Updated at 6:45 p.m. with comments from Louisiana Sen. John Kennedy.

WASHINGTON — With flooding from Hurricane Harvey still wreaking havoc on parts of Southeast Texas, many say Congress is all but certain to extend a federal flood insurance program set to sunset next month.

But a storm is brewing over how that gets done — and what measures lawmakers are willing to take to stabilize the program that even before Harvey was $25 billion in debt.

Dallas Rep. Jeb Hensarling, the Republican chairman of the House Financial Services Committee, is pushing for the House to approve in September a full five year re-authorization of the National Flood Insurance Program, a bill his committee passed that includes measures to bring the NFIP closer to solvency.

He’s facing headwinds from some lawmakers, even from within his own party, wary of the effects of those changes. And with the Senate further behind in getting a re-authorization ready for a vote, many observers expect Congress to instead pass a short-term measure and delay political fights over how to fix the program.

"Harvey points out how important this is that we make this program sustainable and do a long-term re-authorization," Hensarling told The Dallas Morning News this week, calling the fate of the program an "urgent matter."

But Friendswood Rep. Randy Weber, a Republican, said he’s concerned about any modifications that would lead to higher flood insurance rates and a drop in property values.

“I have a very coastal district, so if we’re going to make some changes, we need to do it thoughtfully,” he said late last week, in the hours before Hurricane Harvey blew ashore.

Meanwhile, the NFIP is likely to face billions in claims from those affected by the storm, with the potential to bump up against its $30.4 billion debt limit. That means the program housed under the Federal Emergency Management Agency could ask Congress to act, again, to increase what is can borrow from the U.S. Treasury.

“Four years ago, we had a taxpayer bailout and I said, unless we reform the program, we’ll have another,” Hensarling said of Congress’ vote in 2013 to raise the program’s borrowing limit. “We’re right on the precipice of facing another.”

Flood waters cover the Meyerland neighborhood of Houston. The National Flood Insurance Program, already $25 billion in debt, probably will face billions more in claims related to Hurricane Harvey. (Alyssa Schukar / The New York Times)

How we got here

The National Flood Insurance Program was created in 1968 to address a dearth in privately available flood insurance and to reduce federal spending on disaster relief, according to The Pew Charitable Trusts.

At the time, private insurers lacked the sophisticated modeling to assess actual risk, and were loath to take on the burden of insuring against flood-related catastrophes.

“It’s not like an automobile accident or burglary where if you have a claim, it doesn’t mean your neighbor will,” said Carolyn Kousky, director for policy research at the Wharton School’s Risk Management and Decision Processes Center. “It means entire communities will be hit at the same time. That’s really expensive for insurers.”

For decades, the NFIP — which only offers flood insurance policies to participating communities — largely stayed afloat. Then Hurricanes Katrina and Sandy hit, bringing with them multi-billion dollar claims.

Congress voted in 2013 to raise the NFIP's borrowing authority by nearly $10 billion. Eight Texas Republicans voted against the measure, including Weber. It passed by voice vote in the Senate.

Lawmakers have since grappled with how to set the program on solid financial footing without saddling homeowners with unaffordable premiums. The NFIP provides more than 5 million policies, with 12 percent of those sold in Texas.

In 2012, Congress passed the sweeping Biggert-Waters Flood Insurance Reform Act to better reflect actual risk and phase out subsidized rates. But many balked at the sharp increase in flood insurance rates for affected properties, and Congress voted in 2014 to mute some of those changes.

Hensarling, a deficit hawk, voted against undoing the reforms.

“What they’re looking at now is trying to find that happy medium,” said Laura Lightbody, project director for The Pew Charitable Trusts’ flood prepared communities initiative. “Because what is clear is that the program is offering subsidized rates. It’s because of that, and because flooding is becoming more costly, that it’s $25 billion in debt.”

Dallas Rep. Jeb Hensarling is pushing for a five-year re-authorization of the National Flood Insurance Program. (Zach Gibson / Special Contributor)

Art of compromise

Hensarling pushed for more aggressive changes to the program as part of the five year re-authorization.

His committee passed a package of bills earlier this year that he said would strengthen the NFIP and encourage more private insurers to enter the market — a move that he argues would increase competition and make insurance more affordable. Currently, the NFIP accounts for the vast majority of flood insurance policies sold nationwide.

Tom Santos, vice president of federal affairs for the American Insurance Association, said some of the changes proposed by Hensarling’s committee would help ease regulatory hurdles for private insurers.

“There are companies who are willing to do it,” he said, adding it would be better for more private insurers to participate “so that when something like Harvey happens, it’s not all borne by the NFIP and taxpayers.”

But some of the committee’s proposed changes were met with resistance from home builders and realtor groups, and later stripped. They included a provision that would have allowed the NFIP to deny coverage for new homes built within the 100-year floodplain and would end the “grandfathering in” of low insurance premiums for people whose homes are found to have higher risk in updated flood maps.

The groups also opposed a measure that would have raised the minimum rate hikes for non-actuarially rated properties with subsidies from 5 percent to 8 percent. The groups settled on 6.5 percent.

Asked about the concessions, Hensarling said: “The idea is you compromise your policies in order to advance your principles.”

The National Association of Home Builders and other trade associations have since endorsed the bill, but it’s unclear whether he’ll have broad support from his colleagues.

In the Senate, Louisiana Republican Sen. John Kennedy is also among those pushing for a multi-year re-authorization of the program. He has a measure with New Jersey Sen. Bob Menendez, a Democrat, that would extend the program for six years and freeze interest payments, but restrict rate increases, according to Politico.

Kennedy told Politico he agrees with Hensarling's desire to make the program fiscally sound, but "I don't want to see him stabilize it and then have nobody able to afford the insurance."

Unlike most Washington politics, the issue doesn’t fall neatly along party lines, but geographical boundaries. “You could kind of predict where legislators would stand depending on whether or not their constituents got wet,” Kousky said.

Stan Collender, a budget expert now with the MSL Group in Washington, is among those who predict Congress will pass a short-term extension instead of the full re-authorization, particularly as lawmakers have a dizzying to-do list — such as approving a must-pass spending bill to keep the government open — when they return from August recess.

When it comes to a long term overhaul of the program, the politics may be particularly jumbled in Harvey’s wake, Collender noted. “Wherever they stood Saturday morning or Friday morning, they don’t stand there now.”