Congress Struggling to Re-Up National Flood Insurance Program

With a heavy spring flooding season at hand, Congress is again struggling to renew and modernize a national flood insurance program that is $20 billion in debt and just had $16 billion in debt forgiven.

Source: St. Louis Post-Dispatch | Published on March 14, 2019

conceptual image of one hundred dollar bill and world map flooding by water. NASA world map image isolated layered and manipulated to use in this image,

Rep. Blaine Luetkemeyer, R-St. Elizabeth, Mo., has introduced several bills to reform the program, which covers more than 5 million policyholders.

Reps. William Lacy Clay, D-University City, and Ann Wagner, R-Ballwin, are also heavily involved in crafting a five-year reauthorization of the National Flood Insurance Program, which has been increasingly underwater, both financially and administratively, as mega-storms and spring flooding have caused hundreds of billions of dollars in damage since Hurricane Katrina.

All three St. Louis-area representatives are senior members of the House Financial Services Committee, which is spearheading efforts to modernize and reauthorize the program after years of passing short-term extensions of the current, failing program.

“It’s a long-term problem that we need to solve, instead of coming up with these short-term fixes,” Clay said. “We all represent different regions but in our region, our flooding is seasonal, It happens like clockwork. ... We need to approach this in a pragmatic way that resolves the issue.”

“The issue” is this: As flooding has increased, due in part to what some say is climate change, the 51-year-old NFIP has been unable to keep up. The insurance program, which is overseen by the Federal Emergency Management Agency, has had to increasingly borrow money to cover claims, while some homeowners have not been able to meet premium costs, and private and re-insurance markets have been unable to cover the gaps.

In addition, President Donald Trump’s administration is preparing to roll out a plan to rewrite how risk is assessed in the government’s plan that critics fear could increase premiums while covering less damage.

Hence, while the government is shelling out billions in disaster relief, its primary flood-insurance program is not keeping up. Given these problems, and others — including a paucity of accurate flood maps essential to calculating risk — Congress has passed 10 short-term extensions of the program since 2017.

The latest one runs out May 31, and Congress, led by Financial Services Committee Chairman Maxine Waters, D-Calif., is trying to come up with a longer-term replacement.

It’s not easy for a program that, according to Rep. Sean Duffy, R-Wis., pays out 24 percent of its claims to just 2 percent of its insured.

Witnesses from both the private sector and advocacy organizations on Wednesday urged committee members to take a more comprehensive approach beyond insurance.

The country has adequate flood-plain maps for only about a third of the country, witnesses said. Others said it’s lagged in financing mitigation projects to limit flood damage. Some called for fuller flood-vulnerability knowledge for homeowners and fuller disclosure of flood risks for homebuyers and prospective business owners.

Clay said he sensed a growing, bipartisan consensus that Congress can’t wait any longer for a more robust plan.

“This committee knows the implications of us doing nothing,” he said.