Flood Insurance gets extension in massive spending package — but new deadline would loom in July

March 22--WASHINGTON -- The National Flood Insurance Program would get a four-month reprieve as part of a massive $1.3 trillion federal spending deal unveiled late Wednesday evening, 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.

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.

The proposed July extension for the National Flood Insurance Program left at least some Louisiana members of Congress worried that it would give critics of the program -- led by retiring House Financial Services Chairman Jeb Hensarling, R-Texas -- a chance to push through changes to the program that would hurt south Louisiana policyholders.

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.

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.

The $1.3 trillion omnibus spending bill appeared on track for passage Thursday morning, though a number of major hurdles remain. If Congress doesn't pass the bill by midnight on Friday, the federal government will shut down.

More to come.

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