A looming government shutdown is converging with key deadlines for funding of disaster preparedness and federal flood insurance, threatening to expose thousands of Americans to flood losses and stall thousands of real estate sales.
The National Flood Insurance Program, the main source of coverage against flood damage for most Americans, is set to lapse at midnight Wednesday, at the same time a funding gap is expected to shut down the federal government.
The program provides more than $1 trillion in coverage to about 4.5 million homeowners, renters and businesses. If Congress lets its authorization lapse, homeowners would be unable to renew existing policies, leaving them vulnerable in the event of a flood. And new policies, which are required for federally backed mortgages for properties in flood plains, could not be issued. Policies not up for renewal would not be affected, and ongoing claims would be paid, but perhaps with a delay.
When the program lapsed for one month in 2010, sales of more than 40,000 properties were frozen, according to the National Association of Realtors.
Flooding along the coasts as well as inland has become a growing problem in the United States as the planet has warmed. Climate change is linked to heavier rainfall and rising sea levels.
At the same time, as hurricane activity stirs in the Atlantic and wildfires smolder in the Northwest, the government account that pays for disaster response and recovery is running out, its balance projected to drop to $2.3 billion by the end of this month, according to a Federal Emergency Management Agency report released Sept. 16. When its funding runs low, federal disaster spending is typically limited to “lifesaving and life-sustaining activities.”
A federal budget adopted in March had allocated $22.5 billion for disaster relief through the end of September. The disaster fund’s balance often gets low at this time of year, but it is usually replenished without controversy.
A shutdown itself would not have a major impact on federal disaster response. About 84 percent of FEMA’s 25,000 employees are considered exempt from shutdown-related furloughs, according to a Homeland Security Department memo.
As for the flood insurance program and disaster funding, lawmakers could address those issues independently of any plan to fund the government’s day-to-day operations, or a solution could be wrapped into any budget deal.
While stopgap funding plans often include disaster relief money, one House budget proposal did not include any such appropriation.
Proposals to extend the flood insurance program have so far languished on Capitol Hill. A House bill introduced in April would have reauthorized the flood insurance program through 2026. Another offered Friday would extend the program into November.
The White House did not respond to a request for comment.
Congress has extended the flood insurance program nearly three dozen times over the past decade, as surging floodwaters and more coastal development have pushed it more than $20 billion in debt to the U.S. Treasury.
Senators Cory Booker, Democrat of New Jersey, and Bill Cassidy, Republican of Louisiana, have been working on legislation to reform the flood insurance program.
“It is irresponsible for Congress to continue to make families hold their breath and hope the rug will not be pulled out from beneath them,” Mr. Cassidy said in a statement. “It is a pattern that should end.”
Potential reforms include redrawing floodplain maps to reflect expanding flood risks and increasing the number of policyholders in the program. Flood insurance premiums have become so expensive that property owners don’t want to participate, said Douglas Quinn, executive director of the American Policyholder Association, a nonprofit watchdog organization.
“If you put somebody in a position where they’ve got to choose between an insurance premium or putting food on the table, they’re going to feed their family,” Mr. Quinn said.
A statement on FEMA’s website said the Trump administration supports “bold steps” to bolster the flood insurance program’s finances and ensure the program’s future.
“The level of damage from recent catastrophic storms makes it clear that FEMA needs a holistic plan to ready the nation for managing the cost of flooding under the NFIP,” the statement says.
Scott Dance covers how climate change and extreme weather are transforming society.
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