Will flooding from Hurricane Irene prompt Congress to speed along the process to reauthorize the National Flood Insurance Program? That is what property and casualty trade representatives are hoping. The program is slated to expire the 30th of this month. The problem is the conflict between Congress and the Senate. The House passed a bill (HR1309) which would extend the program for 5 years and make rates sound, while the Senate has profoundly different views on how to proceed.
Since 2008, the Senate has favored a plan that writes off the program’s unsustainable debt. In its place, a new program for residential flood risk would be created. However, with Hurricane Irene and other recent floods, the program is threatened with insolvency in much the same way that Katrina did the same in 2005. Though the program is allotted some 21 million dollars of potential borrowing power, the Government Accountability Office concluded back in 2006 that it would never be able to pay such an astronomical sum off.
The Senate is working within a very tight timeframe. With only 2 weeks to pass a bill, they’re facing a public policy disaster if they fail. Additionally, a conference committee would have to mediate differences between the Senate and Congress versions, afterwhich both houses and the Executive Branch would have to sign the bill.
Thus another short-term compromise appears to be on the horizon. Given the tension between the Senate and the Congress combined with the destructive impact of Hurricane Irene, it doesn’t seem very realistic that the two sides will come to a successful long-term agreement for the National Flood Insurance Program by September 30th. However, if the current situation is not successfully resolved by government, it means that thousands of homeowners and their families will be left to recover solely on their own. It’s certain that a failure to find a solution will end up costing the insurance consumer.
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