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National Flood Program Extended Until June 30th

Source: WSJ - Michael Crittendon & Alan Zibel

Posted on 21 May 2012 by Neilson

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Flood insuranceThe ongoing struggle to determine the future the government's flood insurance program for homeowners in flood-prone areas continues. On Thursday, the House passed a one-month extension of the federal government’s flood insurance program, acting just two weeks before hurricane season begins.

The House of Representatives voted 402-18 to move a measure that would keep the National Flood Insurance Program running through June 30, a month beyond its current May 31 expiration date. That puts the pressure on the Senate, where leaders are considering an approach that would require them to pass a short-term extension of their own while trying to cobble together support for a five-year extension similar to what the House has already acted upon.

“There is simply no reason that, in the next few weeks, we cannot sit down and reconcile any differences that remain between the House and Senate visions,” Rep. Judy Biggert (R., Ill.) said during floor debate on Wednesday, expressing frustration with a process that has seen lawmakers pass a series of short-term extensions of the program.

“The Senate has not done their job,” said Rep. Spencer Bachus (R., Ala.), the chairman of the House Financial Services Committee.

The flood insurance program has been under strain since the middle of last decade, when a number of bad storm years — led by the 2005 Atlantic hurricane season when Katrina, Rita and others caused billions in damage — drove it into the red. Since then, lawmakers have passed a number of short-term fixes; the program has been temporarily extended 16 times since September 2008.

Millions of homeowners, primarily those in coastal regions, depend on the program for flood insurance. The flood insurance program had $1.267 trillion in insurance in force as of February, as well as 5.6 million policyholders. “Our whole country is coastline and flooding is the worst type of natural disaster,” Rep. David Scott (D., Ga.) said Wednesday.

In the Senate, leaders are working with Sen. Tom Coburn (R., Okla.) and others to see if they can agree on a way forward to bring up a longer-term extension for a full Senate vote.

That process would likely require the Senate to pass a short-term extension allowing them to push off any action until next month at the earliest.

Lobbyists for the real estate and insurance industries have been pressing lawmakers to do so.

“The short-term extensions and shutdowns have exacerbated uncertainty in real estate markets and are inhibiting long-term investments that are vital to the U.S. economic recovery,” said Moe Veissi, president of the National Association of Realtors, in a statement earlier this week. “Real estate markets are continuing to recover and cannot tolerate the instability of operating the NFIP by stopgap or shut down. This is not a responsible way to run the program.”