White House signals support for flood insurance bill

The Obama administration said Monday that it supports passage of the National Flood Insurance Program reauthorization bill that is before the Senate this week, praising it for allowing the Federal Emergency Management Agency to raise premiums in order to secure NFIP’s finances.

NFIP is the only flood insurance provider in the country and is still deeply in debt from Hurricane Katrina. Repeated extensions of the program have been blamed for dampening the housing market in many states.

The NFIP bill on the Senate floor would shave nearly $5 billion from the budget deficit over 10 years, and secure the program for five years.

“By requiring the Federal Emergency Management Agency to move to full risk-based premium rates for certain properties, the bill would strengthen the NFIP's financial position and increase its ability to fund future claims. The bill would also reduce flood risk and increase the resiliency of communities to flooding,” an official White House budget office statement reads.

It also praises the bill for streamlining flood clean-up programs and says it wants to work with legislators to include further reforms.

Passage of the NFIP bill would be a boon to Sens. Jon Tester (D-Mont.) and David Vitter (R-La.), who have been pushing it. Vitter ultimately threatened to amend a food safety bill with the NFIP bill, cornering leaders into making it a priority this summer.

The House passed a reform measure last summer, but battles such as over coverage of lower risk flood plains and how NFIP rates the risk of levees breaking have kept it off the Senate floor.

A big compromise on levees was announced last week and leaders are working on an amendment list for floor action.

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