Congress Passes NFIP Borrowing Authority Increase Amid Calls for Reforms

And during the debate, other Republicans noted that the NFIP only takes in about 70 cents for every dollar it pays out in claims.

Rep. Jeb Hensarling, R-Texas, incoming chairman of the House Financial Services Committee, said during the debate, "For the victims who paid for flood-insurance policies with the National Flood Insurance Program, their claims need to be paid, and paid now."

But, he added that the NFIP "is beyond broke—it is taxpayer-bailout broke."

He said his committee will mark up a bill this year "to transition to a private innovative, competitive, sustainable flood-insurance market."

He said that is needed to ensure that "taxpayer bailouts are never needed again" and to get the NFIP "on a path towards actuarial soundness." He acknowledged that some reforms were imposed through the NFIP reauthorization legislation enacted in July, but said that despite those reforms "Sandy has hit before many of these provisions could take effect."

To defend itself from attacks from Northeast members of the Republican caucus disappointed by the delay in Sandy aid, the Republican leadership sent Rep. Scott Garrett, R-N.J., a House Financial Services subcommittee chairman, to manage the debate and be the sponsor of the legislation.

As he addressed members in his own party still upset over the lack of spending cuts included in Tuesday's fiscal-cliff deal, Garrett urged "volunteers" from across the country to come to New Jersey, New York and other Northeast states hit by Sandy to aid victims.

But, he acknowledged, "As someone who has been on the ground, viewed the devastation, and helped clean up some of the damage, I certainly believe that those who have bought flood insurance should expect to receive the coverage they paid for."

The bill is H.R. 41. It increases the borrowing authority of the NFIP to $30.425 billion from $20.775 billion.

The legislation is a bare-bones concession from the House-Republican leadership to demands from Northeast congressmen, and even the White House, for prompt action on aid to victims of Hurricane Sandy.

The next step is House floor consideration of two bills providing additional aid to states hit by Sandy. Debate will take place Jan. 15.

One is a bill crafted by Rep. Hal Rogers, R-Ken., chairman of the House Appropriations Committee, which, at the time it was drafted, would have provided $27 billion of supplemental aid to Sandy victims, including the increase in NFIP borrowing authority.

The other is a bill passed 89-8 by the Senate last Friday that would have provided a total of $60.4 billion in aid, less the $9.7 billion in borrowing authority provided by H.R. 41.

One of the reasons the House acted on the NFIP borrowing authority today was that it received a message from the Federal Emergency Management Agency late Wednesday indicating that the funds need to pay claims from Superstorm Sandy and other NFIP obligations would run out sometime early next week.

As noted by Andrew C. Harris, president of the National Association of Professional Insurance Agents, "Not paying valid claims is simply not an option."

Harris said, in comments echoed by other insurance-industry officials repeatedly to members of Congress, "The federal government has both a legal obligation and a moral imperative to pay to indemnify policyholders for their covered flood losses in policies backed by the NFIP."

Tempers were taut as the House debated the bill. Rep. Maxine Waters, D-Calif., ranking minority member of the House Financial Services Committee, called it "unconscionable that it has taken so long" to provide supplemental aid to Sandy victims.

Rep. Frank LoBiondo, R-N.J., added, "People are waiting to be paid."

His district includes the casino-filled Atlantic City and many other coastal communities. "They're sleeping in rented rooms on cots somewhere, and they're not happy. They want to get their lives back on track, and it's cold outside. They see no prospect of relief."

However, Rep. Darrell Issa, R-Calif., noted that the original aid proposal contained too much pork.

Northeast members of Congress thought the Sandy-relief bills would be brought up as soon as work was completed late Tuesday on legislation designed to avert the fiscal cliff. But House Speaker John Boehner, R-Ohio, decided to pull the bills after sensing they could be rejected by a Republican caucus that thought the fiscal-cliff deal did not provide enough in cuts to the federal budget.

Boehner agreed to prompt action on the bill after strong criticism from Northeast members of Congress, and from New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie.

Rep. Peter King, R-N.Y., who voiced strong criticism of Boehner and other House Republicans after the bills were pulled from the House floor early Wednesday, was more restrained during the Friday debate.

"What we're asking for is to be treated the same as victims in all other storms, all other national disasters have been treated," he said.