Hopes for a flood insurance deal dim in Congress
A new deadline for Congress to overhaul the National Flood Insurance Program (NFIP) looms in less than two weeks. But with a packed to-do list, most lawmakers on Capitol Hill don’t expect to get very far in negotiations over the program before Feb. 8, setting the table for yet another short-term extension of the program, the fourth since its congressional authorization initially expired at the end of September.
And while senators on both sides say they’re pushing for a deal, there’s growing pessimism about the prospects of reaching an agreement on a long-term reauthorization for the program.
Big gaps remain between fiscal hawks – who want to pare back the program and eliminate subsidies for some policyholders – and coastal lawmakers concerned over the costs to homeowners. The hawks, led by House Financial Services Chairman Jeb Hensarling, R-Texas, pushed a bill featuring potentially steep premium hikes through the House of Representatives in November but have faced stiff resistance in the Senate.
Louisiana’s congressional delegation, conscious of the state’s disaster-marred history and high vulnerability to flooding, have remained generally united in the fight to protect policyholders and fight efforts to jack up rates.
The brief lapse in the program during the federal government’s shutdown last weekend doesn’t appear to have breathed urgency into the flood-insurance issue. And the high-stakes negotiations over the same issues that led to the shutdown – the fate of undocumented immigrants brought into the country illegally as children in particular – appears likely to dominate discussions in Congress over the coming weeks.
Some lawmakers, including U.S. Rep. Garret Graves of Baton Rouge, are now setting aside hoped-for reforms to the program and pushing for a longer extension of the NFIP in its current form, punting on the issue until next year, after this fall’s midterm elections.
Graves said he’s growing increasingly concerned that continued short-term deals on the program might leave an opening for hawks on the other side to push through a reauthorization that could harm homeowners in Louisiana.
Although Graves has long pushed for changes in the NFIP to boost spending on flood-prevention projects and for reforms to the claims process, the Republican recently signed onto a letter backing a simple year-long extension.
“I think that it’s possible to get reform, but I think the House and Senate are on such different pages right now,” Graves said on Monday, shortly after voting to reopen the federal government and extend the NFIP. “What I’m concerned about is that somebody tries to ram something through that’s not well-thought-out policy.”
“At this point, there doesn’t seem to be consensus on the Senate side on how to move forward, and I don’t see supporting the Hensarling bill,” said U.S. Rep. Ralph Abraham, R-Alto. “Given the choices remaining, it seems that a straight extension into 2019 might be the best option to allow Congress time to get this right.”
Rep. Cedric Richmond, D-New Orleans, largely agreed. He noted that Hensarling – whose committee oversees the NFIP – is retiring at the end of the year. A longer extension would put a different, and potentially friendlier, lawmaker over negotiations.
“He is philosophically opposed to the program,” Richmond said. “He’s just been an obstacle that the Republican leadership has not been willing to roll over yet.”
Republican leaders circumvented Hensarling in 2014 to pass the Homeowner Flood Insurance Affordability Act, which cancelled many of the steep rate hikes included in the earlier Biggert-Waters Flood Insurance Reform Act of 2012. But Speaker Paul Ryan, R-Wisconsin, hasn’t been interested in doing so this time around, Richmond noted.
“I’m not saying good riddance (to Hensarling), but it will give us a path to some real flood insurance,” Richmond added.
Louisiana Sens. Bill Cassidy and John Kennedy, both Republicans, aren’t as pessimistic. Both told The Advocate this week they’re hopeful that negotiations over the NFIP might get moving in the coming months.
“I’m not ready to go there yet,” said Cassidy, when asked about growing interest in a simple extension of the program. Cassidy added that he’s seen signs that Hensarling is becoming a more flexible negotiator on the issue.
Cassidy and Kennedy have co-authored separate bills that would overhaul the program, in part by encouraging more flood-protection projects.
Their bills would also invest more money in high-tech mapping of flood risk, a top priority for coastal lawmakers who’ve complained that existing risk maps do a poor job of indicating a home’s risk of damage. Better maps, backers say, would also be invaluable tools for communities considering new development.
Kennedy said he spoke with Senate Banking Chairman Mike Crapo, R-Idaho, as well as with the committee’s top Democrat, Sen. Sherrod Brown of Ohio. Both indicated they’d like to sit down and “get serious” about flood insurance once Congress tackles pressing debates over the budget and immigration.
A year-long extension of the NFIP without any reforms “may be where we end up,” said Kennedy, “but I don’t want to concede that quite yet. We need some certainty in the program.”
New Jersey Sen. Bob Menendez, a Democrat who coauthored an NFIP overhaul proposal with Kennedy, said punting on a reauthorization would be a missed opportunity. New Jersey residents hit by Hurricane Sandy, along with victims in neighboring states, have complained bitterly about long-running disputes over claims and a Byzantine appeals process.
“We’re trying to get something substantive and not just a simple reauthorization without dealing with the reforms we think are necessary,” Menendez said this week. “When people make a claim, they should have a process that’s reasonable.”
But further inaction in the Senate, Graves said, could leave the door open for lawmakers looking to overhaul the program in a very different way: shoring up the program’s finances by axing subsidies, jacking up rates and cutting the riskiest properties from the program.
That group of lawmakers, Graves said, “want to aggressively move this thing.”
Those sorts of changes could hit some homeowners hard – and not only through higher premium payments. If flood coverage on a property becomes either unaffordable or unattainable, it could crater the home’s value and wipe out a family’s equity.
“I’m all for reform,” Graves said, “but my idea of reform looks very different.”
© 2018 The Advocate, Baton Rouge, La., Bryn Stole. Distributed by Tribune Content Agency, LLC