Flood insurance program reforms likely to be put on Congress’s back burner

[ Originally published on this site as post ]

The National Flood Insurance Program, the only means by which homeowners can protect against flooding from a natural disaster, is in need of drastic reform. The program essentially encourages continued development in flood plains by providing low-cost premiums, and is already in debt from previous flood emergencies. It has to be reauthorized by Congress by the end of September to continue, and that reauthorization is not going to include any reforms.

The NFIP has over 5 million policyholders insured for flooding damage and is already burdened with $24.6 billion in debt, largely from the damaging and expensive aftermath of major natural disasters like Hurricanes Katrina and Sandy. That number is sure to rise dramatically due to the mass flooding in Texas, where some places have already seen 42 inches of rain. Meanwhile, there are complaints that policies are unaffordable as a tiny number of homes rack up huge bills from repeat claims.

Both Republicans and Democrats in Congress agree the insurance program needs major reforms, and several competing proposals have been floated across the House and Senate. But Senate Banking Committee staff told BuzzFeed News that dealing with the fallout from Harvey is pushing back those discussions.

“There really isn’t any path that’s ahead of the other right now. There’s a lot of discussion right now, but they’ve been kind of put on the backburner,” a Republican staffer said. […]

The high price tag expected from Harvey-triggered claims highlights some of the basic problems of the federal flood insurance program: Current policy rates do not accurately reflect flood risk, the flood maps used by the program are outdated, and not enough people are covered by the program, among other reasons.

Let’s be honest about this—with less than two weeks of actual working days in Congress next month and the huge lift that they’re already facing in what will be a legislative month from hell, there’s no way Congress was going to pass major reforms to the program before it expires at the end of the month. Even if this Congress was one that did things, this is too big of a haul, even if it wasn’t in the middle of the Harvey crisis.

That’s not going to keep Texas Rep. and Financial Services Committee Chair Jeb Hensarling from trying, though. His committee has a bill that would raise premium rates—a good idea—and shrink the scope of the insurance program—a bad idea—while reauthorizing it for the next five years. That’s a plan that probably wouldn’t get through the Senate, provided it made it through the House in the midst of this disaster.