The Joint Select Committee on Deficit Reduction should take on the job of passing a reauthorization of structural reforms to the National Flood Insurance Program, Republican and Democratic leaders of the House Financial Services Committee said.
In separate letters to the "supercommittee" chairmen, Committee Chairman Spencer Bachus , R-Ala., and ranking Democrat Barney Frank , D-Mass., urged it to integrate into budget-cutting recommendations reforms the Obama administration projects could generate a net gain of $4.2 billion in new revenues for the NFIP.
Reforms proposed both by the administration and in a House bill that passed with overwhelming bipartisan support in July include a shift to actuarially determined risk-based premiums, the cutting of some premium subsidies and a redefinition of repetitive loss properties. While reforms would help the deficit picture, Bachus wants firm language directing that any savings be used to pay down the NFIP's debt to the U.S. Treasury, which currently stands at approximately $18 billion, according to the nonpartisan Congressional Budget Office.
"We urge the Joint Select Committee to ensure that revenues that result from reforms to the NFIP remain in the NFIP, rather than being used to pay for new programs," Bachus wrote.
The call for supercommittee action does not necessarily mean the Senate version of the flood bill won't get a vote, said Matt Gannon , assistant vice president of federal affairs for the National Association of Mutual Insurance Companies. However, skepticism of speedy Senate action is warranted, he said.
"The House would be justified to not have confidence in the Senate," Gannon said.
The NFIP is currently set to expire Nov. 18, the end date for a continuing budget resolution.
The Senate Banking Committee unanimously advanced its legislation Sept. 8, Similar to the House bill, it would allow premiums to increase up to 15% per year, up from the current level of 10% but less than the House version's 20%. A House amendment to depopulate much of the NFIP is not in the Senate bill.
The Senate bill would increase net income by $4.7 billion over 10 years, according to an Oct. 13 CBO report. However, lawmakers shouldn't count on that money being available for other means; a catastrophic storm would make it likely the NFIP would need to borrow more money, the CBO said. Any improved net revenues will be needed to fulfill obligations to policyholders.
Bachus' and Franks' comments are welcome, but the need for Senate Majority Leader Harry Reid to schedule a vote is urgent, said R.J. Lehmann , deputy director of the Heartland Institute's Center on Finance, Insurance, and Real Estate. "There is broad consensus on these common sense, bipartisan solutions for moving toward risk-based pricing and a more sustainable financial structure for the NFIP," he said.