The National Flood Insurance Program will likely need to go toCongress for additional borrowing authority to pay claims fromSuperstorm Sandy, insurance industry officials say.

Eli Lehrer, president of the R Street Institute in Washington,says calculations by his group and others indicate that the FederalEmergency Management Agency, which runs the NFIP, has only $1billion on hand to pay claims.

Steve Ellis, vice president of Taxpayers for Common Sense, madethe same prediction. The comments were made during a conferencecall convened by SmarterSafer.org, a group representing a diversegroup of people with interests in disaster mitigation andconservation.

Officials at the news desk at FEMA say they will ask theagency's top officials to comment on the issue to PC360 as soon aspracticable.

During the call, those participating said the storm again showsthe need for greater mitigation efforts to reduce storm damagethrough stronger building codes, the end of subsidies for buyingflood insurance, and an end to support by the federal governmentthat promotes building in areas prone to flooding.

At the same time, Lehrer, for one, rejects claims that climatechange was one reason for the storm.

"Climate change impacts all weather, obviously," he says.

But, Lehrer adds, "This type of event was easily foreseeable inall the insurance company models. It was not a particularly severeevent; it just affected a place where a lot of people live.

"It is highly likely that the NFIP will run into a situationthat will require having its borrowing limit increased," headds.

He says this will likely happen before the end of the year;"during the lame duck session."

Lehrer says and R Street analysis indicates that the NFIP owesthe government $18 billion and currently has a $20 billion cap onborrowing.

Lehrer and others on the conference call also said it is likelythat there may be calls in Congress to retroactively allow peoplewho don't have flood insurance to buy it.

He says there has been speculation that a number of people onStaten Island don't have flood insurance. Lehrer agrees with thatspeculation, stating that "take-up rates on flood insurance arelow."

He says that if NFIP money runs out, there is the potential thatthe program will have to delay paying claims.

In his comments, Lehrer says, "Congress must stay the course onthe reforms it has passed to NFIP."

While an increase in the NFIP debt limit "is inevitable andshould be granted," Lehrer says, "Congress needs to draw a brightline that the program cannot forever prove a burden to taxpayers.It must accelerate its efforts to raise NFIP rates and transitionthe program to the private sector."

He also says that "New Jersey will rebuild and, indeed, it must.So must the other damaged areas. But we can't—and shouldn't—rebuildin just the same way or waste money doing it. Rebuilding the rightway is more fiscally responsible and better for theenvironment."

One of the issues brought up during the conference call isgrowing support for legislation being proposed by Sen. John Kerry,D-Mass., the Water Resource Development Act, which would requireexisting federal agencies to promote stronger flood-controlprovisions and uniform building codes that provide statesincentives to better control development in flood-prone areas.

Under the law, states that adopt and enforce nationallyrecognized model building codes for residential and commercialstructures would qualify for an additional 4 percent of fundingavailable for post-disaster grants. The program would beadministered by FEMA.