As Harvey floods Texas, Congress due to debate insurance program that’s underwater

A vast majority of Texas homeowners in areas under water from Tropical Storm Harvey lack flood insurance, and how to help them is sure to be a big political fight in Washington. Lisa Desjardins joins Miles O’Brien to take a closer look at the debate about the National Flood Insurance Program.

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    It will take years to rebuild from Harvey, of course. It's too early to know the full extent of the damage, but, as we just heard, a vast majority, about 80 percent, of homeowners in the areas underwater in the Houston area do not have flood insurance.

    How to help them is sure to be a big political fight back here in Washington.

    Lisa Desjardins is here to explain that and a little bit about the flood insurance program, which is, shall we say, troubled, to say the least.



    Talk about sort of biblical and strange timing here. Let's look at a few key points about this important National Flood Insurance program. First of all, this program expires soon. It expires September 30. It is right now, Miles, $24 billion in debt.

    This is the largest flood insurer by a lot in this country. Five million Americans get their flood insurance through this federal flood insurance program. And now Congress has to decide how to renew it in just 30 days after this disaster.


    So, what is the role for Congress right now? They obviously were under a deadline anyway. It seems more urgent now, doesn't it?


    That's right. I think that is exactly right.

    I think that there's also a tricky issue here, in that some Republicans want to massively reform this program because of the debt and deficit it's in, while some other Republicans are more concerned about bringing down premiums for those in flood areas, and some Democrats with them.

    Listen to sound bites from a hearing in June of this year.


    We know this is a program that is 455 billion underwater and runs an actuarial annual deficit of $1.4 billion. It is unsustainable.


    I truly believe that this reauthorization can be bipartisan, but I'm concerned that if you do not heed my call to work together on the details of this package, it will cause irreparable harm.


    Hensarling, the committee chairman, wants to limit the scope and in fact have more private insurers, but others say that's going to make it unaffordable.


    I think we can all agree this is a broken program.

    And we hear these stories time and again about people having severe damage, building, rebuilding, multiple claims time and again on the same location. It sort of sounds like the definition of insanity.


    I think that's the really important point about this story.

    Right now, we know that flood areas are increasing on our coastlines. Also, cities are becoming more flood-prone because of development.

    Let's look at this map, Miles, about where the most flood insurance is; 80 percent of the National Flood Insurance Program is in those states you see in gray. Those are also the states with the largest congressional delegations.

    The coastal states and, as you say, Miles, a key point, we now know that repetitive losses from flood damage, that's only 1 percent of those who have flood insurance, but, Miles, is 25 to 30 percent of the cost.

    We're seeing homes that are now seeing two, three, times of flood damage within a 10-year period. We just heard from that woman in P.J.'s piece tonight who said she's been flooded twice in two years. So it's a real problem.


    So, this is really a program that encourages bad practices, building in the wrong place, doesn't it?


    That's the question.

    And, of course, there's some people who say communities should be here. How do we support those communities? Someone has to pay for it. But others say, well, the federal government is taking this risk and encouraging them, and that's a problem long-term. There hasn't been a serious debate yet about those issues.


    It is going to be an awfully busy September here in Washington, when you consider all the things on the plate, including this one.


    I think that's right.

    And here's the trick, is that there may not be time to have the really difficult debates, as we're saying. Another issue with this flood insurance program that lawmakers haven't tackled yet, the maps are out of date. And we also know that the maps are changing because the weather patterns are changing.

    This is something they haven't tackled. They have to deal with this flood insurance program, along with, oh, government funding, which also runs out September 30. And they have to try and pass a budget, and they're going to try and deal with tax reform. It's quite a lot.


    It seems that the climate and the weather is changing faster than the bureaucracy. I guess that shouldn't come as too much of a surprise, right?


    No. Gridlock seems to have more power these days than almost anything in Washington.


    All right, Lisa Desjardins, thank you very much for that update. We will be tracking this one very closely.

    And you can track all our coverage of Harvey, including ways you can help. That's on our Web site,

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