The issue of extending and reforming the National Flood Insurance Program continues to stall in Congress. While the U.S. House version of a reauthorization bill passed in July 2011 by a significant margin, the bill has yet to get a floor vote in the U.S. Senate.
Sen. David Vitter, R-La., sponsor of a five-year extension of the NFIP, renewed is renewing the push, arguing in a speech on the Senate floor that relying on short-term extensions is poor way to manage what is an important program. Out of the Storm News covered the short term extensions in a story yesterday.
Vitter said he is concerned Congress could cause a repeat of 2010, when the program lapsed multiple times for a total of 53 days.
“This is an important program for the country,” Vitter said. “The clock is ticking and that clock runs out May 31.”
Congress has sustained the flood insurance program by approving six-month extensions. Vitter also has now introduced a backup bill for another extension through December if he cannot get his legislation heard on the floor.
Sen. Vitter argued that allowing the program to expire could have the effect of further stalling the housing market. Since federally related mortgages require flood coverage, many deals could not be closed when NFIP coverage is not available.
The program allows homeowners and businesses in flood zones that have trouble getting private insurance to obtain policies backed by the federal government.
About 500,000 people in Louisiana participate. The program has been in financial distress with a loss of $18 billion, mostly due to payments made after hurricanes Katrina and Rita in 2005.
If the program lapses, current insurance policies remain in effect but applications cannot move forward.
Vitter said many real estate closings “came to a screeching halt” in 2010 when the program lapsed.
Vitter’s believes the real obstacle to the bill’s passage is simply getting it introduced on the floor. Along with 41 co-signers, Vitters urged Senate leaders to consider the bill in a letter sent in February. He placed much of the blame for the delays on the Senators themselves and their “inability to, frankly, get our act together” in the Senate.
The U.S. House approved its version of reauthorization legislation in July on a 406-22 vote.
Vitter’s five-year reauthorization legislation was approved by the Senate Banking Committee in September.
“We need to get it on the Senate floor, pass it out of here and reconcile it with the House bill,” Vitter said Thursday. “Really, the only issue is getting time on the Senate floor.”