Flood Insurance Program Remains In Limbo

WASHINGTON - The National Flood Insurance Program's federal authorization is set to lapse in less than three weeks, setting the latest deadline for lawmakers on Capitol Hill to hash out a deal to overhaul a critical program that's deeply in debt.

There's been scarce sign of action in Congress, though, with few signs of progress toward bridging wide gaps separating fiscal hawks bent on shrinking the program from coastal lawmakers - including Louisiana's delegation - who've insisted on shielding homeowners from rising costs.

Congress appears all but certain to punt again when the latest deadline hits on March 23. If so, it will mark the fourth time since the NFIP first expired at the end of September.

Lawmakers are currently hammering out a massive omnibus budget deal to fund the federal government through the end of the fiscal year which also needs to be passed by March 23. The must-pass piece of legislation could present a vehicle for attaching an overhaul of the NFIP, but there's no indication any compromise flood insurance bill will be ready by then.

"I'm disappointed, bitterly disappointed, about the lack of enthusiasm about moving it to the top of the list" of priorities in Congress, said Sen. John Kennedy, R-Louisiana.

"I wish I knew how to make my colleagues be more enthusiastic about us getting something done," added Kennedy, who sits on the Senate Banking Committee. The committee holds authority over the NFIP program.

But rather than focus on the NFIP, the Banking Committee has busied itself instead with hammering out a rollback of the Dodd-Frank regulations imposed on the banking and financial services industries in the wake of the 2008 financial crisis.

Senate GOP leaders are expected to bring that bill to the floor this coming week. But Kennedy said he's not optimistic the committee will move quickly on flood insurance reforms after that bill goes forward.

"It hurts me to have to say this but you initiate conversations on this subject and people say 'How do you feel about the gun bill?' or 'How do you feel about DACA?'" Kennedy said, rattling off a couple of the other issues currently facing Congress.

The NFIP has wracked up billions of dollars of debt to the U.S. Treasury over the past 13 years, beginning with a massive wave of claims that followed the destruction of Hurricane Katrina. A brutal 2017 hurricane season - which saw major storms decimate parts of Florida, Texas, Louisiana and the Caribbean U.S. territories of Puerto Rico and the Virgin Islands - piled on the losses and added to the potential urgency of putting the program on sounder footing.

But a years-long split in Congress over exactly how to overhaul the program has yet to be resolved. Fiscal hawks, led by House Financial Services Chairman Jeb Hensarling, R-Texas, have proposed jacking up premiums for homeowners currently paying below-risk "grandfathered" rates and booting some homes from the program.

That hasn't sat well with a bipartisan collection of lawmakers representing storm-ravaged states from Texas to New York who've worried about what those changes would do to homeowners who depend on the program. Those lawmakers, including Louisiana's two senators - Kennedy and Bill Cassidy - appear to have the votes to block any objectionable legislation from moving through the Senate.

Louisiana's delegation - including Kennedy, Cassidy, U.S. Rep. Garret Graves and House Majority Whip Steve Scalise - have advocated investing more money in flood-protection projects and finding ways to expand the pool of policyholders to cut down on future claims and bring in more premium dollars.

A bill authored by Hensarling passed the U.S. House of Representatives in November after the chairman struck a deal with Scalise, R-Jefferson, to soften a number of its provisions. But the bill was always expected to be dead on arrival in the Senate.

The House deal split Louisiana's delegation. Despite concessions from Hensarling, three of the state's congressmen - Graves; Rep. Ralph Abraham, R-Alto; and Rep. Cedric Richmond, D-New Orleans - voted against it.

"The policy behind the House bill is just a big mistake - and thankfully the Senate shares that sentiment and they've been resistant to moving the House bill," said Graves, who ran the state's Coastal Protection and Restoration Authority before joining Congress.

The House and Senate "appear in different orbits right now" on flood insurance, Graves said.

Although the Baton Rouge Republican has argued that significant changes should be made to the program, Graves said Friday that the political stalemate in Congress makes extending the program into next year with only minor tweaks the best course.

"I haven't gotten the sense that we're anywhere near any type of big reform agreement on NFIP," Graves said.

Hensarling, already term-limited as chairman, announced he'll be retiring from Congress at the end of the year. That will bring fresh - and potentially friendlier - leadership on the program from the House side in 2019.

Hensarling has long eyed his own version of flood-insurance reform and has pushed hard to accomplish it before handing in his gavel and heading off into retirement.

Efforts to build consensus on flood insurance "seem to fall apart," said Sen. John Cornyn, R-Texas, the No. 2 Republican in the Senate. "I agree with (Hensarling) that it's important. It just seems to be one of those things that never quite gets done."

"I really hope it's not a punt (on flood insurance) but the time is fleeting," said Sen. Bob Menendez, D-New Jersey, who also sits on the committee and co-authored an NFIP overhaul bill with Kennedy.

Caitlin Berni, vice president of policy and communications for Greater New Orleans Inc. who also leads a national coalition to lobby on flood insurance issues, said she'd now wager on a serious flood-insurance overhaul getting pushed into 2019.

Doing so "has both pros and cons," Berni said.

Unlike in past years - such as in 2014, when south Louisiana residents faced potentially skyrocketing increases in flood-insurance premiums without congressional action - few policyholders are likely to suffer in the short term, Berni said.

And while Berni said she didn't want to see lawmakers pass up chances to make needed improvements, taking on the program after Hensarling's departure will put Louisiana in a stronger position.

"What I think people forget is the flood insurance program is in the tank, what, $30 billion or something? It's a lot of money," said U.S. Sen. Jon Tester, D-Montana, who's sponsoring a bill to open up the flood insurance market to private competition. "And if we don't do something to fix it - even if it may be painful - that program may go away and if it goes away, then those folks that need it are going to be in a world of hurt."

But Berni said arguments like Tester's overlook the fact that Congress shells out millions in taxpayer dollars to help victims - insured or not - after all sorts of disasters.

Cassidy, who's co-sponsoring his own flood-insurance overhaul with New York Democratic Sen. Kirsten Gillibrand, said he remains hopeful the Senate might start inching forward on flood insurance once it wraps up the rollback of banking regulations.

The Banking Committee's top Democrat, Sen. Sherrod Brown of Ohio, squarely blamed that Republican-backed banking deregulation for the holdout. Asked about flood insurance on Thursday, Brown blasted the GOP for "giving Wall Street more stuff."

"It's more important to them (Republicans) to bail out the big banks," Brown said. "That's more important to them than flood insurance."