WASHINGTON — The massive flooding Harvey has caused in Texas and Louisiana comes as Congress weighs renewing a federal flood insurance program that continually pays out more than it takes in through premiums, potentially leaving taxpayers on the hook for $24.6 billion and counting.

The National Flood Insurance Program expires Sept. 30. Congress is likely to reauthorize the program before then because failure to do so would disrupt coastal real estate markets. If the program expires, current policies would remain in effect, but no new policies could be issued.

The question for lawmakers when they return from the August recess next week is whether to pass a short-term extension that keeps the program running largely as-is for the next few months or pass a long-term extension that makes more drastic changes and puts the program on firmer financial footing.

Here’s a look at the program and how some lawmakers are looking to change it.


HOW DID THE PROGRAM START?

Congress created the National Flood Insurance Program in 1968 to reduce the growing expense the federal government assumed after natural disasters to help repair damaged homes and businesses.

One of the key goals of the program was to get cities and counties to reduce the risk of flooding and better protect buildings from flood waters.

If the communities agree to undertake such steps and join the program, their residents and businesses can then purchase federal flood insurance to protect themselves from losses. When communities don’t participate, it means their residents and business owners cannot buy federal flood insurance and are thus ineligible for a federally backed loan.


WHO GETS COVERAGE THROUGH THE NATIONAL FLOOD INSURANCE PROGRAM?

Homeowners who live in areas that have a 1 percent chance of being inundated by flood waters in any given year must purchase flood insurance as a condition of having a federally backed mortgage.

About 5 million policies are in effect for individuals and businesses. The policies generate about $3.3 billion in premiums annually. Still, studies have shown that many Americans living in these particularly vulnerable flood zones bypass the requirement to buy flood insurance. A 2006 government study found that compliance was lowest in the Midwest and highest in the West.


WHERE IS THE PROGRAM WORKING WELL?

The Federal Emergency Management Agency estimates that the flood-control efforts communities have undertaken as a result of their participation in the program prevents nearly $1.9 billion in flood losses annually.


WHERE IS THE PROGRAM NOT WORKING?

A program that is supposed to pay for itself is clearly not doing so. A spending bill enacted after Superstorm Sandy authorized the program to borrow up to $30.4 billion. The damage from Harvey will potentially lead FEMA to hit that borrowing level. If it does, FEMA would eventually need authorization from Congress before borrowing any more money to pay out claims.

The growing debt level is why lawmakers such as Rep. Jeb Hensarling, the Republican chairman of the House Financial Services Committee, say the program is unsustainable. Hensarling calls Harvey a “wake-up call” that an overhaul is needed to stave off a taxpayer bailout.

Still, it’s a difficult balance. If premiums rise too much to make the program self-sustainable, it discourages people from living and opening businesses in the more flood-prone regions of the country.


WHAT CHANGES ARE BEING CONSIDERED BY CONGRESS?

Hensarling’s committee has already passed a series of bills that would increase premiums by 8 percent annually for certain policies instead of the current 5 percent, among other changes.

The panel has since reined that in to a 6.5 percent increase that will be phased in gradually, a move that helped attract support from influential trade groups representing home builders and real estate agents. The House legislation would require FEMA to raise collection rates for a reserve fund by 1 percent each year to help pay future claims. The legislation also seeks to boost the private flood insurance marketplace, clarifying that flood insurance policies written by private carriers satisfy the mandatory purchase requirements that come with obtaining a federally-backed mortgage. Hensarling said he believes more flood insurance offerings from private companies would bring about the kind of competition that could make policies more affordable.

The top Democrat on the committee, California Rep. Maxine Waters, said that the fee and premium increases being pursued were still too much in her view and she encouraged House colleagues to “consider the thoughtful, bipartisan process in the Senate as an alternative to this anti-homeowner bill.”

There are competing bills in the Senate, with one bipartisan measure capping premium fee increases at 10 percent and suspending the interest payments the program makes to the U.S. Treasury for the money it has borrowed over the years.