars in damage to NFIP policyholders. The massive losses came a year after floods in Louisiana and Hurricane Matthew triggered billions more in payouts. Congress forgave $16 billion in debt the NFIP owed to the U.S. Treasury in October to free up credit for the cash-strapped program to continue paying claims.
A cadre of Republican fiscal hawks, led by retiring House Financial Services Chairman Jeb Hensarling, R-Texas, want to shrink the program, eliminate subsidies for some high-risk homeowners and do more to aggressively hike rates on properties that flood repeatedly. Those changes would likely hit many south Louisiana homeowners with substantial premium increases and potentially exclude others from the program entirely.
Lawmakers from flood-prone areas, including Louisiana's congressional delegation, have acknowledged that changes need to be made to put the NFIP on better financial footing. But they’ve sought to protect homeowners from steep rate increases and have argued that convincing more homeowners to buy policies would help stabilize the program.
Louisiana’s delegation has also pressed for more investment in flood-protection projects to cut down on future risk.
Hensarling initially pushed for a number of policy changes as part of any temporary flood insurance extension. But the influential Texas Republican dropped those demands on Thursday and signed onto a simple four-month extension, according to congressional sources with knowledge of negotiations.
Lawmakers from Louisiana and other flood-prone states have been loathe to make piecemeal changes to the program, preferring to hammer out any tweaks in broader negotiations instead of make concessions without anything in return.
“We’re trying to find a way to get a longer-term renewal of the program,” said Scalise. “But in the meantime, I’m committed to making sure the program doesn’t expire.”
Scalise, who’s been negotiating with Hensarling for months, said he’s insisted that any short-term extension to the NFIP run through the end of hurricane season. Some other lawmakers had argued for a shorter extension in order to keep pressure on negotiations over long-term changes.
Although an extension through Nov. 30 would lift the threat of a lapse in the program and buy more time for negotiations, it’s unclear whether Congress would be any closer to a long-term deal on flood insurance.
Campaigning ahead of November’s midterm elections is expected to consume much of lawmakers’ time over the coming months. An all-out fight over confirming Supreme Court nominee Brett Kavanaugh, President Donald Trump’s pick to replacing retiring Justice Anthony Kennedy, could also eat up time and attention.
The results of the midterm elections, meanwhile, could change bargaining positions. Hensarling, who’s brawled with Louisiana lawmakers for years over the program, will be gone from Congress at the end of the year. So too will retiring House Speaker Paul Ryan, R-Wisconsin.
Even bigger leadership changes would be in store if Democrats take control of the House of Representatives (something some political pundits are projecting) or the U.S. Senate (a less likely outcome).
Congressional sources and lobbyists told The Advocate they expect another short-term extension in the fall, taking the program through January or into the spring.