Washington–House members grudgingly approved an increase in federal borrowing authority to $20.8 billion today to pay the costs of the financially strapped National Flood Insurance Program.

House lawmakers cautioned that the increase to the Federal Emergency Management Agency's borrowing authority could be the last unless significant reforms are included in the next request. FEMA is the flood program's parent agency.

The legislation, S. 2275, was agreed to by a voice vote, and would increase the agency's borrowing authority from $18.5 billion to $20.8 billion. The bill will now go to the Senate, which has written a version of the legislation that would raise the borrowing amount to $21.2 billion.

Overall, FEMA has estimated total claims costs from the 2005 hurricane season will be approximately $23.5 billion, meaning there likely will be another call for increasing the agency's borrowing authority.

In debating the bill, however, lawmakers said any further borrowing authority legislation must also include significant reforms to the National Flood Insurance Program.

Rep. Barney Frank, D-Mass., the ranking member of the House Financial Services Committee, said that while he supported the increase in S. 2275, “I will not support a further grant of increased borrowing authority without dealing with the reforms.”

The Financial Services Committee has been working on legislation that would make major changes to the program, Mr. Frank noted, but he added that efforts in the Senate appear to be more rhetorical than substantial.

“Their preference for reform seems very abstract,” he said of the Senate, adding that reform debated in that chamber “does not make into a bill.”

Rep. Robert Ney, R-Ohio, offered support for increasing the borrowing authority, saying, “We have a commitment to these people who paid into the system,” but he also criticized FEMA for its projections as to how long the increased funding would sustain its ability to pay claims.

“This will not take us to August,” he said, later predicting, “We're going to be back here in 90 days.”

Rep. Frank echoed those sentiments, saying that FEMA “has no idea what the spending rate is.”

Among the reforms being discussed are reducing or eliminating federal subsidies for flood insurance premiums, especially for second homes or rental properties; improving FEMA's floodplain maps; and increasing the number of propertyowners required to purchase flood coverage.

FEMA's need for increased funding has come under fire in recent days as conservatives have grown leery of further subsidizing the program.

Rep. Candice Miller, R-Mich., took issue with increased mandatory coverage requirements, noting that the proposed change would require thousands of homeowners in her district to purchase coverage when Michigan already pays significantly more into the system than it receives.

Michigan residents have paid roughly $138 million in flood insurance premiums since the state joined the program in 1978, she said, and have filed claims amounting to less than $38 million. Increasing the subsidy those policyholders provide, she argued, would be unfair.

“If a private insurer tried to do that, they'd be dragged in front of our state insurance commissioner and would have to beg to keep their license,” Rep. Miller said.

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Flood Borrowing Passes House

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