NU Online News Service, Dec. 9, 2:33 p.m.EST

|

Legislation that packages the House version of afive-year National Flood Insurance Program extension into a dealthat would extend expiring tax cuts is headed for House flooraction and likely approval.

|

The deal would essentially include an NFIP extension in HouseRepublicans' demands for budget cuts in exchange for their supporton extending expiring tax cuts.

However, because of provisions other than the NFIPreauthorization, the White House issued a veto threat, and SenateMajority leader Harry Reid, D-Nev., said it would not win Senateapproval.

The House Republicans want prompt passage of the legislation aspart of the "pay-fors" they are demanding. They calculate thatpassage of the NFIP reauthorization bill would reduce the deficitby $4.5 billion over 10 years.

|

Industry officials privately confirm that passage of theNFIP-extension bill is being held up while talks continue.

|

However, one industry lobbyist questions the math involved insaying passing the NFIP reauthorization would save $4.5 billionover 10 years when the program currently owes the Treasury almost$18 billion due to losses created by paying claims from HurricanesKatrina and Rita in 2005.

|

Tax cuts that would gain House Republican support in exchangefor cuts include reducing an employee's share of the SocialSecurity payroll tax by 2 percentage points, to 4.2 percent ofwages. This tax cut was passed last December. If Congress doesnothing, the rate will revert to 6.2 percent in January.

|

Other parts of the tax package including an extension of joblessbenefits for the long-term unemployed and sparing doctors from a 27percent increase in their Medicare payments.

|

The current reauthorization of the NFIP runs out Dec. 16. TheSenate Wednesday night passed S. 1958, a stand-alone measure thatwould extend the current NFIP program until May 31, 2012, whiletalks continue between the House and Senate on legislationreauthorizing the NFIP until 2016.