WASHINGTON — The Senate on Thursday voted to extend the life of the National Flood Insurance Program for 60 days, giving lawmakers time to work on a long-term extension that would seek to restore fiscal solvency to the debt-ridden plan.
The House last week approved a one-month extension of the program, and the two chambers will have to decide on a common approach before the insurance provider's charter runs out.
The program, started in 1969 to allay federal costs from flood disasters, now covers some 5.6 million policyholders in 21,000 flood-prone communities. Failure to renew it could have consequences for the fragile housing market, because people in flood plains would be unable to obtain flood insurance, preventing them from closing on mortgages.
“If it were to expire, new housing construction would stall, in fact, in many places, just come to a halt, real estate transactions would come to a screaming halt, taxpayers would be on the hook for future disasters,” said Senate Majority Leader Harry Reid of Nevada.
The Senate bill passed with an amendment by Sen. Tom Coburn, R-Muskogee, that eliminates premium rate subsidies for people buying second homes and vacation homes in flood plains.