WASHINGTON — The National Flood Insurance Program would get a four-month reprieve as part of a massive $1.3 trillion federal spending deal making its way through Congress, the fourth temporary extension of the program since September.
But lawmakers on Capitol Hill now face a July deadline to either overhaul the NFIP, extend it again — or let it lapse in the midst of hurricane season.
That could put added pressure on Congress to hammer out a deal on how to shore up the debt-laden, federally run insurance program. A compromise on the program has so far been elusive.
Negotiations between budget hardliners and coastal lawmakers have yielded little in the way of progress over the past few months and legislation to overhaul the program has languished in the U.S. Senate.
Along with the NFIP extension, the massive omnibus spending bill also includes substantial increases in the amount of funding set aside for flood-risk mapping by the Federal Emergency Management Agency (FEMA) and millions more dollars for flood-mitigation projects. The spending bill would fund the federal government through the end of September.
The U.S. House of Representatives passed the package on Thursday afternoon and it appears to have enough support in the U.S. Senate to pass, despite criticism from lawmakers of its $1.3 trillion price tag and the hurried, closed-door manner in which it was written.
The NFIP, the federally run insurer that provides flood coverage to the vast majority of at-risk property owners, requires periodic congressional reauthorization. A series of destructive storms and floods, beginning with Hurricane Katrina in 2005, have forced the program to rack up tens of billions of dollars of debt to pay claims, leading to calls for substantial changes to how it’s structured and run.
Budget hawks have pushed changes to the NFIP that would dramatically raise rates on many high-risk homeowners who currently pay below-market premiums and shrink the program by booting some properties that have repeatedly flooded.
Lawmakers from flood-prone areas — including Louisiana's congressional delegation — have fought furiously against most of those proposals, concerned about how those kinds of abrupt reforms could wipe out homeowner equity and put flood coverage out of reach of many constituents.
Better funding for flood-risk mapping has long been a priority of many coastal lawmakers. More accurate flood maps would allow the NFIP to better calibrate a property or community’s risk of flooding, proponents argue, and could also guide investments in levees or other flood-control projects and serve as useful planning tools for local governments plotting new developments.
The proposed funding hikes for mapping and mitigation would be the largest in at least a decade, said Laura Lightbody, director of the Pew Charitable Trusts' project on weather-related catastrophes.
Rep. Garret Graves, R-Baton Rouge, and other Louisiana lawmakers welcomed those extra dollars. Graves said he’s long advocated for federal flood policy that moves from being “reactive to proactive,” putting more money into projects to cut down the potential cost of future disasters.
Lightbody pointed to recent research suggesting that every dollar invested in mitigation projects could avoid six dollars in future damages. She said the destructive 2017 hurricane season — which cost the federal government well over $100 billion and local governments, residents and businesses billions more — “was a wakeup call that we need to be investing before disaster strikes.”
The July 31 expiration set within the proposed extension of the NFIP provoked mixed reactions from Louisiana’s congressional delegation and policyholder advocates. The date comes during hurricane season, raising the stakes considerably on negotiations. Failure to pass a reauthorization would lead to a lapse in the program, preventing the NFIP from renewing or issuing new flood policies and posing serious potential problems for processing new claims.
Graves, an outspoken voice in Congress on flood insurance, said the new July 31 deadline could give critics of the program — led by retiring House Financial Services Chairman Jeb Hensarling, R-Texas — more leverage to push through changes to the program that would end up hurting south Louisiana policyholders.
“I don’t think that they’re pursuing the right policies on this,” Graves said.
Hensarling — whom Rep. Cedric Richmond, D-New Orleans, has called “an obstacle” on flood insurance issues — is retiring at the end of the year and Louisiana lawmakers have expressed hope that his as-yet unnamed replacement as chairman will be a more flexible negotiator.
But others were more hopeful that the looming deadline and Senate resistance to some of Hensarling's proposals could result in a more favorable long-term deal on the program.
“There’s always a deadline looming. We averted another shutdown of the program today, but that means there’s another one coming until we get a five-year reauthorization,” said House Majority Whip Steve Scalise, R-Jefferson. “I want to see the Senate move.”
Scalise brokered a compromise with Hensarling in November that led to House passage of a flood-insurance bill in November. The bill has since stalled in the Senate, where it enjoys little support, and faced criticism from some other members of the Louisiana delegation, including Graves.
“There was some good and bad in that bill,” Scalise said Thursday afternoon as he made his way across the Capitol after voting on the package, “but the most important thing is certainty in flood insurance and making sure it’s affordable for families.”
The NFIP was initially set to expire at the end of September. But Congress has repeatedly punted on the issue with a series of short-term extensions tied to so-called "continuing resolutions" — or short-term deals to keep the federal government running.
Tying the NFIP's fate to government funding has given congressional leaders leverage to force through extensions of the program because derailing the broader package would result in a broader federal government shutdown.
But the July proposed extension would split the NFIP from must-pass budget bills, leaving less power for leadership to push rank-and-file lawmakers to back an extension or potential changes.
If Congress doesn't pass the $1.3 trillion spending bill by midnight on Friday, the federal government will shut down. Because of the tight timeline, any one senator could lodge a procedural objection that would push the final Senate vote on the bill past midnight and trigger a brief shutdown.
Sen. Rand Paul, R-Kentucky, did so on a similar short-term spending deal in February — causing a several-hour overnight shutdown — and hasn’t ruled out doing so again. Neither would Sen. John Kennedy, R-Louisiana, who said on Wednesday and Thursday he doesn’t want a shutdown but that the bill “sucks.”
The massive piece of legislation runs 2,232 pages and wasn’t released until late Wednesday evening. The House passed it 256 to 167 early Thursday afternoon.
Kennedy likened the closed-door way party leaders put together the bill to “mushroom management” — “keeping us in the dark and feeding us manure” — and called it “a Great Dane-sized whiz down the leg of every taxpayer in America.”
All the Louisiana Republicans in the House except Scalise, a member of leadership, voted against the package, decrying its overall price tag and its last-minute, rushed unveiling. Sen. Bill Cassidy, R-Louisiana, called the process “shameful” but, according to a spokesman, hadn’t yet determined whether to vote for the overall bill.
Scalise cited big boosts in military spending and funding for increased border security in the package. He also accused Democrats of dragging out negotiations over the week.