People make their way out of a flooded neighborhood. Even as his state’s largest city is pounded by extreme rain, Texas Rep. Jeb Hensarling is spearheading efforts to revamp the National Flood Insurance Program. | Scott Olson/Getty Images. Texas Republican vows to fight for flood insurance overhaul

As his state’s largest city is pounded by extreme rain, Rep. Jeb Hensarling is digging in his heels on a conservative vision for overhauling the heavily indebted National Flood Insurance Program, which protects millions from the risk of financial calamity.

The Texas Republican, who as chairman of the House Financial Services Committee is spearheading efforts to revamp the program before it expires next month, will call on his colleagues to pass his proposal as soon as they return from recess.


His committee has drafted legislation that would renew the program for five years but also shrink its footprint, make coverage more expensive for policyholders, and ease the pathway for private companies to sell their own flood insurance policies. Opponents say the changes would make coverage less accessible for many homeowners.

At stake is a program that serves hundreds of thousands in Texas but carries almost $25 billion in debt that officials say it cannot pay back under its existing structure. Hensarling has warned that the program is unsustainable in its current form — an argument that could be strengthened if the NFIP asks Congress to let it borrow more money to cover claims, as he says is likely.

Hensarling's proposals have stirred up intense debate in the House for months, as lawmakers grapple over how to shore up the finances of the program while keeping insurance coverage affordable.

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In an interview Monday, as the devastation in Houston began to bring the policy issues to the fore, Hensarling said he was "pressing on the accelerator" — not the brake.

"It's more urgent than ever we get this bill done," he said.

His characteristic steadfastness puts him at odds with other lawmakers, aides and lobbyists who suggested Congress was more likely to advance a less ambitious flood insurance package, including, potentially, a short-term extension bill without significant reforms.

"Hurricane Harvey makes a rapid reauthorization of the NFIP — in its current form — more likely," a House Republican leadership aide said. "Considering the ongoing disaster in Texas and the fact we are not even halfway through hurricane season, I think there will be immense public and political pressure to get this finished."

In the Senate, the committee of jurisdiction has yet to settle on legislation that it could send to the floor. Sen. Sherrod Brown of Ohio, who has been negotiating the bill as the top Democrat on the Senate Banking Committee, said it was too early to determine how Harvey would affect the timeline "but it is likely that Congress will pass a short-term extension to ensure the program doesn’t lapse.”

"I don't see a way forward that's not a short-term extension, and I believe that to be an absolutely utter failure by Congress again," said Jimi Grande, senior vice president of government affairs at the National Association of Mutual Insurance Companies.

Hensarling has called the national debt an "existential threat" and has worked for years to reduce the government's intervention in financial markets.

Heading into the latest reauthorization cycle, he made clear he would prefer to see the program phased out in short order but appreciated its importance to many homeowners. His committee approved a series of bills in June, including several proposals that won broad, bipartisan support.

It's not his first face-off over flood insurance. When Congress walked back rate increases that were initiated as part of the program's 2012 reauthorization, House leaders sidelined Hensarling, and he voted against the rollback.

"Policyholders of the NFIP need to know that their policies will be honored, and yet we have a program that is unsustainable," he said.

Hensarling said Monday there was a "great likelihood" that the NFIP would ask Congress to raise its borrowing authority after Harvey.

"I predicted this four years ago," he said. "I predicted this three years ago. I predicted it two years ago."

Congress last raised the program's borrowing cap by $9.7 billion in 2013 following Hurricane Sandy.

A spokeswoman for the Federal Emergency Management Agency said the program had $1.7 billion available to pay claims and $5.8 billion in additional borrowing authority, not including additional resources from reinsurance. About 373,000 flood insurance program policyholders are in the 18 counties experiencing major flooding, according to a Pew Charitable Trusts analysis of FEMA data.

"It's likely that those policyholders will make claims against the program," said Laura Lightbody, project director at Pew's flood-prepared communities initiative.

Over the past several months, Hensarling has agreed to let go of some of the reforms his committee drafted, after vocal opposition from several House Republicans and business groups.

But a remaining provision that would curtail the availability of discounted insurance premiums for homes that file multiple claims is continuing to cause concern for coastal lawmakers, including the No. 3 Republican in the House, Majority Whip Steve Scalise of Louisiana.

Hensarling defended the provision, arguing: "When it comes to the American taxpayer, at some point you say ... we'll pay for your house twice, but after that it's either time to mitigate or you might want to consider relocating somewhere else."

Rep. Pete Olson, a Republican who represents the Houston area, said Friday that he appreciated the tightrope Hensarling was trying to walk but "the end package must ensure that we uphold the promise we’ve made to homeowners."

Hensarling said he was confident about having a "meeting of the minds" with Scalise and planned to continue to talk with his colleagues and any stakeholder "until the last yea and nay is recorded." He said he believed that he had broad support in the Texas delegation.

"We need a long-term reauthorization, and we need it now," he said. "That's what I'm going to fight for and make sure that we don't come here again."