### Hurricane Milton Threatens to Overwhelm National Flood Insurance Program Budget

Congress is facing a substantial financial challenge as Hurricane Milton closes in on western Florida, threatening to drain funds from the already struggling National Flood Insurance Program (NFIP). Set to strike Wednesday night, the storm is making lawmakers reconsider the future financial viability of the NFIP.

Emerging analyses from lawmakers and their aides suggest that the damage claims from Milton, combined with those from last month’s Hurricane Helene, will likely surpass the NFIP's current financial resources. The program, with nearly $5 billion available, might soon need to draw on its $9.9 billion borrowing authority from the Treasury. Despite collecting premiums and disbursing claims similar to a traditional insurer, the NFIP has faced significant financial issues due to historical miscalculations in flood risk assessments and massive losses from past storms like Hurricane Katrina.

Approximately 2 million NFIP policies exist in areas impacted by Helene or threatened by Milton, which has recently alternated between Category 4 and 5 intensities. With Florida being home to over 1.7 million of these policies, the potential financial strain is considerable. Experts believe that the current $15 billion available may not be sufficient to cover the damages anticipated from both Helene and Milton.

The impending disaster has reignited political debates on Capitol Hill regarding how to fortify the NFIP. Historically, attempts to reform the program have been hindered by disagreements over potential increases in coverage and housing costs. The possibility of Congress needing to intervene with emergency funding post-Milton is now being met with discordant views: increasing borrowing limits, appropriating more funds, or forgiving additional debt as was done with $16 billion after the 2017 hurricane season.

Rep. Garret Graves of Louisiana emphasized the need for a fundamental change in disaster preparation and recovery, criticizing the inefficiency of the federal response. Though discussions have begun between Graves, House Financial Services Chair Patrick McHenry, and other key figures, a consensus remains elusive. McHenry seems inclined towards raising the borrowing limit or appropriating funds, whereas Rep. Maxine Waters favors debt forgiveness.

With Congress not set to return to Washington until after the November elections, there is still time to address any NFIP claims surge that might result from Milton. Despite this, former NFIP chief actuary Andy Neal suggests that the combined claims from Helene and Milton could exceed the NFIP's borrowing capacity, although the existing $9.9 billion borrowing cushion offers some time for legislative action.

Members of Congress are voicing a commitment to ensuring policyholders receive the necessary funds without delay, underscoring the urgent need for solutions amid growing pressure on FEMA’s operations due to these back-to-back hurricanes.