FEMA Reverses Halt to New Flood Policies during Shutdown; New Six-Month NFIP Extension Leaves Debate over Reforms to 116th CongressFollowing criticism from industry groups and members of Congress, FEMA has retreated from a December 27 announcement that it would stop issuing new flood policies and renewals during the ongoing partial shutdown of the federal government. Meanwhile, a six-month extension passed by Congress and signed by President Trump on December 22 gives lawmakers through May 31, 2019, to reach consensus on possible reforms for the National Flood Insurance Program (NFIP).

Costly natural disasters in recent decades have tested the sustainability of the program, and in 2017, Congress forgave $16 billion of NFIP’s debt to keep the program solvent. These challenges have led some in Congress and the insurance industry to call for reforms to the program, including changes to align rates more closely with risk.

Changes in the makeup of the 116th Congress may reshape the debate, including the passing of the chairmanship of the House Financial Services Committee from Jeb Hensarling, an advocate for substantial changes to NFIP, to Maxine Waters. Waters previously sponsored legislation that would have brought significant reforms to NFIP, but in recent years has emphasized the need to ensure that rates remain affordable.

The reauthorization of NFIP, even as leaders failed to agree on funding for the government, again demonstrates the bipartisan popularity of the program and commitment to its continuity, notwithstanding disagreement over long-term changes.