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Congress May Be Asked to Increase NFIP Borrowing Authority

The National Flood Insurance Program (NFIP) is likely to be the subject of further discussion in Congress as Hurricane Sandy claims – estimated to be as much as $12 billion – continue to pour in.
November 28, 2012

The National Flood Insurance Program (NFIP) is likely to be the subject of further discussion in Congress as Hurricane Sandy claims – estimated to be as much as $12 billion – continue to pour in. The NFIP, which continues to carry $18 billion in debt from Hurricane Katrina, can only borrow about $2.9 billion from the Treasury. While the program has not requested additional borrowing, Congress is likely to act on the issue in the lame-duck session once a request is made. Officials at the White House Office of Management and Budget are working with the Federal Emergency Management Agency (FEMA) managers of the program to closely monitor cash balances and pending claims.

There are reports that a provision increasing the NFIP’s borrowing authority could be tacked on to a deal aimed at averting the “fiscal cliff” of $600 billion in tax increases and automatic spending cuts that are looming in January. The key committee chairmen, Banking Committee Chairman Sen. Tim Johnson (D-S.D.) and House Financial Services Committee Chairman Spencer Bachus (R-Ala.), appear ready to act. “Due to Hurricane Sandy, the nation's flood insurance program, which is already in debt, will also need billions more,” Bachus told reporters last week. “Thankfully, we did pass legislation earlier this year with important reforms to the flood insurance program. And I wanted to announce that we stand ready to work with the administration and our Democratic colleagues in Congress to address these new challenges.”

On November 15, the PIA National Government Affairs Committee (GAC) unanimously passed a resolution supporting an expected request from FEMA for increased borrowing authority to accommodate losses from Sandy. PIA will lobby Congress for such legislation.

Congress Prepares for Flood Insurance Bailout (The Hill 11/22/12)
PIA Supports Increased Borrowing Authority by NFIP (PIA 11/21/12)

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