Congressman Sean Duffy (R-WI), chairman of the House Financial Services Subcommittee on Housing and Insurance, has been a driving force trying to help reform the National Flood Insurance Program (NFIP) before it expires Sept. 30.
And it appears his efforts could be successful.
Circulating among Congress for much of the spring and into June was his subcommittee’s discussion draft on the NFIP and proposals for changes in key areas on: affordability and consumer costs, private market development and consumer choice, the flood mapping process, the mitigation process, taxpayer protections and claims processing.
Created in 1968, the NFIP under the Federal Emergency Management Agency (FEMA) provides flood insurance protection to property owners living in flood-prone areas where flood insurance is federally mandated and must be purchased from either the federal government or through an insurance company.
The program got hammered financially by Hurricane Katrina and then Hurricane Sandy, which together have laid more than $24 billion in debt at the feet of the NFIP.
Worse still, NFIP is likely to have insufficient funding over a 10-year period and billions in federal funds will be needed to help the program meet its responsibilities, according to the Congressional Budget Office (CBO).
The CBO earlier this year projected that the NFIP would have insufficient receipts to pay the expected claims and expenses over the 2018–2027 period. The CBO also expects that FEMA will need to use about $1 billion of its current $5.8 billion of borrowing authority from the U.S. Treasury to pay those expected claims.
Duffy said that the release of the discussion draft has given Republicans and Democrats the opportunity to suggest how to protect the program’s integrity going forward, and he added that other stakeholders across several industries also have provided feedback.
“The ideas stemming from this open process will ensure that everyone who needs flood insurance will have access to it while ensuring that the NFIP does not fall further into debt,” he told Ripon Advance.
Yes, the program’s debt is a big problem.
“We need to get this program to a place where it is not losing $1.5 billion a year of taxpayer money and adding to its already $25 billion in debt,” Duffy said. “We need to reverse the history of kicking the can down the road and get the program on a path of self-sustainability.”
The congressman suggested that such a path could be walked “in a number of ways,” including increasing mitigation and reducing risk exposure to increasing fees.”
Duffy added that the most encouraging part of the discussion draft is the fact that it incorporates ideas from both Republicans and Democrats—“coastal members of Congress as well as inland members,” he said, referring not just to those congressional members who represent flood-prone states.
Duffy said all of the feedback has been encouraging. “The discussion draft is doing its job of facilitating a constructive dialogue between all interested parties,” he said.
That’s good news for a process that at times has seemed long and drawn out, lasting more than a year and a half as members attempt to iron out their NFIP differences to renew the program before its Sept. 30 expiration date when funding ends.
And there are members who remain at odds over how long the NFIP should be extended, how much of the program should be run by the private insurance market, how soon a proposed transition should take and how much refunding the program should get.
Duffy remains optimistic.
“We are well ahead of schedule to get this done by the Sept. 30-expiration date. We will get this done by July,” he told Ripon Advance.
In fact, an amendment Duffy sponsored, which would decrease caps on annual flood insurance rate increases, update federal flood mapping measures and increase penalties for residents of flood zones without insurance, passed along party lines during the House Financial Services Committee’s June 21 meeting.
The discussion draft is actually several bills that were voted on independently from each other during the Financial Services Committee meeting last week. When presented to the House floor in July for a full vote, the draft will be packaged together as one item.
“I’m confident this bill will pass the House and I will be eager to see what the Senate responds with as they’ll have plenty of time to review our legislation and provide feedback,” said Duffy.
On a more personal note, asked how his family influences his bipartisan spirit in Congress, Duffy said he ascribes to the political approach that “we can disagree without being disagreeable.”
During the 2016 presidential campaign, for instance, Duffy said his mother had a giant Bernie Sanders sign in her yard right alongside a Duffy sign — even though Duffy’s sign wasn’t as big.
“So even though we have our political differences, we still love and respect each other,” he explained.
It’s an approach Duffy thinks needs to be seen more in Washington, D.C.
“That’s why my town halls with my constituents are always productive listening sessions and not screaming matches,” he said. “We find common ground where we can and respect our differences when we can’t.”