By Greg Tourial, CQ
New Jersey’s 3rd Congressional District, which spans the state south of Trenton, experienced some of the worst flooding caused by Superstorm Sandy in 2012. GOP Rep. Tom MacArthur, who represents it, has a framed picture on his reception desk of a roller coaster in Seaside Heights, N.J., that was swept into the ocean during the storm.
It’s a big reason why the second-term congressman has become an outsized voice in this year’s debate surrounding the National Flood Insurance Program. The program, which provides flood coverage for 4.9 million policyholders nationwide, was catapulted into prominence this fall by the confluence of an approaching reauthorization deadline in December with three hurricanes that depleted the heavily indebted program’s funds.
But MacArthur is more than just a member of Congress from a coastal district vulnerable to flooding. He has over three decades of experience working in the insurance industry, which helped shape his understanding of the flood insurance program.
Before he was elected to Congress, MacArthur was the CEO of his own property insurance company. But earlier in his career, he often handled National Flood Insurance Program claims while working as a claims adjuster in New York.
“I was rubbing shoulders with just ordinary people working through a claim,” MacArthur says. “I think that had a profound impact on the way I see things.”
He says this experience gave him the perspective to look at the National Flood Insurance Program through a nonideological lens. “All the things I learned in 30 years are helping me to look at this maybe in a unique way.”
“And now I’m in a position as a member of Congress to actually shape a bill that can help those people,” he says. “That’s a big deal to me.”
MacArthur is both an advocate for and a critic of the flood insurance program. “Let’s not vilify the concept of the flood program,” he says. “Let’s just make sure it works for the people of this country,” he told a group of Sandy victims who had come to Capitol Hill in September to lobby lawmakers to increase the program’s transparency.
MacArthur has carved a prominent path for himself on insurance issues. This year, he got a seat on the House Financial Services Committee, where he serves on its Housing and Insurance panel.
And he’s proven a key player in other ways. He was one of only nine Republicans this year to break with party leadership by voting against the fiscal 2017 budget resolution, the initial step toward the GOP’s attempt at repealing the 2010 health care law, because of concerns about the lack of a replacement plan.
In May, however, he became central to working out a compromise amendment between different factions of the House Republican Caucus that revived the stalled repeal attempt and allowed it to pass the House.
Now he could play a similar role as legislators work to reauthorize the flood insurance program amid a polarized environment between lawmakers who are hesitant to raise premiums and ones who want to get rid of the program’s subsidized rates.
“There are people that don’t want to pay for anything,” says MacArthur. “Even if their own district were flooded they’d vote no. And on the other side, are people that don’t want to change anything. They don’t want rates to go up.”
MacArthur views the program as part property insurance fund, part federal disaster relief program, pushing back against criticism from fiscal hawks who say the program’s revenue stream can’t support the amount of coverage it provides.
“I get that people want to say, ‘Why should we subsidize people?’ but let’s remember a couple of things. First of all, every part of the country is susceptible to natural disasters of some kind,” he says. “None of them pay in advance. They just get the help when they have the problem.”
While Congress voted in September to extend the program’s authorization until Dec. 8, the program ran out of funds in early October as it began to receive claims for flood losses caused by Hurricanes Harvey, Irma and Maria. The White House asked Congress to forgive $16 billion of the program’s debt so it would have the ability to borrow the funds to meet its obligations.
MacArthur wants to use this opportunity to promote changes to the program to improve its long-term prospects. In June, the Financial Services Committee approved a five-year reauthorization bill, but the full House has not yet taken it up. “I think the expiration in December and the running out of money sometime this year creates a leverage point where maybe we can push this bill forward,” he says.
MacArthur voted to approve the bill in committee, but only after he worked with its sponsor, fellow Republican Sean P. Duffy of Wisconsin, to add some consumer protection provisions.
“There were things that had to happen for me to cast a yes vote,” says MacArthur. “For example, the premium increases were way too high out of the gate.” The initial bill had premium increases of 18 percent, but MacArthur got that down to 15 percent.
He also opposed a provision to prohibit newly constructed homes from obtaining flood insurance policies after 2021. “That actually was a nonstarter for me,” he says.
But steering the program toward financial sustainability is just as important as keeping it affordable for consumers, says MacArthur. He says the program needs to hike premiums to reflect flood risk, but he wants Congress to make sure “we don’t break people’s backs in the process.”
He also wants the program to invest more in flood mitigation, such as improved construction standards and drainage infrastructure. “We authorize the FEMA director to pay that in advance of loss,” he says of new authority granted to the Federal Emergency Management Agency in the reauthorization measure. “We say to the director, if you think you’re going to avoid future losses, you can pay this in advance.”
MacArthur has called climate change a “critical issue” and suggests it may have played a role in the recent extreme weather. “Flood risk seems to be on the increase,” he says. “People can pretend like global warming isn’t an issue. You can argue the causes, but the reality appears to be that storms are getting more severe, flooding is getting more pronounced, and we really need to respond to that.”
When Congress returns to debate the reauthorization later this year, MacArthur will remain one of the loudest voices in the room.
“Look, I know the bill we passed out of committee was better because I was in the process,” he says. “Because I was here, and was able to apply 30 years of experience in insurance, because I was able to apply the perspective of a community that’s benefited from the flood [program], I know that I was able to make a difference. I take comfort in that.”