Hurricane Harvey: National flood insurance renewal likely and emergency funding bill on tap

Hurricane Harvey may go down as one of the worst natural disasters to hit the United States, but it’s also likely to be a catalyst to push Congress to renew the National Flood Insurance Program (NFIP) and start preparing an emergency funding bill for those affected by the storm, FOX Business has learned.

House Speaker Paul Ryan’s (R-Wis.) office assured to FOX Business that the program responsible for 4.9 million policyholders, including more than 590,000 in the state of Texas, will be reauthorized.

“Details are still being worked through, but the flood insurance program will be reauthorized,” AshLee Strong, spokeswoman for Ryan, said.

Strong went on to say they expect to create an emergency finance package for the victims of the hurricane, but noted they still need to wait until President Donald Trump’s administration makes that request.

“We will help those affected by this terrible disaster. The first step in that process is a formal request for resources from the administration,” Strong said.

The House Appropriations Committee, chaired by Rep. Rodney Frelinghuysen (R-N.J.) and the group that is expected to lead the effort in preparing an emergency funding bill, told FOX Business in a statement they’re ready to help but are also in a holding pattern until they get guidance from federal agencies.

"My Committee stands at the ready to provide any necessary additional funding for relief and recovery. We are awaiting requests from federal agencies who are on the ground, and will not hesitate to take quick action once an official request is sent,” Frelinghuysen said.

The insurance program was created 50 years ago after private insurers declared they would not risk catastrophic flood losses. According to the Federal Emergency Management Agency (FEMA), the organization has $1.7 billion to pay claims and only $5.8 billion left that it can borrow from the U.S. Treasury.

Beyond the issues over the limited amount of money they can borrow, NFIP is continuing to ramp up its debt. The program already owes the Treasury approximately $25 billion from previous weather disasters, including Hurricanes Sandy and Katrina. Sandy alone initially cost $8.4 billion, according to the FEMA website.

It’s unclear whether congressional lawmakers will manage to pass anything other than a temporary renewal to the program set to expire on Sept. 30 or if it will be part of a larger debt ceiling increase, which must be completed by Sept. 29 to avoid a government default.

The guarantee by Ryan’s representative will be welcome news for the victims of Hurricane Harvey, yet it could cause concerns for those who were expecting broad changes to the flood insurance program because of the limited time Congress has before they run into a litany of fiscal deadlines, including the renewal of the NFIP.

Members of Congress only have 12 working days after they return from their August recess to not only raise the debt ceiling and reauthorize the NFIP, but also determine how they’re going to fund the government and renew the Children’s Health Insurance Program.

Still, Texas representatives insist that the devastation from Hurricane Harvey should be incentive enough to move ahead with comprehensive reform to the insurance program.

The House Financial Services Committee Chairman, Rep. Jeb Hensarling (R-Texas), told The Wall Street Journal “a long-term reauthorization is within our means and capacity. We have an opportunity to open up this marketplace to competition and to make it more affordable.”