➤ Efforts to reform the National Flood Insurance Program are not dead, despite an influential Republican's claims.
➤ Flood mapping, longer-term extension of funding and an automatic mechanism to offload debt are a few of Rep. Emanuel Cleaver, D-Mo.'s priorities for reforming NFIP.
Even though Emanuel Cleaver will not lead the Housing and Insurance Subcommittee of the House of Representatives Financial Services Committee, the Missouri Democrat said he intends to be an "active" member of the subcommittee, using ideas gathered during his four years as the top minority-party member on the panel.
Outgoing committee Chairman Rep. Sean Duffy, R-Wis., said in late November that any legislation passed regarding the National Flood Insurance Program once Democrats take control will come with "no reform." But in an interview with S&P Global Market Intelligence outside the House chamber, Cleaver rejected that idea and discussed how the program could be revamped under Democrats.
The interview came before the current federal government shutdown, which prompted the U.S. Federal Emergency Management Agency to briefly limit policy writing under NFIP, despite a congressional extension having been passed, before it quickly reversed course.
Rep. Emanuel Cleaver, D-Mo.
Source: U.S. House of Representatives
S&P Global Market Intelligence: I talked to one of your Republican colleagues recently, who said reforming the National Flood Insurance Program is dead. Is it?
Cleaver: I don't think that reform is in any way dead. We want reform.
What are some of the top items you want to include in a flood insurance reform package?
Cleaver: First of all, we need a multiyear plan. I had worked with Sean Duffy and preached 10 [years], he grudgingly said maybe seven, but if it went to [outgoing House Financial Services Committee Chairman Jeb] Hensarling, I'm sure it would have got five. And then, we need an automatic mechanism that would prevent the federal government from holding the debt pointlessly, which raises the cost of the program.
And we need to have a massive remapping effort beyond our [current] water [levels]. It needs to include the five U.S. territories, because we saw what happened in Puerto Rico and U.S. Virgin Islands.
Why 10 years? Wouldn't you want the program to be flexible to deal with events as they occur?
Cleaver: The reason I'm talking about 10 years is because I have had had all kinds of meetings with industry. We have heard people saying 'we don't need the government, we don't need a backstop.' I've met with the largest and smallest [private] flood insurers. And none of them will remain in the program, at least right now, if the government withdraws.
Now, they believe, as do I, that they need more time to look at the program over an extended period of time, not six months like we're doing right now, because they have no chance to study the program. The uncertainty prevents them from doing any proactive planning. So, we didn't give them enough time to plan to through some major [catastrophe] events and then come out and then evaluate what happened in that event.
Do you think NFIP has a better chance to get to the president's desk than under Republicans?
Cleaver: Our staff had begun to work with the Senate staffers on what we were doing and what they saw. So I think it would take a lot of work, but it can be done.
Look, I had a lot of insurance people meeting in Kansas City, I had about 22 people, some local, some national ...
The National Association of Insurance Commissioners is headquartered there...
Emanuel Cleaver: That's right. We had a big meeting in the boardroom in the conference room of the Kansas City Chamber of Commerce. We've got to have a lot of energy put into a long-term flood program. And I do think it's possible.
You said Rep. Lacy Clay, D-Mo., will chair the Housing and Insurance subcommittee. Can you be effective without the gavel?
Cleaver: I'm still going to be very, very active. I will not overstep my chair. But I intend to be very active in trying to get some of the things I've been working on through. Clay said to me — we've been friends for a long time — he asked me recently, "what do you want, what do you need out of me?"
So, I'm going to fall right in and ... I told my staff I would still have a [hearing] of insurance companies to talk about flood. I said, if the chair does not object or if the chair will let me participate, then we're going to do it.
Say we're to talk again in two years. What is the one flood insurance thing you would like to have accomplished by the end of the next session of Congress?
Cleaver: Remapping [flood zones]. The technology has dramatically improved to the point where we can do remapping a lot easier and a lot more technologically sound because we're using drones and everything else.
Water changes course over time and we have flood plains where floods don't occur anymore. And we have non-flood plains that are now having floods in the 500-year flood event zones more frequently.
And so we got to do that in order to help the public because they're paying insurance based on the likelihood of an event. We have to spend the money, even if we have to cut back on the size of the [shopping] mall.