WASHINGTON — The National Flood Insurance Program has lurched along for more than a year as lawmakers on Capitol Hill have deadlocked over how to overhaul the debt-laden federal program that underwrites most of the nation’s flood coverage.
But Louisiana’s lawmakers are looking forward to January, optimistic that fresh blood on key congressional committees will crack the gridlock.
Politicians and lobbyists say retirements and a new Democratic majority in the House will likely favor Louisiana homeowners and flood-threatened communities when lawmakers hash out major changes to the program, which is tens of billions of dollars in debt after massive payouts following a series of catastrophic hurricanes dating back to Hurricane Katrina in 2005.
Gone will be U.S. Rep. Jeb Hensarling, a Texas Republican who’s used his control of the House Financial Services Committee to push for rate hikes on subsidized NFIP policyholders and far tighter rules on high-risk homes. The Texan is retiring from Congress at the end of the year.
U.S. Rep. Maxine Waters, a California Democrat who’s focused more on keeping flood premiums affordable for homeowners, is set to take over the committee gavel and steer the rewrite of the program.
“We probably couldn’t ask for more motivated and informed leadership than Maxine Waters right now,” said Michael Hecht, the president of Greater New Orleans Inc., a regional economic development group which leads a national lobbying effort on flood insurance issues.
A deadline to extend the National Flood Insurance Program or risk a lapse in its authorization looms on Nov. 30. Those who spoke with The Advocate anticipate a short-term deal to extend the program into 2019.
The potential stakes of changes in the insurance program could have major consequences for homeowners in south Louisiana, where frequent flooding leaves many reliant on NFIP-backed coverage.
Hensarling and a handful of allies over the past year have aimed at the program's built-in subsidies, arguing that the federal government should jack up rates on homeowners to reflect the actual risk of flooding and deny coverage to some particularly high-risk properties altogether.
Those changes, lawmakers from flood-threatened areas like Louisiana have argued, would make insurance unaffordable for many families. That in turn could drive down property values and wipe out home equity in high-risk areas, including large swaths of Louisiana.
That nearly played out after Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012, which sought to unwind some of the NFIP’s subsidies for high-risk homes and properties that had flooded multiple times.
The changes would’ve dramatically hiked rates on many Louisiana policyholders. The resulting political backlash led Congress to roll back many of the Biggert-Waters changes before they ever went into effect.
Hecht, the GNO Inc. president, said Waters learned a lot from the failed modifications that bore her name. The California congresswoman, Hecht said, reached out to groups in flood-hit areas like New Orleans to learn how to avoid unintended consequences like astronomical premiums in future reform efforts.
Hecht said destructive floods across the country in the years since the Biggert-Waters act have also built more political support for a flood insurance program that prioritizes affordable coverage.
Louisiana’s congressional delegation has pushed for reforms designed to draw more property owners into the program — shoring up its finances with more premium dollars — and for additional federal investment in flood protection to cut down on future payouts.
Among the policies Hecht’s group is pushing is an opt-out default for NFIP coverage, meaning homebuyers would automatically purchase coverage unless they chose to opt out of the program. Hecht said he hopes a change like that would lead more homeowners — especially in low-risk areas — to buy into the program.
Louisiana lawmakers like U.S. Reps. Cedric Richmond, D-New Orleans, and Garret Graves, R-Baton Rouge, said they’ve spent much of the past year fighting against cutbacks pushed by Hensarling and his allies instead of what they consider positive reforms.
But Graves said Waters and Rep. Patrick McHenry, a North Carolina congressman who’ll likely take over as the top House Republican on the committee, seem much more interested in integrating flood prevention and focusing on affordability.
Having McHenry and Waters in charge of the bill in 2019 "would put Louisiana in a better spot than we are right now with Chairman Hensarling,” Graves said.
“The way you solve this,” Graves said, is by investing in flood protection projects, buying out frequently flooded properties and helping homeowners beef up defenses to cut down on payouts from future storms.
“It’s not to sit here and charge people unaffordable rates."
Waters is “going to be very supportive and she’s going to be great on flood insurance,” said Richmond, the state’s lone Democrat in Washington. “We’ll get it done.”
“Any new chairperson must recognize that people who live in flood zones rely on the NFIP for affordable, accessible insurance,” said Cole Avery, a spokesman for U.S. Rep. Ralph Abraham, R-Alto, “and any long-term reauthorization must meet those standards.”
Hensarling, the outgoing chairman, has been increasingly willing to cut a deal on flood insurance as his time remaining in Congress dwindles, according to multiple congressional aides familiar with negotiations.
But a wide gap remains between Hensarling’s vision for the NFIP and the sort of changes being pushed by coastal lawmakers, sources said. With a packed calendar and friendlier leadership arriving in January, there’s almost no chance of major modifications to the flood insurance program this year.
GOP Whip Steve Scalise, of Jefferson Parish, the No. 2 Republican in next year’s Congress, tried to hammer out a deal with Hensarling over flood insurance.
A compromise Scalise struck to soften many of Hensarling’s changes passed the House of Representatives a year ago but went nowhere in the U.S. Senate, where coastal lawmakers hold much more power.
In a statement, Scalise said he’ll continue fighting for affordable flood coverage. He also noted that flood insurance issues don’t line up neatly along party lines.
“Anywhere it rains, there is a risk of flood. NFIP is not a partisan issue and the reforms we have long sought cut across party lines. In fact, I’ve enjoyed strong bipartisan working relationships with members of both parties in the House and Senate,” Scalise said.