Flood Aid Standoff Almost Triggered Government Shutdown ~

With thousands of Americans facing the approach of winter after losing homes to flooding from Hurricane Irene and Tropical Storm Lee, and with whole communities still struggling to deal with the effects of washed-out roads and bridges, a standoff between the Republican-dominated House and the Democrat-controlled Senate over how to provide emergency funds almost threatened to shut down the entire U.S. Government this week. Meanwhile, victims of the flooding worry whether they face personal disaster as a result. The New York Times on Monday had this story about Pennsylvania families frustrated with the country’s inability to come to their aid (“ Flood Victims Getting Fed Up With Congress,” by Robert Pear). “People here in northeastern Pennsylvania, already traumatized by the loss of their homes, were further disheartened by word that FEMA’s disaster relief fund was running short of money,” reported the Times. Civil infrastructure took a hit in last month’s flooding. The Times reports, “The firehouse in Falls Township was filled with five feet of stinking river water, mixed with diesel fuel, sewage and pesticides. Before using it again, firefighters need to decontaminate the site and replace the cinder block walls." Private citizens are also in dire straits. UPS driver Kenneth S. Eisenman, whose house exploded on the night of the flood from an apparent gas leak, told the Times, ““I’m an ex-Navy Seabee. I paid my dues. I’ve worked since I was 10 years old. I never asked for anything from anybody. Now I’ve been sitting here for more than two weeks with nothing. I’m very frustrated.” Darlene Swithers, a home health nurse in the Wilkes-Barre area, told the paper, “Members of Congress are intelligent, but they have no common sense. They fight too much. They should be put in a corner and take a timeout and start working together as a team. I’m so sick of hearing Republicans this and Democrats that.” Two weeks after the flood, Ms. Swithers finally has electric power back, the Times reported, but she “still has no furnace or hot water. When she wants to bathe, she fills her tub with water heated in her microwave oven.” In past disasters, Congress has typically provided FEMA with emergency funding authorizations. This time, emergency funding was caught up in high-stakes political battles in Washington. “FEMA provides money to eligible individuals and households to help pay for home repairs, temporary housing, replacement of personal property and other serious needs related to a disaster,” reported the Times. “In the absence of action by Congress, the agency’s disaster relief fund could be depleted by midweek, federal officials said.” Meanwhile, preoccupied by short-term funding that Tennessee’s Republican Senator Lamar Alexander called “small potatoes,” the Congress has yet to come to grips with the long-term issue of nationally backed flood insurance. Reuters reported, “The federal program that insures homes against flood damage expires next Friday and is at risk of not being renewed, even as an early fall storm threatens to inundate much of the northeastern United States yet again. Industry executives say that if the National Flood Insurance Program lapses, it would become all but impossible to get a mortgage in flood zones across the country until the program is revived.” (“ Mortgages at risk if U.S. flood program expires,” by Ben Berkowitz) Hurricane Irene’s impact will stress the NFIP’s already troubled finances, Reuters reported on August 31 (“ Special report: Irene wallops flood insurance program,” by Ben Berkowitz). “The problem is that the NFIP is a disaster itself, hanging on by a series of hard-fought annual extensions and the subject of a stalled reform bill in Congress,” Reuters reported. “Only six years ago, taxpayers had to bail out the program after losses from Hurricane Katrina proved too much to handle.” In Vermont, one of the states that was badly flooded by Irene, few homeowners carried the insurance: “In Brattleboro, there are all of 99 policies on the books for a town of more than 12,000 people,” Reuters reported. But New Jersey, which suffered billions of dollars worth of damage from Irene, has more than $52 billion of insurance policies in force. The FEMA-administered National Flood Insurance Program (NFIP), which is the only source of homeowners’ insurance that covers flooding, has been operating under a series of short-term funding re-authorizations for years. The latest one-year re-authorization expires this Friday (September 30). The House has already voted 406 to 22 to reauthorize the program for five years, and the House bill includes reforms intended to get the program on a sounder fiscal footing. But after last month’s debt-limit extension fight, the Senate left on summer recess without passing its own version of the bill. The Senate is also considering a proposal, not in the House bill, to modify the way insurance companies must decide payouts in cases where both flooding and high winds strike the same building — a controversial issue ever since thousands of claims were denied after Katrina struck the Mississippi coast in 2005. But whatever the Senate decides about the “wind-versus-water” issue, the two bills will need to be reconciled before the NFIP will have a new authorization. And given the current state of affairs in Washington, there is a high likelihood that days, or even weeks, will pass after the program’s current authorization expires and before a new authorization can take effect. In the meantime, it will be nearly impossible for home buyers located in flood zones to get mortgage approvals.