MacArthur Introduces Extension for National Flood Insurance

Storm-Battered Program Is $25 Billion in Debt
Jul 17, 2018

Congressman Tom MacArthur (NJ-3rd) introduced legislation on Tuesday that will reauthorize funding the National Flood Insurance Program through Nov. 30.

Anybody who follows the news out of Washington knows that Congress is the master of the short-term fix.

In March Congress finally passed a $1.3 trillion 2018 budget. If that sounds just a few months late, you should realize that the 2018 federal fiscal year actually began way back on Oct. 1. Congress had kept the government operating in the meantime by employing five “continuing resolutions” – short-term funding measures to avoid a government shutdown.

MacArthur’s bill to extend the NFIP would be another short-term fix, but an important one. Hurricane season officially began on June 1. But the peak of the Atlantic basin hurricane season, which officially ends Nov. 30, is from mid-August to late October.

The current NFIP authorization ends July 31 – needless to say, incredibly bad timing.

If MacArthur’s bill were to make its way through the House and Senate and be signed by President Trump, it would be the sixth short-term fix to the problem since long-term NFIP authorization expired in September 2017.

The House of Representatives passed a five-year resolution for the National Flood Insurance Program on Nov. 14. But the Senate has failed to act, prompting MacArthur to propose his bill, one that House Majority Whip (the third-highest post in the House GOP) Steve Scalise jumped on as an original co-sponsor.

“I have met numerous times with House leadership and explained the critical need for NFIP to be reauthorized,” said MacArthur, whose 3rd District locally includes the western half of Stafford Township and all of Barnegat Township. “This bill extends NFIP through November 30th, allowing 140 million Americans living in coastal communities, like Ocean County, to be covered through the entire hurricane season. I am calling on my colleagues on both sides of the aisle – and from both chambers of Congress – to come together to pass this bill to ensure that families and communities are not put at risk.

“I will continue to work with House and Senate leadership on a long-term reauthorization that gives home-owners certainty, ensures affordability, increases mitigation funds for shore communities, and instills accountability at FEMA for how they treat disaster victims,” he said, referencing the Federal Emergency Management Agency.

The stickler for a long-term fix is the fact that the program, racked by claims following 2017’s busy hurricane season – not to mention Hurricane Katrina in 2005 and Superstorm Sandy in 2012 – is $25 billion in debt. Critics want homeowners who live in flood prone areas to pay more – in some cases, much more – to stabilize the program. Representatives of constituents who live in such areas don’t want to see homeowners priced out of the market.

If the NFIP were to expire on July 31, homeowners with current NFIP policies would not be immediately affected. Their current policies would remain in force until they expire at the end of their one-year term. But new policies could not be issued, and that would have a severe impact on the coastal flood zone real estate market.

Between 2008 and 2012 the NFIP had a rather amazing 17 short-term extensions. But it still lapsed four times: for one day in March 2010; March 29 to April 15, 2010; June 1 to July 2, 2010; and Oct. 1-5, 2011. During the long, June 2010 lapse, it is estimated that more than 1,400 home sale closings were cancelled or delayed each day because the new owner couldn’t obtain flood insurance required by mortgage lenders.

There is a rapidly increasing private flood insurance market, yet the vast majority of more than 5 million flood insurance policies in the U.S. are issued by the NFIP.


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