Congress has given the green light to another increase in theFederal Emergency Management Agency's borrowing authority to payflood claims from Hurricane Katrina, but lawmakers are growingincreasingly wary of this open-ended liability.

The House last week gave its approval to legislation increasingFEMA's borrowing authority to $20.8 billion to pay Katrina-relatedflood insurance claims, but not before several lawmakers called forany further increases to include significant reforms to theprogram.

Overall, FEMA has estimated that total flood claims from the2005 hurricane season will be about $23.5 billion, likely meaningthere will be another call for increasing the agency's borrowingauthority.

The House bill, passed by a voice vote, differs from the Senateversion, which increases the borrowing authority to $21.2 billion.House lawmakers amended the bill to reduce the limit and sent itback to the Senate with the hope that reforms of the National FloodInsurance Program will be added.

“I will not support a further grant of increased borrowingauthority without dealing with the reforms,” said Rep. BarneyFrank, D-Mass., ranking member of the House Financial ServicesCommittee.

Rep. Frank said reform efforts in the Senate appear to be morerhetorical than substantial. “Their preference for reform seemsvery abstract,” he said of the Senate.

Indeed, if future extensions of FEMA's borrowing authority donot include reforms aimed at reducing the flood program's need toborrow, members of Congress say they will balk at furtherrequests.

“If this imperative reform effort falters, we will oppose anyfuture increases to FEMA's borrowing authority that are not fullyoffset,” said Reps. Mike Pence, R- Ind., and Jeb Hensearling,R-Texas, in a letter to new House Majority Leader John Boehner,R-Ohio, and Speaker Dennis Hastert, R-Ill.

Reps. Pence and Hensearling said that with the overwhelming debtbeing incurred by the NFIP likely never to be repaid, it should beconsidered the same as any other federal spending program andrequire an offsetting cut elsewhere in the budget.

However, while reforms have been proposed (see “Checklist”), noteveryone is on board. Rep. Candice Miller, R-Mich., for example,took issue with increased mandatory coverage requirements, notingthe proposed change would require thousands of homeowners in herdistrict to buy insurance when Michigan has already paid roughly$138 million in flood insurance premiums since 1978, with claimsamounting to less than $38 million.

Increasing the subsidy those policyholders already provide, sheargued, would be unfair. “If a private insurer tried to do that,they'd be dragged in front of our state insurance commissioner andhave to beg to keep their license,” she said.