WASHINGTON — The massive flooding in Texas from Hurricane Harvey is sure to put pressure on lawmakers to resolve differences over the National Flood Insurance Program, but observers say a short-term reauthorization of the program before a Sept. 30 deadline is still the most likely scenario.

The House Financial Services Committee passed measures earlier this year to reauthorize the NFIP but that would aim to cut the program’s debt by shifting more policy holders to the private market. Panel Chairman Rep. Jeb Hensarling, R-Texas, has also made it known he would be open to winding down the program altogether.

In the Senate, there have been three proposals that have gained traction, including one by Senate Banking Committee Chairman Sen. Mike Crapo, R-Idaho, and the top Democrat on the panel Sen. Sherrod Brown of Ohio, which would be a more generic extension of the current program.

House Financial Services Committee Chairman Jeb Hensarling
“I hope the devastation caused by Hurricane Harvey is a wakeup call to Washington when it comes to flood insurance,” Hensarling said. Bloomberg News

Sens. Kirsten Gillibrand, D-N.Y., and Bill Cassidy, R-La., have a plan that would extend the NFIP funding for 10 years, and Sens. John Kennedy, R-La., and Robert Menendez, D-N.J. have introduced a different bill that would extend NFIP funding for six years and cap premium rate increases at 10%.

The storm — at one point a category 4 hurricane, which has battered Houston and other areas with severe flooding — may spur discussions on Capitol Hill over the NFIP's long-term health, but a final bill is unlikely within such a short time window. Instead, the damage caused in Texas, observers said, might force some members to rethink opposition to a shorter-term reauthorization.

“All you have to do is look at the news reels and see contrary to what many on the far right are suggesting, this program isn’t a giveaway for the rich, these are working class Americans in one of our major metropolitan areas who now absent this program could have lost everything,” said Jerry Howard, chief executive of the National Association of Home Builders.

Yet the storm’s impact on the long-term legislative debate may be limited. Despite hailing from the state hit by the storm, Hensarling, for one, appeared to stick to his guns.

“Our bill makes the program more affordable by opening it up to private market competition,” Hensarling said in a statement Monday. He added that “there is basically just one insurance provider for all of the flood risk in the whole country, which is exactly the system the government has built for itself with its NFIP.”

He indicated that the storm strengthens the case for why the program needs to be overhauled.

“I hope the devastation caused by Hurricane Harvey is a wake-up call to Washington when it comes to flood insurance,” Hensarling said.

Yet banks support extending the program that provides subsidies for flood insurance policies on homes in designated flood areas. Flood insurance is typically required on such properties before loans can be closed, and there can be delays in closings and other logistical problems with any lapse in authorizing the program.

"We don’t want that to happen again," Anne Canfield, executive director of the Consumer Mortgage Coalition, said of lapses in the program.

"My guess is Congress will end up re-authorizing and extending the current National Flood Insurance Program," Canfield said. "There just isn't time" to reconcile the different bills, she added. "There are so many moving parts to this thing and a lot of issues have to be ironed out."

Caitlin Berni, vice president of policy at Greater New Orleans Inc., defended funding the program.

“The flood insurance helps get people to have skin in the game and they are paying premiums and paying dollars so when disaster does hit there is a pool of resources they can take advantage of,” Berni said.

Between 2008 and 2012, the NFIP needed 14 short-term extensions, and experienced five program lapses. In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act, which reauthorized the NFIP through Sept. 30 of this year. Many in the GOP have sought to make the program — now roughly $25 billion in debt — more financially self-sufficient.

The NFIP can borrow another $5 billion, but if the damage from Hurricane Harvey matches or exceeds that of Hurricane Sandy in 2012, the flood insurance program will run out of borrowing authority.

“It’s looking like this is going to be a pretty big disaster, so it is likely to hit the program’s borrowing authority,” Berni said. “That may lead to a scenario where Congress has to lift the program’s borrowing authority.”

Joseph Pigg, senior vice president and senior counsel at the American Bankers Association, said: “The top priority here has to be no lapse. Even without a natural disaster it throws markets into chaos when the program lapses.”

Some observers said Hurricane Harvey could soften opposition to NFIP subsidies, particularly among lawmakers with constituents affected by the storm.

“It takes the argument out of the philosophical realm and makes it real for people,” Berni said.

What makes flood insurance unique is, unlike most fiscal policy issues that separate Democrats and Republicans, flood insurance tends to fall along geographic lines with lawmakers in coastal regions favoring government support for the NFIP.

Hensarling, a free-market conservative from a district outside the Harvey flood zone, has already shown a willingness to bend under pressure from other Republicans.

“Before the recess Hensarling had already agreed to step back from some of the more aggressive reforms that he and some other folks on the committee had pushed at the committee level because he was getting push back from members of his own caucus who were in flood prone areas,” Pigg said.

Texas is home to some of the most conservative members of Congress, and eight Republican representatives voted against funding the NFIP in 2013 and 23 voted against Hurricane Sandy aid. But with Harvey ripping through Houston and much of central Texas, observers said, some lawmakers may put philosophical views aside, at least to support a short-term extension.

“Were I a senator from Texas, right now my thoughts would be on compassionate conservatism, not hard-line conservatism, and were I from a neighboring district like Mr. Hensarling's, I would hopefully be having the same kind of thoughts,” Howard at the homebuilder association said.

Still, a little over a month is not seen as enough time to address the program's longer-term issues before the deadline. Even getting floor time for a stand-alone bill reauthorizing the program might be a challenge, observers said.

“Given the fact that time is so scarce on the Senate floor it is quite possible it gets wrapped into a larger package.” said Paul Merski, executive vice president of congressional relations at the Independent Community Bankers of America.

As for a longer-term reform bill, Hurricane Harvey might have an impact in terms of what a final bill will look like and when, but the extent of its impact is still unclear.

The storm "highlights the need for the program but is also probably going to highlight the added expense that comes so I just don’t know what direction it takes the reforms that have been on the table,” Pigg said.

However, Howard said if anything, hopefully the disaster puts pressure on Congress to work together to solve a challenging issue it has been reluctant to address.

“It certainly illustrates that [Congress] needs to put partisanship and rhetoric aside and do what they were elected for, and that was to enact policies that affect the American people,” Howard said.

Brian Collins contributed to this article.