Senate Expected to Decide Fate of Flood Insurance Program This Week

May 21, 2012

This week the Senate should reveal whether it will tackle a five-year extension with reform of the federal flood insurance program or another short-term authorization, or both.

The National Flood Insurance Program is currently set to expire in 10 days on May 31.

The House has already acted. Ten months ago, the House overwhelmingly passed a five-year authorization with reforms. Last Thursday, given that the Senate has not taken up long-term reform, the House voted another 30-day extension by a lopsided 402-18 vote. It would keep the program running until June 30.

Lawmakers have approved a dozen short-term extensions in the past few years while promising to get to a long-term bill.

Last week, Senate Majority Leader Harry Reid, D.-Nev., attempted to get a vote on another 30-day extension but he was opposed by Sen. Tom Coburn, R.-Okla., who supports the program but insisted that if the Senate can’t agree on long-term solution at this time, it should at least agree on one key reform: an end to NFIP’s premium subsidies for owners of high-value and vacation homes.

Reid said he agreed with Coburn that the reform legislation and long-term extension are important but he said the problem has been a rush to add “irrelevant” amendments to any bill that comes up. He said the Senate has other business including a farm bill and cyber security measures to address.

Coburn and Reid agreed to work with their respective party leaders on the issue to limit the number of amendments to bills and see if the longer-term flood insurance measure could be brought to a vote.

Even if the Senate achieves that milestone, a short- term extension would still be necessary while differences between any Senate bill and House measure get ironed out.

Then the Senate’s choice would appear to be either a a 30-day extension that mirrors the one that passed the House last Thursday or a seven-month extension proposed by Sen. David Vitter, R-La.

Either the 30-day or the seven month extension could be accompanied by a promise to finally bring legislation for a five-year extension to the Senate floor.

House members are frustrated with the Senate’s inaction on the issue.

“The Senate has not done their job,” Rep. Spencer Bacchus R.-Ala., said on the House floor last week when the most recent 30 day extension was being debated.

Speaking before independent insurance agents last week, Bacchus said there is bipartisan support for the five-year extension. “It’s not a controversial bill. It has bipartisan support, yet we can’t get the Senate to act on it,” he said.

Real estate and insurance industries have also been waiting for the Senate to act.

“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,” Moe Veissi, president of the National Association of Realtors, said in a statement.

“PCI commends the House for its leadership to prevent a lapse in this vital program on May 31, and we urge the Senate to follow suit expeditiously,” said Tom Litjen, vice president, Property Casualty Insurers Association of America (PCI). “However, this action does not alleviate the need for Congress pass a long-term reauthorization and reform bill as soon as possible.”

“Avoiding yet another lapse of the NFIP is paramount to the continued protection of the program’s 5.6 million policyholders in 21,000 communities across our nation. However, a long-term reauthorization that reforms the program is ultimately needed to ensure the NFIP’s long-term viability,” said Tom Santos, vice president for federal affairs at the American Insurance Association (AIA).

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