Congress Agrees on Multi-Year Flood Insurance Extension, Reforms

By Andrew G. Simpson | June 29, 2012
Congress

The U.S. House of Representatives passed a massive bill on Friday combining funding for transportation programs, low-interest student loans, and the National Flood Insurance Program. On a 373-52 vote, the House sent the measure to the Senate which passed it, 74-19. President Barack Obama is expected to quickly sign it into law.

The bill came together this week, as lawmakers calculated the election-year impact of continued gridlock on measures affecting jobs, soaring consumer debt, and help for people who need government underwriting for flood risk to buy a home.

“It has indeed been a very bumpy road to get to this point,” said John Mica, the Republican chairman of the House Transportation Committee, who led negotiations on the bill.

“I’m not particularly pleased with some of the twists and turns,” he said on the House floor on Friday, describing the difficulties of reaching the deal in the gridlocked Congress.

After months of negotiations, the compromise was reached just days away from the deadline for an increase in student loan rates and for a lapse in transportation funding.

Ambitious proposals to shore up U.S. infrastructure gave way to a deal that basically keeps transportation funding at current levels.

The blueprint was based on a bipartisan proposal by the Democratic-led Senate and was supported by the Obama administration. President Barack Obama was expected to quickly sign the bill into law.

Two influential conservative groups – Heritage Action for America and Club for Growth – said the programs were too expensive and urged lawmakers to vote against the bill.

The federal government spends more than $50 billion annually on road, bridge and transit construction projects. The last transportation bill expired in 2009 and construction programs have survived since through a series of short-term funding extensions. The current one ends on Saturday.

STUDENT LOANS, FLOOD INSURANCE

The package also prevents federal student loan interest rates from doubling to 6.8 percent on July 1 in a one-year, $6 billion deal.

The bill also extend funding for the National Flood Insurance Program to September 30, 2017. It had been set to expire at the end of July, in the middle of hurricane season.

The flood insurance program took on a massive debt load during Hurricane Katrina in 2005, and has been kept alive through repeated short-term extensions as lawmakers struggle with reforms. Federal law requires that homes in designated flood-risk areas have flood insurance before a mortgage can be completed. Because the NFIP is effectively the only flood insurance available in the United States, a lapse in the program would mean home sales could not close in designated flood areas.

For more from Insurance Journal on the legislation and reaction to it, visit here.

 

Subscribe Insurance news headlines delivered to your email.
Get a free subscription to our popular email newsletter.

Latest Comments

  • July 2, 2012 at 3:02 pm
    First Agent says:
    The new reality of politics is to wrap several things in a bill loaded with amendments and usually a "liberal" dose of pork. What do student loans have to do with Flood? Hel... read more
  • July 2, 2012 at 2:28 pm
    Scott says:
    Just wondering if they removed the anti-aboration amendment that was originally part of the flood bill........as if that had ANYthing to do with flood.
  • July 2, 2012 at 2:24 pm
    Ruminator says:
    NFIP doesn't need to offer wind coverage. That's already available. On the other hand, maybe we should add flood to ALL property policies and truly spread the risk.
See all comments

Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features