Flood Insurance Extension Likely, But Only For A Few More Months

Washington

Congress will act to extend the National Flood Insurance Program before its current authorization expires on Feb. 28, but such reauthorization will not be included in jobs legislation as originally planned, industry lobbyists said late last week.

A decision as to how to deal with the reauthorization issue will be made this coming week, the lobbyists said, but the latest extension will only last until "late May," according to one lobbyist.

The crisis for the NFIP was prompted by the collapse of negotiations on bipartisan jobs legislation late last week.

The leadership of the Senate Finance Committee unveiled draft legislation on Feb. 11, but Sen. Harry Reid, D-Nev., the Senate majority leader, pulled the plug on the bill the next day. That bill contained a provision extending the NFIP until May 31.

Sen. Reid rejected the bill because he feared that Democrats were going to be criticized for passing jobs creation legislation stuffed with business tax breaks and provisions benefitting special interests.

The HIRE (Hiring Incentives to Restore Employment) Act was introduced as a result of talks earlier in the week between representatives of the congressional Republican leadership and President Barack Obama. The main purpose of the bill is to offer incentives to businesses to hire new workers amid the ongoing economic downturn. A vote on that bill had been expected this week.

Sen. Reid and the Obama administration are now drafting a scaled-back version.

Currently, the NFIP is on its fourth extension since expiring Sept. 30 of last year–the end of the last fiscal year. The current extension expires Feb. 28.

Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee, indicated last week he would seek another temporary reauthorization of the program.